EPA GHG Emission Requirements Could Affect Interstate Pipelines

By Stephen Barlas, Washington Editor | November 2009 Vol. 64 No. 11

Pipelines dodged one Environmental Protection Agency greenhouse gas (GHG) bullet temporarily but may get hit by another.

The EPA's final rule issued on Sept. 22 on who has to report GHG emissions to the EPA leaves out the interstate pipeline industry, although it is not clear whether the industry, which had protested its initial inclusion in the proposed rule, is out of the woods entirely or whether the agency is simply refining reporting requirements for pipelines, and will publish them in the near future. The more potentially significant EPA GHG action, however, was its Sept. 30 proposed rule which would actually require industrial sources of GHG emissions to reduce those emissions below certain levels. Again, the application of this second, proposed rule to the pipeline industry is unclear, according to Terry Boss, a senior vice president with INGAA.

Pipelines are responsible for two sources of GHGs: carbon dioxide from the internal combustion engines which run compressors, and methane from the compressors themselves. The proposed rule limiting emissions would apply to any industrial source – and its chief targets, of course, are power plants, refiners and industrial manufacturers – which emits more than 250 tons a year of GHGs from any source. Boss says he thinks interstate pipelines will exceed that floor, but he is not sure how dramatically. If it is over the threshold, a pipeline company might have to install what is referred to as "best available control technology." That could be costly. The costs of controlling nitrogen oxide, which is not a GHG, but is the subject of another proposed rule the EPA issued last summer, is expensive, and might parallel the costs of controlling carbon dioxide and methane emissions. To address a state requirement, an INGAA member was recently required to reduce NOx from existing IC engines for several facilities. At one facility, low emissions combustion (LEC) NOx control was installed on three larger engines (3,400 hp each) with a total capital investment (TCI) cost of over $3.4 million.

Of course, simply reporting GHG emissions to the EPA would presumably be less costly. Nonetheless, INGAA took issue with a number of the reporting elements of the EPA proposal issued last summer, particularly the requirement that the calculations be done via "direct measurement." INGAA proposed an alternative using emission factor based approaches to estimate fugitive emissions. When the EPA published its final rule on GHG reporting, it admitted that the pipelines (and the oil companies who are in the same category, for purposes of GHG reporting) made some good points.