United States Greenhouse Gas Regulatory Reporting

1. United States Greenhouse Gas Regulatory Reporting IPIECA GHG Reporting Workshop Terri Shires, URS Corporation 1

2. Overview • Start locally and expand nationally: • California • Western Climate Initiative • U.S. Environmental Protection Agency

3. California’s Climate Plan • Global Warming Solutions Act (AB 32) • Reduce GHG emissions to 1990 levels by 2020 • Approximately 15% reduction from 2010 emissions • Began January 1, 2008, first reports due June 1, 2009 • Mandatory facility level reporting; optional entity level reporting • CO2, CH4, N2O, SF6, HFCs • Initial process and protocols largely based on CCAR • Who must report? • Any facility emitting >25,000 metric tonnes CO2/year from stationary combustion • Petroleum refineries, hydrogen plants, cogeneration facilities

4. California: Recent Activity • November 2010 ballot proposition that would have suspended that state's recent climate change legislation failed • December 16, 2010, the CARB approved revisions to the California GHG reporting regulation • To support a GHG gas cap-and-trade program • To harmonize with U.S. EPA reporting requirements • Included reporting requirements for upstream oil and gas operations. • Revised regulation is expected to be effective for reporting in 2012

5. Phase 1: 2012-2014 Cap declines 2%/yr Electricity generation (including imports) and large industrial (including refining) Phase 2: 2015-2020 Fuel distributors Transportation fuels, natural gas, other fuels Cap declines 3%/yr California: Cap & Trade Cumulative reductions needed between 2012 and 2020: 273 million metric tons CO2e

6. Initiated in 2007 Regional GHG emissions target of 15 percent below 2005 levels by 2020 Cap & Trade: 1st compliance period 2012 25,000 metric tons CO2e threshold Western Climate Initiative

7. Western Climate Initiative (WCI) • Mandatory Reporting beginning 2011 for 2010 • July 2009, WCI published the Essential Requirements for Mandatory GHG Reporting • Initially 10,000 metric tons CO2e threshold • Harmonized with EPA MRR in fall 2010 • Continuing to develop reporting protocols • Oil and gas production, natural gas processing, and natural gas transmission and distribution

8. EPA’s Mandatory Reporting of Greenhouse Gases • GHG Mandatory Reporting Rule Program (GHGRP) 40 CFR Part 98 • Initially published 10/30/2009; several revisions in 2010 • 46 emission source categories • CO2, CH4, N2O, SF6, HFCs, and other fluorinated gases • Purpose: “To Shape Future Climate Change Policy” • Better understand relative emissions of specific industries, and of individual facilities within those industries • Better understand factors that influence GHG emission rates and actions facilities could take to reduce emissions • Does not require control of GHG

9. Direct Emitters C – Stationary Fuel Combustion W – Petroleum and Natural Gas Systems Y – Petroleum refineries Suppliers MM – Petroleum Products NN – Natural Gas and Natural Gas Liquids PP – Carbon Dioxide Other RR – CO2 Injection and Sequestration UU – Injection of CO2 EPA Applicability and Subparts • Applicability • Specified facilities (such as refineries) • >25000 MT CO2e per facility

10. GHGRP Revisions • March 16, 2010 - Minor harmonizing changes to the general provisions • September 22, 2010 - Reporting of corporate parent, NAICS Code and co-generation information • October 28, 2010 – Supplier updates • November 30, 2010 – Added new regulated facilities, including petroleum and natural gas systems • December 17, 2010 – Settlement agreement revisions • December 27, 2010 – CBI interim final and proposed amendments

11. Facility Definition • Generally, a facility is defined as… • Physical property, plant, building, structure, source, or stationary equipment; • On contiguous or adjacent properties; • In actual physical contact or separated solely by public roadway or other public right of way; • Under common ownership or common control • Onshore production – facility is the basin • Natural gas distribution – facility is the LDC

12. Subpart A - General Provisions • QA/QC requirements • Monitoring plan • Best Available Monitoring Methods (BAMM) • Accuracy requirements for flow measurement • Reporting requirements • Electronic submission format to be specified by EPA

13. Subpart C – Stationary Combustion • Exclusions: • Flares (though covered in Subparts W and Y) • Portable equipment (though covered in Subpart W) • Emergency generators and emergency equipment • Calculation methodologies • Tier 4: CEMS • Tier 3: Fuel flow measurement and CC direct measurement • Tier 2: Company records fuel, measured HHV, default CO2 EF • Tier 1: Company records fuel, default HHV, default CO2 EF

14. Subpart Y - Refineries • Stationary combustion units and each flare • Unit specific calculations • Coke burn-off emissions from each cat cracker, fluid coker, and cat reformer • Sour gas treatment • Coke Calcining • Asphalt Blowing • Equipment leaks, storage tanks, loading operations, delayed coking units, uncontrolled blowdown systems, and misc. process vents • Non-merchant H2 production

15. Offshore petroleum and natural gas production Onshore petroleum and natural gas production Onshore natural gas processing Onshore natural gas transmission compression Underground natural gas storage Liquefied natural gas (LNG) storage LNG import and export equipment Natural gas distribution Subpart W – Petroleum and Natural Gas Systems

16. Natural gas pneumatic device and pneumatic pump venting Well venting for liquids unloading Gas well venting during well completions with and w/o hydraulic fracturing Gas well venting during well workovers with and w/o hydraulic fracturing Flare stack emissions Storage tanks (production and transmission) Reciprocating compressor rod packing venting Well testing venting and flaring Associated gas venting and flaring Dehydrator vents Blowdown vent stacks EOR injection pump blowdown Acid gas removal vents EOR hydrocarbon liquids dissolved CO2 Centrifugal compressor venting Equipment leaks Combustion equipment (onshore production and distribution only) Subpart W - Source Types

17. Suppliers (Subparts MM, NN, PP) • Refineries, Importers/Exporters, LDCs, NGL suppliers • Suppliers report annually: • CO2 emissions that would result from the complete combustion of each product, feedstock used, imports, or exports during the calendar year • (For Subpart PP) CO2 from complete release of product

18. Subparts RR and UU • Subpart RR – Geologic Sequestration of CO2 • Complementary to and builds on EPA's Federal Requirements under the Underground Injection Control (UIC) Program for CO2 geologic sequestration wells • Develop and implement an EPA-approved monitoring, reporting, and verification (MRV) plan • Subpart UU – CO2 Injection (EOR operations) • Reporting CO2 mass balance around injection facility

19. Challenges with EPA Rule • EPA’s reporting tool is still in development • Reports are due March 31 for refineries • EPA has not finalized CBI determinations for reporting data elements • Petition for reconsideration filed for Subpart W

20. Additional Information: Comparison of CA and EPA Programs