GREENHOUSE GAS EMISSIONS REPORTING FROM THEPETROLEUM AND NATURAL GAS INDUSTRYBACKGROUND TECHNICAL SUPPORT DOCUMENTThe Environmental Protection Agency (EPA) regulations cited in this technical supportdocument (TSD) contain legally-binding requirements. In several chapters this TSD offersillustrative examples for complying with the minimum requirements indicated by theregulations. This is done to provide information that may be helpful for reporters’implementation efforts. Such recommendations are prefaced by the words “may” or “should”and are to be considered advisory. They are not required elements of the regulations cited inthis TSD. Therefore, this document does not substitute for the regulations cited in this TSD,nor is it a regulation itself, so it does not impose legally-binding requirements on EPA or theregulated community. It may not apply to a particular situation based upon thecircumstances. Mention of trade names or commercial products does not constituteendorsement or recommendation for use.While EPA has made every effort to ensure the accuracy of the discussion in this document,the obligations of the regulated community are determined by statutes, regulations or otherlegally binding requirements. In the event of a conflict between the discussion in thisdocument and any statute or regulation, this document would not be controlling.U.S. ENVIRONMENTAL PROTECTION AGENCYCLIMATE CHANGE DIVISIONWASHINGTON DC

TABLE OF CONTENTS1. Segments in the Petroleum and Natural Gas Industry . 4a. Petroleum Industry . 4b. Natural Gas Industry . 52. Types of Emissions Sources and GHGs . 63. GHG Emissions from the Petroleum and Natural Gas Industry . 74. Methodology for Selection of Industry Segments and Emissions Sources Feasible forInclusion in a GHG Reporting Rule. 10a. Review of Existing Regulations. 11b. Review of Existing Programs and Studies. 12c. Selection of Emissions Sources for Reporting. 19i. Facility Definition Characterization . 19ii. Selection of Potential Emissions Sources for Reporting . 20iii. Address Sources with Large Uncertainties. 24iv. Identify Industry Segments to be Included . 255. Options for Reporting Threshold . 27a. Threshold Analysis. 286. Monitoring Method Options . 33a. Review of Existing Relevant Reporting Programs/ Methodologies . 33b. Potential Monitoring Methods . 33i. Equipment Leak Detection . 33ii. Emissions Measurement . 36A. Direct Measurement. 36B. Engineering Estimation and Emission Factors. 39C. Emission Factors . 47D. Combination of Direct Measurement and Engineering Estimation . 47c. Leak detection and leaker emission factors . 63d. Population Count and Emission Factors. . 63e. Method 21 . 64f. Portable VOC Detection Instruments for Leak Measurement. 66g. Mass Balance for Quantification . 66h. Gulf Offshore Activity Data System program (GOADS). 67i. Additional Questions Regarding Potential Monitoring Methods . 67i. Source Level Equipment Leak Detection Threshold. 67ii. Duration of Equipment Leaks. 69iii. Equipment Leak and Vented Emissions at Different Operational Modes. 69iv. Natural Gas Composition. 70v. Physical Access for Leak Measurement . 717. Procedures for Estimating Missing Data . 71a. Emissions Measurement Data . 72b. Engineering Estimation Data . 72c. Emissions Estimation Data for Storage Tanks and Flares . 72d. Emissions Estimation Data Using Emissions Factors . 738. QA/QC Requirements. 73Background Technical Support Document – Petroleum and Natural Gas Industry2

a. Equipment Maintenance. 73b. Data Management . 73c. Calculation checks . 749. Reporting Procedure . 7510. Verification of Reported Emissions. 75Appendix A: Segregation of Emissions Sources using the Decision Process . 76Appendix B: Development of revised estimates for four U.G. GHG Inventory emissionssources. 84Appendix C: Development of threshold analysis . 92Appendix D: Analysis of potential facility definitions for onshore petroleum and natural gasproduction . 106Appendix E: Development of multipliers to scale emissions or miscellaneous sourcesconnected to storage tanks . 110Appendix F: Development of leaker emission Factors. 113Appendix G: Development of population emission factors. 123Appendix H: Glossary. 134Appendix I: References. 141Background Technical Support Document – Petroleum and Natural Gas Industry3

1. Segments in the Petroleum and Natural Gas IndustryThe U.S. petroleum and natural gas industry encompasses the production of raw gas andcrude oil from wells to the delivery of processed gas and petroleum products to consumers.These segments use energy and emit greenhouse gases (GHG). It is convenient to view theindustry in the following discrete segments: Petroleum Industry – petroleum production, petroleum transportation, petroleumrefining, petroleum storage terminals, andNatural Gas Industry –natural gas production, natural gas gathering and boosting(natural gas gathering and boosting are not included in this rulemaking), natural gasprocessing, natural gas transmission and underground storage, liquefied natural gas(LNG) import and export terminals, and natural gas distribution.Each industry segment uses common processes and equipment in its facilities, most of whichemit GHG. Each of these industry segments is described in further detail below.a. Petroleum IndustryPetroleum Production. Petroleum or crude oil is produced from underground geologicformations. In some cases, natural gas is also produced from oil production wells; this gas iscalled associated natural gas. Production may require pumps or compressors for the injectionof liquids or gas into the well to maintain production pressure. The produced crude oil istypically separated from water and gas, injected with chemicals, heated, and temporarilystored. GHG emissions from crude oil production result from combustion-related activities,and equipment leaks and vented emissions. Equipment counts and GHG-emitting practicesare related to the number of producing crude oil wells and their production rates.As petroleum production matures in a field, the natural reservoir pressure is not sufficient tobring the petroleum to the surface. In such cases, enhanced oil recovery (EOR) techniquesare used to extract oil that otherwise can not be produced using only reservoir pressure. Inthe United States, there are three predominant types of EOR operations currently used;thermal EOR, gas injection EOR, and chemical injection EOR. Thermal EOR is carried outby injecting steam into the reservoir to reduce the viscosity of heavy petroleum to allow theflow of the petroleum in the reservoir and up the production well. Gas injection EORinvolves injecting of gases, such as natural gas, nitrogen, or carbon dioxide (CO2), todecrease the viscosity of the petroleum and push it towards and up the producing well.Chemical injection EOR is carried out by injecting surfactants or polymers to improve theflow of petroleum and/or enhance a water flood in the reservoir. Emissions sources fromEOR operations are similar to those in conventional petroleum production fields. However,additional emissions occur when CO2 is used for recovery. This specific EOR operationrequires pumps to inject supercritical CO2 into the reservoir while compressors maintain therecycled CO2’s supercritical state. Venting from these two emissions sources is a majorsource of emissions.Background Technical Support Document – Petroleum and Natural Gas Industry4

Petroleum Transportation. The crude oil stored at production sites is either pumped intocrude oil transportation pipelines or loaded onto tankers and/or rail freight. Along the supplychain crude oil may be stored several times in tanks. These operational practices and storagetanks release mainly process GHG emissions. Emissions are related to the amount of crudeoil transported and the transportation mode.Petroleum Refining Crude oil is delivered to refineries where it is temporarily storedbefore being fractionated by distillation and treated. The fractions are reformed or crackedand then blended into consumer petroleum products such as gasoline, diesel, aviation fuel,kerosene, fuel oil, and asphalt. These processes are energy intensive. Equipment counts andGHG gas emitting practices are related to the number and complexity of refineries. SubpartY of the GHG reporting rule (40 CFR Part 98) published in the Federal Register on October30, 2009, addresses refineries and hence is not discussed further in this document.Petroleum products are then transported via trucks, rail cars, and barges across the supplychain network to terminals and finally to end users.b. Natural Gas IndustryNatural Gas ProductionIn natural gas production, wells are used to withdraw raw gasfrom underground formations. Wells must be drilled to access the underground formations,and often require natural gas well completion procedures or other practices that vent gas fromthe well depending on the underground formation. The produced raw gas commonly requirestreatment in the form of separation of gas/liquids, heating, chemical injection, anddehydration before being compressed and injected into gathering lines. Combustionemissions, equipment leaks, and vented emissions arise from the wells themselves, gatheringpipelines, and all well-site natural gas treatment processes and related equipment and controldevices. Determining emissions, equipment counts, and frequency of GHG emittingpractices is related to the number of producing wellheads and the amount of produced naturalgas. Further details are provided on the individual sources of GHG emissions in AppendixA.Natural Gas Processing In the processing facility, natural gas liquids and various otherconstituents from the raw gas are separated, resulting in “pipeline quality” gas that iscompressed and injected into