Fact Sheet for Subpart W
Petroleum and Natural Gas Systems
SEFft
United States
Environmental Protection
Agency-
Proposed Mandatory Reporting of Greenhouse Gases Rule
Action
•	On March 22, 2010, U.S. Environmental Protection Agency (EPA) signed a proposed rulemaking
that would require reporting of fugitive and vented methane (CH4) and carbon dioxide (C02)
emissions from the petroleum and natural gas industry, including C02, CH4, and nitrous oxide
(N20) combustion emissions from flares.
•	This proposed rule amends the GHG Mandatory Reporting Rule (MRR) that was issued on
October 30, 2009, which requires greenhouse gases (GHGs) reporting from large emissions
sources in the United States.
•	In general, this proposal requires that petroleum and natural gas facilities emitting 25,000 metric
tons of carbon dioxide equivalent (metric tons C02e) or more report their GHG emissions to
EPA. Covered facilities include: onshore petroleum and natural gas production, offshore
petroleum and natural gas production, onshore natural gas processing, natural gas transmission,
underground natural gas storage, liquefied natural gas (LNG) storage, LNG import and export
facilities, and natural gas distribution facilities.
•	EPA estimates that the proposal would cover 85 percent of the total GHG emissions from the
U.S. petroleum and natural gas industry with approximately 3,000 facilities reporting. EPA
expects that 1,200 of these facilities would already be required to report under another subpart of
the final reporting rule.
•	Very few small businesses in this sector would be affected since most would not meet the 25,000
metric ton threshold for reporting.
•	Fugitive and vented GHG emissions from this industry are the second largest source of human-
made methane emissions in the United States according the Inventory of U.S. Greenhouse Gas
Emissions and Sinks, and represent a critical addition to the emissions data that EPA is already
collecting under other parts of the MRR.
•	This proposed reporting rule would provide important data on the location and magnitude of
GHGs from petroleum and natural gas systems and would allow petroleum and natural gas
facilities to track their own emissions, compare them to similar facilities, and aid in identifying
cost effective opportunities to reduce emissions in the future.
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Background
•	On October 30, 2009, EPA promulgated a final rule for mandatory reporting of GHG from large
GHG emissions sources in the United States.
•	The final rule included reporting requirements for 31 of the 42 emission sources listed in the
proposal. The initial petroleum and natural gas systems reporting proposal (subpart W) was not
included in the final rule.
•	The original proposal for Mandatory GHG Reporting, published in the Federal Register on April
10, 2009, included a subpart for petroleum and natural gas systems. The proposed rule contained
methodologies for quantifying emissions from the following segments: offshore petroleum and
natural gas production, onshore natural gas processing, natural gas transmission, underground
natural gas storage, LNG storage and LNG import and export facilities.
•	EPA received almost 1,200 pages of detailed comments on the initial petroleum and gas systems
proposal from industry, state governments, and environmental and consulting groups.
•	Fugitive and vented emissions from the petroleum and natural gas industry come from a large
number of diffuse sources making GHG emission calculation methodologies particularly
complex.
•	Given the scope of the comments received and the complexity of measuring emissions sources in
this sector, EPA did not finalize the subparts related to the petroleum and natural gas industry.
Instead, EPA took additional time to thoroughly review all comments and with this action is re-
proposing reporting requirements for this source category.
•	Onshore production and natural gas distribution facilities are two sources that were not included
in the initial proposal. However, EPA did seek comments in the April 10, 2009 proposed rule on
whether EPA should include these two segments.
Proposed Rule Overview
•	Petroleum and natural gas facilities that emit 25,000 metric tons or more of C02 equivalent per
year would be required to report their GHG emissions to EPA.
•	Reporting is proposed to be at the facility level with data collection beginning on January 1, 2011.
Reports would be submitted annually with the first report due to EPA by March 31, 2012,
covering 2011 emissions.
•	Due to the unique characteristics of these industry segments, the proposed definition of "facility"
for onshore and offshore petroleum and natural gas production, and natural gas distribution differ
from the definition of facility applied in the remainder of the MRR.
•	As required in the other subparts of the MRR, EPA would verify the data submitted and would
not require third party verification. Prior to EPA verification, reporters would be required to self-
certify the data they submit to EPA, which is consistent with other Clean Air Act programs.
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•	EPA estimates the total cost of reporting to the private sector would be about $60 million for the
first year and $25 million in subsequent years. This translates to an estimated average cost of
$18,000 per facility for the first year and $8,000 in subsequent years.
•	In addition to the facilities included in the initial proposal (offshore petroleum and natural gas
production, onshore natural gas processing, gas transmission, underground natural gas storage,
LNG storage and LNG import and export facilities), this proposed rule would also require
reporting from onshore production and natural gas distribution facilities. EPA estimates that
these segments respectively account for 58 percent and 6 percent of the total greenhouse gas
emissions from the industry.
•	The GHG calculation methodologies for this proposal generally include direct measurement of
emissions when other methods are not feasible, and the use of less costly engineering estimates,
emissions modeling software, and emission factors, as appropriate, for other sources.
Public Involvement
•	EPA conducted targeted outreach for the petroleum and natural gas systems initial proposal, and
through this process met with all major petroleum and natural gas trade associations, many
petroleum and natural gas companies, and states.
•	EPA will hold a public hearing on this proposal on April 19, 2010 in Arlington, VA.
Next Steps and Implementation
•	The Petroleum and Natural Gas Systems Proposed rule and preamble will be published in the
Federal Register shortly, and will be made available at www.regulations.gov.
•	A prepublication version is available on our Web site at:
www.epa.gov/climatechange/emissions/subpart/w.html.
•	The comment period for this rule will be open for 60 days after publication in the Federal
Register.
•	EPA expects to publish the final rule in 2010 so that data collection for this source category can
begin on January 1, 2011.
More Information
This document is provided solely for informational purposes. It does not provide legal advice, have
legally binding effect, or expressly or implicitly create, expand, or limit any legal rights, obligations,
responsibilities, expectations, or benefits in regard to any person. This information is intended to assist
reporting facilities/owners in understanding key provisions of the final rule.
For more information on this proposed rulemaking and other provisions of the GHG Mandatory
Reporting Rule that was finalized in October 2009, including guidance and a schedule of training
opportunities, visit: www.epa.gov/climatechange/emissions/ghgrulemaking.html.
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