After releasing data that consistently show methane emissions plummeting as natural gas production soars, the Environmental Protection Agency (EPA) upwardly revised methane emission data for natural gas and petroleum systems all the way back to 1990 in its final 2016 Greenhouse Gas Inventory. These upward revisions come as the agency is trying to justify new regulations on methane – based on the idea that methane emissions from the oil and natural gas sector are “higher than previously thought.”

In case you missed it, EPA’s revisionist data now indicate methane emissions from natural gas systems have declined just 0.68 percent since 2005 rather than 11 percent, as the 2015 Greenhouse Gas Inventory indicated.  The latest GHG inventory also shows a 29 percent increase in methane emissions from petroleum systems since 2005, just one year after agency data indicated a modest 8 percent increase since 2005. Overall, EPA’s revision of data over a 23-year span has resulted in a total of 773 million metric tons CO2 eq. of previously-unreported natural gas and petroleum systems methane emissions that simply wasn’t there a year before.

Sound a little sketchy?  The American Petroleum Institute (API) certainly thinks so, as it made the following comments in a conference call with reporters last Tuesday:

“At a time when EPA is looking to justify these costly new regulations on methane from the oil and gas industry,” Kyle Isakower, API vice president of regulatory and economic policy, said, “they happen to issue these new methane inventory figures that not only increase the overall emissions estimates, but they also reduce or eliminate the downward trend that we’ve seen in previous inventories.”

Howard Feldman, API senior director of regulatory and scientific affairs, added, “We believe EPA is putting the public posturing right now above the science and data.”

A close look at the methodology used by the EPA confirms API’s skepticism. In fact, the methods EPA used to calculate its new data are just as flawed as the timing of its release is suspicious.

Here are the facts on how EPA’s new methods yielded a 27 percent upward revisions of methane emissions from natural gas and petroleum systems.

Fact # 1: EPA assumed emissions from smaller sources were the same as larger sources

For the first time, EPA has incorporated new equation inputs collected from Subpart W of its greenhouse gas reporting program (GHGRP) into its GHGI estimates. This new data – which EPA deferred final reporting until late 2015 – includes the total number of emission sources at each reporting facility and the average estimated time each of the emission sources was operational at each reporting facility in each calendar year between 2011 and 2014.

It is essential to understand that smaller facilities do not report to the GHGRP. But that didn’t keep EPA from simply assuming that these much smaller facilities have similar emissions rates as larger ones. So EPA basically extrapolated data from large facilities reported on subpart W of the GHGRP onto smaller facilities for which it did not have solid data. This is obviously not a sound method to calculate emissions, resulting in a significant overestimation of emissions.

A memo released by EPA explaining its use of subpart W of the GHGRP even notes that the data are not appropriate for estimating comprehensive national-level emissions:

“… As discussed in the introduction to this memorandum, subpart W provides substantial new data on oil and gas GHG-emitting activities in the U.S., but does not represent total national-level emissions due to the reporting threshold…”

This method is all-the-more significant considering these smaller facilities account for 70 percent of producing wells nationwide, according to the EPA:

“Subpart W reports reflect activities at facilities exceeding the emission threshold. While EPA estimates that subpart W reporting covers the majority of national oil and gas production, the reporting facilities represent approximately 30% of producing wells in the U.S., located within large facilities that exceed the emissions threshold for reporting.”

“In its analysis for this memo, the EPA developed activity estimates using an assumption that the subpart W data set also represents 32% of other national equipment counts (in other words, that the ratio of each type of equipment-per-wellhead is the same for nonreporting wells as it is for reporting wells) in the onshore production segment.”

So the EPA is assuming smaller facilities – which account for more than two-thirds of national equipment counts – have a similar emissions profile as larger facilities. This is simply not the case.

For instance, this method of scaling emissions reported by larger facilities onto smaller facilities that do not report to the GHGRP has resulted methane emissions from pneumatic controllers to more than double in the 2016 GHGI compared to the 2015 GHGI for both natural gas and petroleum systems.

The italicized text in the chart below, taken from the EPA’s memo on its revised methodology, shows what EPA reported for natural gas system pneumatic controllers in 2015, while the bolded text shows the upward revisions for 2016.

The chart below shows similar revisions for petroleum systems.

But a recent Oklahoma Independent Petroleum Association study refutes the argument that pneumatic controllers can be considered equally across all wells sites, large or small. The study found that smaller well site pneumatic controllers have significantly lower emissions, bolstering the fact that EPA is improperly scaling up emissions for small facilities.

EPA has acknowledged that its method of extrapolating data from larger facilities onto smaller facilities is the primary driver of its upward methane emission data, which are driven by production-related emissions for both oil and natural gas.

“… due to the activity data revision alone, production segment emissions greatly increase compared to previous estimates.”

Fact #2: Gathering and boosting station data miscategorized, inflated

One of the more eye-popping revisions from EPA’s 2016 GHG Inventory is the category of methane emissions from natural gas field production, which more than doubled from previous estimates for the years 2011 through 2014.

This chart shows what EPA reported in its 2015 inventory:

And this chart shows the drastic revisions for 2016:

Inclusion of projected emissions from gathering and boosting stations — which clearly aren’t production activities – appear to be the biggest reason for the spike in field production emissions, which now account for 62 percent of total methane emissions from natural gas systems, according to the EPA.

It is also noteworthy that, although gathering and boosting emissions were apparently included in previous GHG inventory’s natural gas production totals, they were not listed in a separate table until the latest inventory, as the following table from the 2016 GHG Inventory shows.

Though there is no frame of reference, considering EPA didn’t separately list gathering and boosting emissions in previous inventories, it is clear emissions from these sources spiked dramatically considering total 2013 field production methane emissions were 47 mmt CO2 eq. in the 2015 GHG Inventory and 2013 gathering and boosting methane emissions alone are 43.3 mmt CO2 eq. in the 2016 GHG Inventory.

The upward revisions are also more than a little suspect, considering gathering and boosting emissions were not included in GHGRP reporting used for the 2016 GHGI (they have been added this year and will be reported for the first time in 2017). That said, in absence of actual emissions data, EPA appears to have made the above estimates based largely on a pair of Environmental Defense Fund studies (Marchese et al. and Mitchell et al.), according to a memo on the EPA’s revised methodology, as well as the following excerpt from the 2015 GHG Inventory:

“Relevant ongoing studies are collecting new information related to natural gas system emissions (e.g. Environmental Defense Fund (EDF) study series data on natural gas systems, including new measurements on gathering and boosting, processing, transmission and storage, and distribution).”

Though EPA’s extrapolation of GHGRP data collected from large facilities onto smaller facilities is far from sound, it is far better methodology than extrapolating the results from a pair of EDF studies to estimate national emissions for gathering lines and boosting stations in the absence of solid data.

And by the way…

Fact #3: EPA upwardly revised emissions based, in part, on EDF studies that showed low emission rates

EPA Administrator Gina McCarthy has stated that the EPA, at least in part, relied on data compiled by the Environmental Defense Fund studies to drive its methane emission revisions and regulatory policies.

“… Over the past year, EPA’s Greenhouse Gas Reporting Program, along with studies from groups like the Environmental Defense Fund and industry and researchers at Colorado State University, Carnegie Mellon, the University of Texas, Washington State University, and others have provided significant new data on methane emitted by existing operations in the oil and gas sector.

“The new data show that methane emissions are substantially higher than we previously understood. So, it’s time to take a closer look at regulating existing sources of methane emissions.”

Morning Consult also recently reported,

“McCarthy cited the EDF-coordinated series of studies as a motivating factor on Tuesday at a Christian Science Monitor Breakfast event.

‘It really gave us a signal that we need to do more,’ McCarthy said. ‘There clearly are opportunities here for further reductions. The information request is really a requirement for oil and gas companies to do specific testing that will allow us to understand the emissions better.’”

EDF has been pushing rhetoric that methane emissions are “higher than previously estimated” and “a big problem” for months. But EDF’s mantra does not change the most important fact: its own studies have found low methane leakage rates between 1.2 and 1.9 percent, which is well below the 3.2 percent of production rate EDF and the scientific community agree is the benchmark for natural gas retaining its environmental benefits.

As Alex Trembath of the environmental group The Breakthrough Institute recently explained, data on methane emissions show “that methane leakage is a minor factor determining the benefit of a coal-to-gas transition and that methane leakage levels are well within acceptable ranges.”

It wasn’t that long ago that EDF touted one of its reports finding low leakage rates as “good news”:

“This is good news in that it shows emissions can be controlled,” said Eric Pooley, EDF senior vice president, referring to a 2013 EDF study that found low leakage rates. “… Industry can get it right.”

But EDF suddenly changed its tune, pushing claims that regulations were absolutely necessary based on estimates being higher than previously believed.

EPA seems to be lending more credence to EDF’s rhetoric than what its studies actually found.

Fact #4: Even with upward revisions, EPA’s emissions are still low

Most importantly, even EPA’s own revised methane leakage data (175.6 mmt CO2 eq. for 2014) shows that leakage rates are just 1.2 percent of 2014 natural gas production, which is well below the 3.2 percent  of production rate EDF and the scientific community agree is the benchmark for natural gas retaining its environmental benefits.

Further, even assuming EPA’s revisions are correct (and they’re NOT), the new data still show that methane emissions have decreased or remained flat at a time in which oil and gas production has skyrocketed.

EPA’s new data shows that methane emissions from natural gas systems are down  (177.3 mmt CO2 eq. to 175.6) from 2005 levels, which happens to be before high volume hydraulic fracturing and horizontal drilling became widely used. Natural gas production has increased 42 percent since 2005. The new data also shows that methane emissions from natural gas systems are down 14.8 percent since 1990 (206.8 mmt CO2 eq. to 175.6). Natural gas production has increased 69 percent since 1990.

Even combining petroleum systems with natural gas systems, EPA’s new data indicates a drop in methane emissions from oil and natural gas systems since 1990. From the 2016 GHGI:

“Methane emissions from natural gas systems and petroleum systems (combined here) decreased very slightly from 245.5 MMT CO2 Eq. in 1990 to 244.3 MMT CO2 Eq. (1.2 MMT CO2 Eq. or less than 1 percent) from 1990 to 2014.”

Oil production, by the way, has increased 16 percent since 1990.

EPA’s own data – flawed as it is – shows voluntary efforts are working to control emissions even at a time that production has reached historic highs. This could be due to the fact that industry has invested $90 billion in efforts to reduce emissions, far more than any other industry.

Fact #5: Methane regulations would have virtually no impact on temperatures

The EPA’s latest GHG inventory reports that greenhouse gas emissions in 2014 were 9 percent below 2005 levels, thanks in large part to the increased use of natural gas. Methane emissions from natural gas and petroleum systems also account for just 3.5 percent of total U.S. GHG emissions in 2014.

That latter fact considered, it begs the question: Will regulations make any difference? Energy In Depth recently did the math using EPA’s 2016 draft inventory estimates and found that that methane regulations would only achieve a decrease in global temperature of 0.004 degrees Celsius, or four one-thousandths of one degree by the year 2100. Plug in EPA’s final numbers from this latest inventory and the number is virtually the same: EPA’s regulations would avoid 0.0047 degrees Celsius of warming by the year 2100. In other words, EPA’s regulations will have virtually no impact.

In the meantime, increased use of natural gas for electricity generation has spearheaded declines in the No. 1 source of GHG emissions, as the EPA confirms:

“Recently, a decrease in the carbon intensity of fuels consumed to generate electricity has occurred due to a decrease in coal consumption, and increased natural gas consumption and other generation sources. Including all electricity generation modes, electricity generators used natural gas for approximately 27 percent of their total energy requirements in 2014.”

Many other reputable agencies further confirm that increased use of natural gas is the most significant contributor to reduced U.S. carbon emissions. According to the Energy Information Administration (EIA), since 2005, natural gas has prevented more than one billion metric tons of carbon dioxide from being emitted from power plants in the United States. Meanwhile, by comparison, the use of renewable energy has prevented only 600 million metric tons of carbon dioxide.  EIA also noted as natural gas fired electricity generation ramped up, power plant greenhouse gas emissions reached a 27-year low in April 2015. The Paris-based International Energy Agency’s (IEA) latest World Energy Outlook pointed out that natural gas is a “valuable component of a gradually decarbonizing electricity and energy system.”

Just a few weeks ago, IEA released data finding, “In the United States, emissions declined by 2% (in 2015), as a large switch from coal to natural gas use in electricity generation took place.”

Conclusion: EPA still has a lot to learn about the oil and gas industry

In an awkward – yet strangely refreshing – recent admission, McCarthy acknowledged that the EPA doesn’t actually understand an industry is plans on imposing new methane regulations on in the near future.

“My caveat is that EPA’s learning this industry right now because it’s not an industry we regulate. We’ve just gotten into regulation of this so there’s a lot of hundreds of thousands of small sources and EPA doesn’t generally have a relationship with this industry as we do other sectors that we’ve regulated for frankly decades. But we’re learning.” (emphasis added)

The flawed methodology used to revise methane emissions from natural gas and petroleum systems confirms McCarthy’s statement – the EPA’s still learning and obviously has a lot of learning to do.