June 2, 2016

Study – ICF Analysis of Methane Emission Reduction Potential from Nat Gas Systems

June 2, 2016

Our Nation’s Energy Future Coalition (ONE Future)1 commissioned ICF to conduct this analysis of the marginal abatement cost (MAC) of various methane emission abatement technologies and work practices for the natural gas industry. The goal of this MAC analysis is threefold: (1) to identify the emission sources that provide the greatest opportunity for methane emission reduction from the natural gas system, (2) to develop a comprehensive listing of known emission abatement technologies for each of the identified emission sources, and (3) to calculate the cost of deploying each emission abatement technology and to develop a MAC curve for these emission reductions. The findings of this report will be utilized by ONE Future to develop segment-specific methane emission reduction goals that, when combined, will achieve a collective 1% (or less) emission target in the most cost?effective manner. This report will also assist each ONE Future member to customize its abatement strategy to fit its particular emission profile.

This analysis is based on a MAC curve model developed by ICF for the Environmental Defense Fund (EDF) in 2014. The current study incorporates more recent information on emissions and equipment costs and modified assumptions provided by the One Future participants. Appendix A summarizes and compares the key assumptions and results for the two studies. The study utilized the following approach:

The baseline for methane emissions from the natural gas sector was established as the U.S. EPA
Inventory of Greenhouse Gas Emissions for 2012 to match the baseline year employed in the U.S.
methane emissions reduction goals.²
A review of existing literature and additional analysis was conducted to identify the largest emission reduction opportunities; a cost-benefit estimate for each of the mitigation technologies was calculated.
Interviews with One Future members, industry, technology innovators, and equipment vendors
were conducted with a specific focus on identifying additional mitigation options and characterizing the cost and performance of the options.
Information from the analysis was used to develop MAC curves for the methane reduction
opportunities.

The analysis estimates reductions for each segment of the natural gas industry. The MAC analysis identified reductions totaling 88.3 Bcf/year of methane at a total annualized cost of $296 million or $3.35/Mcf of methane reduced for all segments except the distribution segment. The reductions for the distribution segment were calculated separately, and total 8.9 Bcf. An additional 12.3 Bcf of reductions were projected for the application of reduced emission completions for gas wells with hydraulic fracturing. This was not required in 2012 but is now legally required, and was therefore included as a reduction from the baseline but not as part of the MAC analysis. This brings the total industry-wide methane reduction to 109.5 Bcf from the 2012 baseline emissions.

1 ONE Future is a coalition of companies that aims to achieve an average rate of methane emissions across the entire natural gas value chain that is one percent or less of total natural gas production.

2 This analysis was completed prior to the updates to the methodologies incorporated into the U.S. Greenhouse Gas Inventory
(GHGI) on April, 15, 2016.

Click here to view the full study