Understanding Updates to the EPA Inventory of Greenhouse Gas Emissions from Natural Gas Systems Richard Meyer Managing Director, Energy Analysis August 2018

The American Gas Association, founded in 1918, represents more than 200 local energy companies that deliver clean natural gas throughout the United States. There are more than 74 million residential, commercial and industrial natural gas customers in the U.S., of which 94 percent — more than 70 million customers — receive their gas from AGA members. Today, natural gas meets more than one-fourth of the United States' energy needs. www.aga.org

New Science, New Facts The Environmental Protection Agency (EPA) made substantial updates to its estimates of methane emissions in the Inventory of U.S. Greenhouse Gases and Sinks: 1990–2016 that it released in April 2018. The Inventory incorporates new data available from studies on emissions as well as its Greenhouse Gas Reporting Program (GHGRP).

Key findings Annual methane emissions from natural gas distribution systems declined 72 percent from 1990 to 2016. The natural gas emissions rate of production from distribution systems is now less than 0.1 percent. The industry-wide natural gas emissions as a rate of production (the “leakage rate”) is to 1.2 percent—a level still well below even the most stringent thresholds for immediate climate benefits from coal to gas switching. The EPA Inventory reveals once again that the natural gas distribution systems have a small emissions footprint shaped by a declining trend.

Key findings continued Total methane emissions from all natural gas systems have declined 16 percent from 1990 to 2014. The ratio of methane emissions per unit of natural gas produced has declined continuously during the past two and a half decades, dropping 44 percent since 1990. Methane emissions economy-wide represent 10 percent of all greenhouse gas emissions in the United States. Along with natural gas systems, methane emission sources include enteric fermentation and manure management (livestock), landfills, coal mining petroleum systems, wastewater treatment, and others As companies and the country continue to modernize the natural gas infrastructure base and connect homes and businesses, there will be new opportunities to achieve low-cost carbon emissions reductions by leveraging this existing infrastructure and the nation’s natural gas resource.

U.S. Greenhouse Gas Emissions (Million Metric Tons CO2e) US GHG emissions are down 12% since 2005 with natural gas playing a key role in the decline U.S. Greenhouse Gas Emissions (Million Metric Tons CO2e) For two decades, the Environmental Protection Agency (EPA) has developed and published estimates of greenhouse gas (GHG) emissions in its annual Inventory of U.S. Greenhouse Gas Emissions and Sinks (referenced throughout as the Inventory). It is the most comprehensive assessment of U.S. greenhouse gas emissions available. The Inventory covers all major and minor greenhouse gases, including carbon dioxide (CO2­), methane, nitrous oxides, and lesser gases. EPA reports all emissions in units of CO2-equivalence (CO2e) by weighting different air emissions by their respective global warming potentials to account for varying levels of radiative forcing of each gas relative to CO2 over a 100-year time horizon. For methane, the EPA uses a global warming potential of 25, consistent with UNFCCC reporting guidelines. United Nations Framework Convention on Climate Change. The EPA uses a global warming potential of 25 for methane in accordance with the International Panel on Climate Change (IPCC) national inventory reporting guidelines. Higher global warming potentials have been published in the literature, including in fifth Assessment Reports from the IPCC. Using these higher factors would increase the contribution of methane to total greenhouse gases relative to CO2­. Nevertheless, given the overwhelming contribution of CO2 emissions in the natural gas life cycle, even a significant upward change in methane’s global warming potential would not undermine the GHG benefits of using natural gas relative to other fossil energy sources. Source: EPA Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2016 Energy Information Administration

Sources of Methane Emissions 2016 Methane is the second largest contributor to greenhouse gas emissions after CO2. Major economic sectors that produce methane emissions are agricultural processes including livestock management and rice cultivation, landfills, petroleum production, coal mining and natural gas systems. Other major contributors include landfills, petroleum production, and coal mining. In 2016, methane emissions were 657 MMTe and accounted for 10 percent of all U.S. GHG emissions.

CO2 Emissions From Fossil Fuel Combustion by Sector & Fuel Type, 2016 Petroleum combustion accounts for most energy-related CO2 emissions, followed by natural gas CO2 Emissions From Fossil Fuel Combustion by Sector & Fuel Type, 2016 In 2016, United States greenhouse gas emissions totaled 6,511 million metric tons of carbon dioxide equivalent (MMTe), down 1.9 percent from 2015 and down 11 percent from 2005. Carbon dioxide from fossil fuel combustion accounts for the most annual GHG emissions, constituting 82 percent of the total GHG. Total CO2 emissions from fossil fuel combustion equaled 4,966 MMTe in 2016, which is 14 percent below 2005 levels. Petroleum combustion accounts for the largest amount of energy-related CO2 emissions with a 44 percent share. Natural gas ranked second among the fossil fuels in this category at 30 percent, followed by coal at 28 percent. Because the natural gas share of fossil fuel consumption has increased relative to coal, and given the lower carbon emissions per unit of energy relative to coal, overall CO2 emissions since 2005 have trended downward. Source: EPA Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2016

Upstream natural gas systems Source: American Gas Association Playbook 2018

Downstream natural gas systems Source: American Gas Association Playbook 2018

Methane emissions from natural gas systems have declined 15% from 1990 levels Source: Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990 – 2016 Environmental Protection Agency

Methane emissions have declined even as gross natural gas withdrawals climbed 53 percent. Source: EPA Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2016 Energy Information Administration

Methane emissions per unit of natural gas produced have declined continuously since 1990 Methane Emissions per Mcf of Gas Produced (kG CO2e/Mscf Gross Withdrawals) Down 44% since 1990 Includes methane emissions from petroleum production based on the natural gas fraction of total energy content produced from oil wells. Source: Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990 – 2016 Environmental Protection Agency

Natural gas distribution emissions dropped 72% since 1990 Methane Emissions from Natural Gas Distribution Systems (Million Metric Tons CO2e) Down 72% since 1990 Source: EPA Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2016 Energy Information Administration

Sources of distribution system emissions Source: EPA Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2016, Annex table 3.6-1 Environmental Protection Agency

Pipeline Replacement Lowers Emissions Miles of installed main has increased 47% since 1990. Even with this tremendous growth, estimated methane emissions from pipeline leaks declined 75%. A consequence of increased removal of unprotected steel & cast iron pipe replaced with plastic & protected steel. Activity Data & Emissions from EPA Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2016

Summary of Revisions to Natural Gas System Methane Estimates 2015 For the first time, EPA explicitly defines emissions from exploration activities; this does not represent a methodological change, but a separate category for presentation. (MMT CO2e)

Richard Meyer Managing Director Energy Analysis rmeyer@aga.org 202.824.7134 @richardmeyerdc

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