Offshore Petroleum and Natural Gas Production Final Rule: Petroleum and Natural Gas Production (40 CFR 98, subpart W)

Offshore Petroleum and Natural Gas
Production

oEPA

United States
Environmental Protection
Agency

Final Rule: Petroleum and Natural Gas Production (40 CFR 98, subpart W)

Under the Greenhouse Gas Reporting Program (GHGRP), owners or operators of petroleum and natural
gas facilities that emit 25,000 metric tons of carbon dioxide equivalent ( C02e) or more from process
operations and stationary fuel combustion must report GHG emissions to EPA. Owners or operators are
required to collect emission data; calculate GHG emissions; and follow the speci fied procedures for
quality assurance, missing data, recordkeeping, and reporting. Subpart W covers eight segments of the
petroleum and natural gas industry: onshore petroleum and natural gas production, offshore petroleum
and natural gas production, onshore natural gas processing, natural gas transmission compression,
underground natural gas storage, liquefied natural gas (LNG) storage, LNG import and export, and
natural gas distribution. This fact sheet addresses only the offshore petroleum and natural gas
production industry segment.

How Is This Industry Segment Defined?

Offshore petroleum and natural gas production is defined as any platform structure, affixed temporarily or
permanently to offshore submerged lands, that houses equipment to extract hydrocarbons from the ocean
or lake floor and that processes and/or transfers such hydrocarbons to storage, transport vessels, or
onshore. In addition, offshore production includes secondary platform structures connected to the
platform structure via walkways, storage tanks associated with the platform structure and floating
production and storage offloading equipment (FPSO). This industry segment does not include reporting
of emissions from offshore drilling and exploration that is not conducted on production platforms. The
industry segment consists of both platforms that are under the jurisdiction of the U. S. Department of
Interior, Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) and those that
are not.

Offshore platforms must report the following emissions:

• Methane (CH4) emissions from the equipment types identified in the latest published Gulfwide
Offshore Activities Data System 1 (GOADS) emissions study, excluding fuel combustion
equipment.

• Carbon dioxide (C02), CH4, and nitrous oxide (N20) emissions from flares, as reported in the
latest GOADS report.

• C02, CH4, and N20 emissions for stationary combustion sources following the requirements of
40 CFR 98, subpart C (General Stationary Fuel Combustion Sources). Stationary combustion

1 Year 2008 Gulfwide Emissions Inventory Study: Draft Report, U.S. Department of the Interior, Bureau of Ocean
Energy Management, Regulation and Enforcement, Gulf of Mexico OCS Region New Orleans, LA. Draft OCS
Study BOEMRE 2010-0xx, September 2010.

http://www.goinr.boeinre.gov/homepg/regulate/environ/airquality/gulfwide_emission_inventory/2008GulfwideEinis
sionlnventory.html

What Gases Would Be Reported?

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sources include but are not limited to boilers, heaters, burners, gasoline/diesel engines, natural gas
engines, and natural gas, diesel, or dual-fuel turbines. Emissions from portable/mobile equipment
are not required to be reported.

When Must Reporting Begin?

The starting year depends on the subpart to which the platform is subject.

• Platforms that are subject to subpart C for stationary fuel combustion sources (i.e., with
combustion emissions of 25,000 tons C02e or more per year) must submit the first report to EPA
on March 31, 2011 for stationary fuel combustion emissions in 2010.

• Platforms that are subject to subpart W must submit the first report for emissions from offshore
petroleum and natural gas production on March 31, 2012 for emissions in 2011.

Who Has to Report?

• Subpart W applies to offshore platforms that emit 25,000 metric tons of C02e per year or more in
combined emissions from stationary fuel combustion and equipment leak and vented emissions
from offshore petroleum and natural gas production equipment. How C02e emissions are
estimated for applicability purposes depends on whether or not you report to BOEMRE under the
GOADS program2.

• GOADS reporters determine applicability based upon emissions reported in the latest published
GOADS emissions study (e.g., for calendar year 2011, use emissions from the 2008 GOADS
report3).

• Non-GOADS reporters determine applicability using the emissions estimation methodologies
contained in the latest published GOADS emissions study. To assist non-GOADS reporters in
estimating emissions, EPA plans to develop an on-line Applicability Tool. The tool uses a simple
calculator based on conservatively high emission factors. While the tool may be helpful in
identifying platforms that are clearly above or below the threshold, it is the responsibility of
owners and operators to determine if the rule applies. The Applicability Tool will be available at
http://www.epa.gov/climatechange/emissions/GHG-calculator/index.html.

If not subject to the rule for reporting year 2011, then owners and operators must reassess the threshold
determination each year in which operating hours increase or when a new GOADS study is published. If
an offshore facility that initially exceeded the threshold subsequently reports less than the 25,000 metric
tons of C02e for 5 consecutive years or less than 15,000 metric tons of C02e for 3 consecutive years,
then that facility may cease reporting.

2 GOADS reporters are those sources located in the western Gulf of Mexico Outer Continental Shelf (i.e., west of
87° 30' West longitude). Non-GOADS reporters include all other offshore platforms, including sources located in
State waters or areas outside of the Gulf of Mexico.

3 The GOADS inventories are published on a 3 year cycle (i.e., for years 2005, 2008, 2011, etc).

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How Must GHG Emissions Be Calculated?

Emissions will be calculated differently depending upon whether or not the platform is a GOADS
reporter. Offshore platforms are to follow the monitoring and QA/QC requirements in the BOEMRE
regulations that apply to the GOADS program (30 CFR 250).

GOADS reporters:

• Report emissions from the latest published GOADS emissions study (e.g., for reporting year
2011, use emissions from the 2008 GOADS emissions study).

• For any year that does not coincide with the latest GOADS publication year, report the most
recent GOADS emissions, adjusted based on the operating time for the facility relative to the
operating time in the most recent GOADS emissions study.

Non-GOADS reporters:

• Estimate emissions using the methodologies in the latest published GOADS emissions study.

• For any calendar year that does not coincide with publication of a GOADS emissions study,
report the most recent emissions data reported to EPA, adjusted based on the operating time for
the facility relative to the operating time in the previous reporting period.

Discontinued or Delayed GOADS Inventories:

In the event that the GOADS program is discontinued or delayed by more than 4 years, then once every 4
years both GOADS and non-GOADS reporters must use the most recent GOADS emissions study
methodologies to report emissions, beginning in the year that the GOADS emissions study would have
been published.

What Information Must Be Reported?

Facilities would report the following information:

• Annual emission of all greenhouse gases combined, expressed in metric tons of C02e.

• Annual C02, CH4 and N20 emissions, expressed in metric tons of each gas.

• Annual C02 CH4, and N20 emissions aggregated for each equipment type (for example, amine
units, fugitives, etc.).

For 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. The series of information sheets is
intended to assist reporting facilities/owners in understanding key provisions of the final rule.

Visit EPA's Web site (www.epa.gov/climatechange/emissions/ghgrulemaking.html) for more
information, including all rulemakings related to the Greenhouse Gas Reporting Program, additional
information sheets on specific industries, the schedule for training sessions, and other documents and
tools. For questions that cannot be answered through the Web site, please contact us at:
GHGreporting@epa.gov.

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