[Senate Hearing 113-734]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 113-734
                      FUGITIVE METHANE EMISSIONS 
                      FROM OIL AND GAS OPERATIONS



                               BEFORE THE

                       SUBCOMMITTEE ON OVERSIGHT

                                 of the

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE


                             FIRST SESSION


                            NOVEMBER 5, 2013


  Printed for the use of the Committee on Environment and Public Works

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                             FIRST SESSION

                  BARBARA BOXER, California, Chairman
MAX BAUCUS, Montana                  DAVID VITTER, Louisiana
THOMAS R. CARPER, Delaware           JAMES M. INHOFE, Oklahoma
BENJAMIN L. CARDIN, Maryland         JOHN BARRASSO, Wyoming
BERNARD SANDERS, Vermont             JEFF SESSIONS, Alabama
TOM UDALL, New Mexico                ROGER WICKER, Mississippi
JEFF MERKLEY, Oregon                 JOHN BOOZMAN, Arkansas
CORY A. BOOKER, New Jersey

                Bettina Poirier, Majority Staff Director
                  Zak Baig, Republican Staff Director

                       Subcommittee on Oversight

               SHELDON WHITEHOUSE, Rhode Island, Chairman
MAX BAUCUS, Montana                  JAMES M. INHOFE, Oklahoma
CORY A. BOOKER, New Jersey           JOHN BOOZMAN, Arkansas
BARBARA BOXER, California (ex        DAVID VITTER, Louisiana (ex 
    officio)                             officio)
                            C O N T E N T S


                            NOVEMBER 5, 2013
                           OPENING STATEMENTS

Whitehouse, Hon. Sheldon, U.S. Senator from the State of Rhode 
  Island.........................................................     1
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     2
Vitter, Hon. David, U.S. Senator from the State of Louisiana.....     4


Dunham, Sarah, Director of the Office of Atmospheric Programs, 
  Office of Air and Radiation, U.S. Environmental Protection 
  Agency.........................................................     5
    Prepared statement...........................................     7
    Responses to additional questions from Senator Vitter........    10
Allen, David, Ph.D., Gertz Regents Professor in Chemical 
  Engineering and Director of the Center for Energy and 
  Environmental Resources, the University of Texas at Austin.....    21
    Prepared statement...........................................    24
    Responses to additional questions from:
        Senator Boxer............................................    26
        Senator Vitter...........................................    30
Boling, Mark K., President, V+ Development Solutions, General 
  Counsel, Southwestern Energy Company...........................    31
    Prepared statement...........................................    34
    Responses to additional questions from:
        Senator Boxer............................................    37
        Senator Vitter...........................................    38
Gowrishankar, Vignesh, Ph.D., Staff Scientist, Sustainable 
  Energy, Natural Resources Defense Council......................    43
    Prepared statement...........................................    45
    Responses to additional questions from:
        Senator Boxer............................................   146
        Senator Vitter...........................................   150
Smith, Darren, Environmental Manager, Devon Energy Corporation...   152
    Prepared statement...........................................   155
    Responses to additional questions from:
        Senator Boxer............................................   158
        Senator Vitter...........................................   162
        Senator Inhofe...........................................   164
Hill, A. Daniel, Ph.D., P.E., Department Head, Petroleum 
  Engineering, Texas A&M University..............................   165
    Prepared statement...........................................   168
    Responses to additional questions from:
        Senator Boxer............................................   178
        Senator Vitter...........................................   179



                       TUESDAY, NOVEMBER 5, 2013

                               U.S. Senate,
         Committee on Environment and Public Works,
                                 Subcommittee on Oversight,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:29 p.m. in 
room 406, Dirksen Senate Office Building, Hon. Sheldon 
Whitehouse (chairman of the Subcommittee) presiding.
    Present: Senators Whitehouse, Vitter, and Inhofe.


    Senator Whitehouse. Good afternoon, everyone, and thank you 
for being here. I am delighted to be hosting this hearing of 
our Subcommittee, and I particularly want to welcome our 
distinguished ranking member back. It is good to see him here 
and in such good health.
    Our topic today is fugitive methane. As we know, methane is 
the most abundant component of natural gas, and burning natural 
gas for energy produces the beneficial effect of less carbon 
dioxide than burning either oil or coal. So that is a positive. 
And both President Obama and the gas industry have both clearly 
made the point that natural gas is a step toward a lower carbon 
energy future.
    The American Gas Association's Web site says in most 
applications, using natural gas produces less carbon dioxide, 
which is the primary greenhouse gas, and, it adds, using 
natural gas to replace less environmentally benign fuels can 
help address greenhouse gas emissions.
    And, of course, all of that is true, but methane itself, 
when left unburned, is a potent greenhouse gas. The IPCC 
estimates methane is 28 times more potent than carbon dioxide 
over 100 years and 84 times more potent over 20 years. It is 
clear that methane causes much more warming than carbon 
dioxide, particularly in the near term. The methane emissions 
that are not burned can actually offset, and more, the carbon 
benefits we get replacing oil and coal with natural gas.
    According to EPA--and I want to welcome our EPA witness, 
Sarah Dunham, here--methane is the second most abundant 
greenhouse gas emitted by human activities after carbon 
dioxide, and almost a third of methane emissions in the U.S. 
come from petroleum and natural gas systems.
    Methane, as a byproduct of oil drilling, is often vented 
directly into the atmosphere, unburned. There is a lot of it 
that goes out. Flaring of this unwanted natural gas in the bake 
and shale formation in the Northern Great Plains has been 
estimated to be costing landowners, who receive royalties based 
on the value of the resources collected from their land, about 
$100 million per month in lost royalties.
    Even in the natural gas sector, where methane is the 
product and not a byproduct, significant amounts are emitted 
unintentionally through leaks or through inefficient drilling 
practices. In fact, 3 years ago the Government Accountability 
Office estimated that around 40 percent of the natural gas 
vented and flared on offshore Federal leases could be 
economically captured with currently available control 
    Domestic natural gas production is expected to grow by 
about 44 percent from 2011 through 2040, so fugitive methane 
will pose an ever greater risk to the environment and to the 
bottom line of natural gas companies and mineral rights owners.
    But there are real opportunities here for producers and the 
environment. Two of our witnesses, Dr. David Allen of the 
University of Texas and Dr. A. Daniel Hill of Texas A&M, worked 
with a team of other scientists on a study demonstrating the 
promise of cost-effective technologies that significantly lower 
fugitive methane.
    Research also shows that broad application of more 
efficient practices, such as those used by natural gas 
companies like Southwestern, have immediate and significant 
economic and environmental benefits. To be sure, implementing 
fugitive methane capture technologies faces economic, 
logistical, and legal obstacles. Nonetheless, there is evident 
potential for economically attractive ways to reduce fugitive 
methane within the oil and gas sector.
    I want to thank all of our witnesses for their testimony, 
and I want to particularly thank our ranking member, Senator 
Inhofe, and also Senator Vitter of Louisiana for being here 
today. Today's discussion, I hope, will help Congress and the 
Administration better understand fugitive methane and develop 
win-win policies that help industry and the environment.
    Now I will turn for opening remarks to our ranking member, 
Senator Inhofe.


    Senator Inhofe. I appreciate it, Mr. Chairman. Thank you. 
Thank you very much. This is one of the areas where we are 
going to find a lot of agreement with each other. And when you 
talk about a win-win situation, I think we are looking at one 
that might be.
    Again, I want to welcome Sarah Dunham. She and I got to 
know each other in my office back during the confirmation time 
of Gina.
    This issue is something I have been involved with for quite 
a number of years. Data started being collected about the time 
around the Natural Gas STAR Program, when it started. At that 
time, I chaired this Committee. The Natural Gas STAR is a 
voluntary program designed to allow industry to collaborate and 
share best practices to reduce emissions from production 
activities. So you had a lot of cooperation there between 
industry and the EPA.
    We all know that oil and gas firms already have an 
incentive to reduce methane emissions. Methane is natural gas. 
If I were on the board of directors, as all other directors 
would feel, they don't want to waste this stuff; it has a value 
to it. So we are all together on that.
    The Natural Gas STAR was all about EPA working 
collaborative with industry to help them collect the data and 
share best practices. It was a common goal, so everyone 
cooperated. Unfortunately, the EPA used the category of data it 
collected through the Natural Gas STAR program to justify some 
of its new oil and gas regulations. To make matters worse, EPA 
increased their emission estimate by assuming that methane is 
vented during the hydraulic fracturing process whenever there 
is not a State law mandated that it be flared, and that simply 
is not true.
    I wrote a letter pointing this out as a problem back in 
April, about a year and a half ago. The Agency has gone ahead 
and finalized that rule anyway. Since then, the EPA has started 
to make some modifications to its inventory of methane 
emissions from oil and gas operations, but it has come only as 
a result of some of our personal attention to this matter.
    I discussed this at great length with Gina McCarthy during 
her confirmation process, and once at a time when Ms. Dunham 
was there in her office, in present. I am very appreciative 
that she made some adjustments, which she did. I remember we 
had some stakeholders in the room at that time and she made 
some adjustments, but even then we still have major questions 
about the inventory data EPA had on emissions during the 
hydraulic fracturing process.
    Industry had regularly communicated to me that the 
estimates from EPA were too high, which was contributing to the 
alarm surrounding the hydraulic fracturing process. A few weeks 
ago I think we were vindicated when we had the study the 
chairman referred to. The University of Texas, in conjunction 
with the Environmental Defense Fund, releasing a study that 
showed methane emissions during the hydraulic fracturing 
process had been overestimated by the EPA by 50 times. Not 
double, not triple, not 10 times; 50 times.
    This study relied on real measurements, as opposed to EPA's 
general computer modeling estimates, so the new data we have 
now is significantly more trustworthy than we had before. And 
during the question and answer, of course, I am going to try to 
see where we are right now in considering this new data as 
opposed to some of the computer modeling that we had before.
    Fortunately, industry has made significant headway toward 
reducing even those emissions further. The industry is known 
for its world class research and development practices and 
partnerships with leading universities around the world and, as 
a result, newer technology and process are constantly being 
    If a firm finds a better way to recover a resource, without 
losing it to the atmosphere, they are going to do it. As I 
said, it is to their benefit to do it. Still, some critics have 
raised the concerns about the amount of flaring that is going 
on in North Dakota and other regions that are being targeted 
for their rich deposits of oil, but often yield natural gas 
too. In many of these cases the companies simply cannot 
immediately justify the gathering network of pipelines needed 
to capture the gas and transport it to the market. Since gas 
isn't liquid, it is a lot harder to move around, to transport.
    One of the best ways that we could help the situation is to 
allow a widespread LNG exports, which are currently restricted 
by the Department of Energy, and if we were to do that, then 
demand for natural gas, which is currently very low relative to 
the supply that is out there today, would become more solid and 
more of these gathering networks could be justified, which 
would reduce flaring and increase domestic gas supply. So, 
again, that would be a truly win-win situation.
    So regardless, it is crucial that EPA have the most up to 
date and accurate information in its methane emissions 
inventory. It is my hope that they will be able to immediately 
make some adjustments in light of the recent University of 
Texas EDF study.
    Thank you, Mr. Chairman.
    Senator Whitehouse. Thank you, Chairman.
    I invite Senator Vitter to make any opening remarks he may 
care to make.


    Senator Vitter. Thank you, Mr. Chairman. I would just like 
unanimous consent to submit my opening statement for the 
    Senator Whitehouse. Without objection.
    Senator Vitter. And then I will summarize it very briefly.
    I certainly want to associate myself with Senator Inhofe's 
remarks. This is important because this activity, this oil and 
gas activity, and particularly fracking, is at the center of 
the biggest positive development in our economy in the last 
decade, and it is creating good paying jobs, lower energy 
prices, increased energy security, revitalized manufacturing. 
So that is important for our economy and it is important, 
therefore, to get this right based on the real science.
    I also want to underscore how important it is that we talk 
about the University of Texas Environmental Defense Fund 
collaborative study, which is the first study, as Senator 
Inhofe said, to base measurements on actual production sites, 
actual measurements of 190 production sites, not hypothetical 
extrapolations or computer models. Again, as Senator Inhofe 
said, that study underscores how off the EPA has been on this 
    So I look forward to focusing on that so that we can get 
this right based on the science, do the responsible thing, and 
do it in a way that allows us to continue with this real 
positive game changer, building American jobs.
    Thank you.
    [The prepared statement was not received at time of print.]
    Senator Whitehouse. Thank you, Senator.
    I am now pleased to introduce our first witness, Ms. Sarah 
Dunham, who is EPA's Director of their Office of Atmospheric 
Programs within the Office of Air and Radiation. She is here to 
provide an overview of the Administration's work on fugitive 
methane emissions. I am encouraged that the President's Climate 
Action Plan includes the development of an interagency methane 
strategy and that EPA will be leading that team, and I look 
forward to learning more about the process and the other work 
being done by EPA to address fugitive methane.
    Ms. Dunham, welcome and please proceed.


    Ms. Dunham. Thank you. Good afternoon, Chairman Whitehouse 
and Ranking Members Vitter and Inhofe and members of the 
Subcommittee. I appreciate the opportunity to testify today 
regarding methane, a potent greenhouse gas.
    My name is Sarah Dunham and I am the Director of the Office 
of Atmospheric Programs in the Office of Air and Radiation at 
the U.S. Environmental Protection Agency. The Office of 
Atmospheric Programs works to protect the ozone layer, improve 
regional air quality, and address climate change. My testimony 
today will focus on the importance of continued methane 
emission reductions to address climate change.
    There is overwhelming scientific evidence that climate 
change is happening, that human activity is largely 
responsible, and that, if left unchecked, the impacts will be 
severe. Efforts to reduce carbon pollution, including short-
lived gases such as methane, are critically important to public 
health and the environment.
    Although the majority of greenhouse gas emissions consist 
of carbon dioxide, other powerful greenhouse gases 
significantly contribute to climate change, including methane, 
which is also an ozone precursor. The latest Intergovernmental 
Panel on Climate Change assessment report estimates the 100-
year warming influence from one ton of methane is 28 times 
greater than from one ton of carbon dioxide. In 2010, methane 
emissions accounted for 14 percent of global greenhouse gas 
emissions and approximately 9 percent of U.S. greenhouse gas 
emissions. However, total U.S. anthropogenic methane emissions 
are projected to increase by 3 to 9 percent by 2030, compared 
to 2010 emissions levels.
    Methane is primarily released from six sectors: natural gas 
systems, petroleum systems, agriculture, landfills, coal 
mining, and municipal wastewater. The EPA provides annual 
national methane emissions estimates for each sector in the 
Inventory of U.S. Greenhouse Gas Emissions and Sinks. Along 
with a number of other organizations, we continue to work to 
improve measurement methodologies and emissions estimates. 
There have been several recent studies and analyses that help 
to improve emissions estimates in the natural gas sector. The 
EPA has reviewed and used these sources, along with data from 
the Greenhouse Gas Reporting Program, to update the most recent 
Inventory estimates for this sector. The EPA will continue to 
review new data and analyses to ensure that the Inventory 
reflects industry practices.
    Since the 1990s, the EPA, in partnership with industry, has 
been working with great success to reduce methane emissions 
domestically through programs such as Natural Gas STAR, Ag 
STAR, the Coalbed Methane Outreach Program, and the Landfill 
Methane Outreach Program. These programs focus on removing 
market barriers and increasing the use of cost-effective 
emission reduction technologies.
    We also expect significant domestic methane emissions 
reductions as a co-benefit from Clean Air Act regulations, 
including the Oil and Gas New Source Performance Standards for 
Volatile Organic Compounds. The EPA estimates that the Oil and 
Gas New Source Performance Standards, finalized in 2012, will 
result in up to 1 million to 1.7 million tons of methane 
reduced annually.
    Additionally, the President's Climate Action Plan, issued 
in June of this year, calls for broad Federal activities to 
address climate change, including the development of a 
comprehensive, interagency strategy to address methane 
emissions. The EPA is currently working with other agencies to 
assess emissions data, address data gaps, and identify 
opportunities to further reduce methane emissions through 
incentive-based programs and existing authorities.
    To conclude, reducing methane emissions is critical to 
mitigating the impacts of global climate change. We have made 
progress, but there is more to be done and the interagency 
strategy that the President's Plan calls for will put us on a 
solid path forward to realize even further carbon pollution 
    Thank you again for the opportunity to testify, and I look 
forward to answering your questions.
    [The prepared statement of Ms. Dunham follows:]
    Senator Whitehouse. Thank you, Ms. Dunham. I appreciate 
your testimony here. You concluded by saying that the EPA 
estimates that the Oil and Gas New Source Performance Standards 
finalized in 2012 will result in between 1 million and 1.7 
million tons of methane reduced annually. What are the 
technologies that are required to achieve that? Are we dealing 
with very experimental or cutting-edge technologies or is this 
pretty established stuff?
    Ms. Dunham. Thank you for that question. The New Source 
Performance Standard that I referred to really builds upon and 
requires a set of technologies and best practices that have 
been the industry has already proven are cost-effective and 
very effective at reducing methane emissions. A number of 
technologies that the industry leaders have been deploying for 
a number of years and that we have been working with industry 
through our Gas STAR program to show that they really do cost-
effectively reduce and capture emissions. It is those types of 
technologies that form, really, the heart of the requirements 
under the New Source Performance Standard.
    Senator Whitehouse. So they are both established 
technologies and cost-effective for the implementing companies, 
not counting the social effects or the social benefits. From a 
pure company point of view they are cost-effective?
    Ms. Dunham. That is true. The cost-effectiveness largely 
comes from capturing the natural gas emitted during the process 
and using that, as you know, as a valuable energy resource.
    Senator Whitehouse. Do you estimate how much these 
reductions will save industry participants each year?
    Ms. Dunham. Yes, sir. We have estimated for when the rules 
have been fully implemented, in 2015 and beyond, that the rules 
show a savings of between $11 million and $19 million a year, 
again, to the previous point, largely from reducing the waste 
of the valuable resource of natural gas.
    Senator Whitehouse. And do you think that the New Source 
Performance Standards have driven down actual fugitive methane 
emissions from oil and natural gas systems at this point?
    Ms. Dunham. We are certainly working with industry 
collaboratively as industry is working to implement these 
regulations. A number of the dates haven't yet been fully 
realized in terms of when the compliance requirements are, so 
we don't have in our data collection, for example, our 
greenhouse gas reporting program, where some of the data would 
show up, we don't have that yet to show it, but we certainly 
are hopeful and we expect that the benefits that we projected 
under the rule will be achieved.
    Senator Whitehouse. You all at EPA are the lead on the 
President's Climate Action Plan. What can you tell us about 
what you expect EPA's role to be in terms of how you expect the 
process to work and any timeline or deliverables that you have 
in mind at this point?
    Ms. Dunham. One point to point out is we do, through our 
partnership programs, largely, have a long history of working 
with industry, again, on a very collaborative and partnership 
basis across a number of different sectors to help reduce 
methane emissions, so we are bringing that into the interagency 
discussions. But the development of the methane strategy called 
for in the President's Climate Action Plan is being led through 
the White House through the collaboration of multiple Federal 
agencies, because I think, as you pointed out, there are 
multiple agencies who have a role here in looking at reducing 
methane emissions from multiple sectors.
    Senator Whitehouse. And what do you think your timeline is 
likely to be?
    Ms. Dunham. I don't have a timeline right now, but I think 
what I can do is take back that question and that interest 
back, particularly to the interagency group and the White 
House, and we can follow up.
    Senator Whitehouse. Good. Anything on like timeline, 
process, and deliverable points where it will help us kind of 
mark your progress as you go forward I think would be very 
    Ms. Dunham. OK.
    Senator Whitehouse. Senator Inhofe.
    Senator Inhofe. Thank you, Mr. Chairman. Again, I welcome 
our witness here. You have been career and you have been 
through this. You were in the new STAR program and were very 
familiar with the benefits, and with the cooperation that we 
have historically had, at least I believe at that time, we 
don't have quite that same cooperation now, from my estimation.
    Now, on this program that was put together by the 
University of Texas and the EDF, have you looked at this? Have 
you formed any personal evaluations as to the accuracy of the 
results that they came up with? Have you looked at this? I 
guess I will rephrase it a different way. Do you object to 
their results in any way?
    Ms. Dunham. Well, sir, I think one of the things I noted in 
my testimony is that there have been, and continue to be, a 
number of studies in this area of measuring the emissions from 
the natural gas sector, and I think we see the study that you 
will hear about from the next panel as one of the very 
significant ones that is producing a lot more data in this 
area, so we hope to evaluate it and draw from that moving 
    Senator Inhofe. But don't you think, though--you are 
talking about the University of Texas here, you are talking 
about the EDF. These are groups that normally would not be 
entrenched in one side or the other, and here they are together 
in agreement with each other. And the reason I bring this up, 
if this were like a two to one variance from what our data that 
was used for models, then I would feel a little bit differently 
about it, but right now are you currently making changes as a 
result of this in terms of what you are expecting from 
industry, in terms of your relationship with other entities and 
also international groups such as the United Nations? Are you 
sending out anything saying we are correcting errors that we 
made in the past, which is understandable, because this is the 
first time there has really been a study like this that has 
taken place?
    Ms. Dunham. I think the subject of the study that was done 
by the University of Texas and this group is definitely an area 
that we have already very publicly called attention to as an 
area where we are seeking additional data and it would be very 
helpful to have additional data. So it is very timely and 
relevant to those sorts of efforts that we have been saying 
over the last year or so and particularly called out in our 
most recent greenhouse gas emissions inventory as an area where 
we were seeking additional data and looking for enough data to 
possibly look at different methodologies for estimating 
emissions from this sector. So some of the specific things that 
we asked for in that inventory this study is very relevant to.
    Senator Inhofe. I know you know this because I have said it 
so many times and one time or another you have heard it. The 
first hydraulic fracturing that took place was in my State of 
Oklahoma in 1948, and I can remember the predecessor, back when 
Lisa Jackson was the director of the EPA, in response to the 
question has there ever been a documented case of contamination 
as a result of hydraulic fracturing, and she said no. So I am 
very interested in this because, as you look around, you see 
this huge boon that is taking place right now. It is horizontal 
drilling and hydraulic fracturing. Without that we probably 
wouldn't be having this meeting today.
    So my concern is, and I was very pleased to see the results 
of this study that took place, that we immediately adopt this 
and discard anything that is in conflict with this and not 
continue with any kind of regulations that are underway right 
now until that is fully considered. Are there regulations right 
now that are underway or being studied by the EPA?
    Ms. Dunham. We have a number of petitions for 
reconsideration and judicial review on the New Source 
Performance Standard that we finalized last year that I 
referred to, and we are continuing to evaluate those petitions 
and the issues that were raised in them.
    Senator Inhofe. With any regulations that are currently in 
the planning stage, would you do an advanced notice of proposed 
rulemaking and allow comment to be taken on the notice to see 
if the regulations are even necessary or should be changed?
    Ms. Dunham. Again, I think to the extent that we are 
considering additional issues, it is largely under the umbrella 
of the evaluation of the ongoing petitions with respect to the 
process with which we would move forward with. I should note 
that it is not my office that owns the regulatory framework; 
what we do, largely, is support some of the analysis and the 
data on those.
    Senator Inhofe. Yes, but you are representing the EPA at 
this time.
    Ms. Dunham. That is true.
    Senator Inhofe. The last thing I wanted to mention, and 
maybe this would be something you might want to take for the 
record, because one of the things that could improve the demand 
certainty of natural gas is to justify more gathering lines. 
This gets into the somewhat controversial area of exporting 
LNG. Of course, there are a lot of people who are opposed to 
it, saying that is going to cause the price to increase here in 
the United States, when in fact something is going to have to 
be done because right now the supply and demand situation is 
such that we have something we could really offer in terms of 
the balance of trade and other things that we could be great 
beneficiaries of that. So do you have any comments right now in 
expanding the LNG exports?
    Ms. Dunham. I do not have any comments on that.
    Senator Inhofe. OK. Well, something to think about it.
    Thank you, Mr. Chairman.
    Senator Whitehouse. You are very welcome, Senator.
    I will turn to Senator Vitter.
    Senator Vitter. Thank you, Mr. Chairman.
    And thanks, Ms. Dunham, for your work, for being here.
    The regulatory impact analysis for the final NSPS rule 
discusses the 2010 social cost of carbon estimates developed by 
the Administration's interagency working group, and this year 
that working group released revised social cost of carbon 
estimates and those are being used in a lot of EPA proposals, 
so they are very significant. During all your work at EPA, have 
you participated, or do you now, in that interagency working 
group work on the social cost of carbon?
    Ms. Dunham. We have folks in my office who are part of the 
technical group that goes into the modeling context.
    Senator Vitter. So your office certainly participates in 
    Ms. Dunham. It participates in the development of the 
analysis and the modeling.
    Senator Vitter. OK. And personally have you attended 
meetings, provided materials, analysis during the development 
of those social costs of carbon estimates?
    Ms. Dunham. I have certainly attended some meetings. There 
are a lot of different meetings on these, but I certainly 
attended some meetings that have discussed the updated social 
cost of carbon estimates, and particularly with respect to the 
technical work and the modeling and some of the differences.
    Senator Vitter. Where I am going is to anyone outside the 
Administration, including me, this is like a black box, and we 
have been asking a number of legitimate questions through at 
least two letters about that process and about the 
participants, and I have just gotten no information yet. So are 
you aware of others who have been involved in that process?
    Ms. Dunham. I am certainly aware of your interest in the 
subject and knowing more about it, so what I can do is make 
sure that I take that interest back in learning more about what 
the process was.
    Senator Vitter. OK. Specifically, can you ensure that our 
inquiries are substantively addressed, including with a list of 
agency officials who have participated in that social cost of 
carbon process?
    Ms. Dunham. I can certainly take your interest in getting 
that back to the agency.
    Senator Vitter. OK. I am not so much concerned about that; 
I am concerned about the other direction.
    Ms. Dunham. I understand.
    Senator Vitter. Will we get anything back from EPA or the 
    Ms. Dunham. Yes. It is not my role at the Agency to speak 
for that, but I can take it back, your interest in it.
    Senator Vitter. Well, I would specifically ask you to get 
those legitimate questions answered, including a list of Agency 
officials who have participated.
    Ms. Dunham. Yes, sir.
    Senator Vitter. Since you have been somewhat involved in 
the process, what officials do you know of who have 
participated directly?
    Ms. Dunham. Well, I will tell you the discussions that I 
have been mostly involved with were really the technical and 
the modelers, and things like that. I know you are asking for a 
broader set of questions and frankly would like to defer to the 
Agency officials.
    Senator Vitter. OK. Well, since you are the witness, I 
would just like to ask for you to supplement this record with a 
list of all officials that you know of who have participated in 
    Ms. Dunham. OK.
    Senator Vitter. Great. Ms. Dunham, a number of us are a 
little concerned about the very sort of backdoor way EPA has 
gone at regulating methane through these lawsuits that were 
filed, including basically regulating it as a co-benefit. But 
the methane reductions, at the end of the day, are on the order 
of 90 times greater than the reductions of hazardous air 
pollutants that the rule directly seeks to regulate. Do you 
have any concern about that, sort of the tail wagging the dog?
    Ms. Dunham. Well, I think for a number of sectors methane 
is co-emitted with volatile organic compounds and, frankly, I 
think we--and a number of the technologies that have been used 
and are used in this regulation that capture both volatile 
organic compounds also capture methane. So I think using this 
sort of model of capturing the methane as a co-benefit is a 
helpful one in terms of using this very valuable natural 
resource that is being vented to the atmosphere without these 
    Senator Vitter. OK.
    If I can have an additional 30 seconds.
    It appears EPA is also on the verge of getting sued again, 
probably in an attempt to force the Agency into additional 
regulations that more directly regulate methane. As we speak, 
what are EPA's plans in regard to additional rulemakings on 
    Ms. Dunham. Again, particularly with respect to the oil and 
gas sector, that is one of the issues that we have been 
petitioned on for reconsideration, so we are continuing to 
evaluate all those issues.
    Senator Vitter. Final question.
    Senator Whitehouse. For the record, could I just ask the 
witness to define the word petitioned, what she means by that 
so that it is clear to people following this?
    Ms. Dunham. Yes. And maybe we can get back to you with a 
more formal legal definition of it, but we have petitions for 
reconsideration of issues under the rule, as well as petitions 
for judicial review of the rule. But if you want a more sort of 
fuller explanation of both the petitions, as well as the use of 
that word, we would be happy to----
    Senator Whitehouse. No, that is close enough.
    Ms. Dunham. OK.
    Senator Vitter. Final question. In any of that future work, 
will the EPA commit to using actual measurement data from 
actual sites like the University of Texas study--I am not 
suggesting that should be the entire universe--would seem to be 
qualitatively different and better, if it is done right, than 
modeling, et cetera?
    Ms. Dunham. We absolutely agree that the more actual 
measurement data there is that is available, we want to use 
that to improve our estimates. And I would just point out that 
there are a number of studies, in addition to the University of 
Texas one, including the now 2 years' worth of greenhouse gas 
reporting program data that actually requires all facilities to 
report emissions to the Agency. That is another extremely 
valuable source of data for use in updating our estimates and 
making sure that they are based on the best available science.
    Senator Vitter. OK, thank you.
    Senator Whitehouse. Thank you very much, Ms. Dunham. We 
appreciate you being here and we appreciate very much your 
    Ms. Dunham. Thank you.
    Senator Whitehouse. Enjoy the rest of the afternoon.
    Ms. Dunham. Thank you.
    Senator Whitehouse. If I may take just a moment's recess 
while we call up the next panel of witnesses and ask the 
witnesses to come forward.
    Senator Whitehouse. Good afternoon, gentlemen. Thank you 
all for being here. I appreciate it very much. I think what I 
will just do is go right across the table, starting with Dr. 
Allen. Dr. Allen is the Gertz Regents Professor in Chemical 
Engineering and the Director of the Center for Energy and 
Environmental Research at the University of Texas at Austin. He 
has authored six books and over 200 papers in areas ranging 
from coal liquefaction and heavy oil chemistry to the chemistry 
of urban atmospheres. Dr. Allen's work has focused primarily on 
urban air quality and the development of materials for 
environmental education in the past decade.
    He has also developed environmental educational materials 
for engineering curricula and for the University's core 
curriculum. He was the lead investigator for the first and 
second Texas Air Quality Studies, which involved hundreds of 
researchers drawn from around the world and which have had a 
substantial effect on the direction of air quality policies in 
    He received his bachelor of science degree in chemical 
engineering with distinction from Cornell University. His 
master and Ph.D. degrees in chemical engineering were awarded 
by Cal-Tech in 1981 and 1983. He has held visiting faculty 
appointments at Cal-Tech, the University of California Santa 
Barbara, and at the Department of Energy, and we are pleased to 
welcome him here.
    Dr. Allen.


    Mr. Allen. Thank you very much for inviting me to appear in 
this hearing of the Environmental and Public Works Oversight 
Committee on methane leakage. My name is David Allen and I am a 
professor in the Cockrell School of Engineering and the 
Director of the Center for Energy and Environmental Resources 
at the University of Texas at Austin.
    Since January 2012, I have been leading a research team 
funded by Environmental Defense Fund and nine natural gas 
producers. The nine large and mid-sized companies that have 
participated in this study account for 16 percent of natural 
gas production and roughly half of new gas well completions in 
the United States. The research team making the measurements 
consisted of personnel from UT-Austin's Cockrell School of 
Engineering and environmental testing firms URS and Aerodyne 
    The team has been making measurements of methane emissions 
from natural gas production sites throughout the United States, 
in locations ranging from Pennsylvania to the Gulf Coast and 
Rocky Mountains. In September this year, our first results were 
published by the Proceedings of the National Academy of 
Sciences. In these brief prepared remarks I will summarize the 
main findings of our work to date.
    The overall goal of the study was to measure methane 
emissions during natural gas production at a large number of 
recently developed sites and to assess the national 
implications for methane emissions of these measurements. The 
team performed the first-ever direct measurements of methane 
emissions from some of these sources.
    Briefly, our study is based on measurements made at 190 
production sites throughout the United States, with access 
provided by the nine participating energy companies.
    The collaboration of the energy companies and unprecedented 
access to their natural gas production facilities and equipment 
allowed our research team to acquire direct measurements of 
methane emissions from natural gas production operations where 
hydraulic fracturing is used.
    During the year-long study, the UT-led team selected times 
and general locations for sampling activities, and companies 
provided us with access to their sites. The sampling was 
designed to be representative of company operations in the Gulf 
Coast, Mid-Continent, Rocky Mountain, and Appalachian regions.
    We measured methane emissions from hydraulically fractured 
well completions, a process that clears sand and liquids from a 
fractured well. For two-thirds of the completions sampled 
during the study, reduced emission completion equipment was 
used to reduce methane emissions. This equipment reduced 
emissions by 99 percent.
    For these wells, only 1 percent of the methane leaving the 
well during the completion flowback was emitted to the 
atmosphere. Because of this equipment, our estimates of 
national methane emissions from well completions are 
significantly lower than the calendar year 2011 national 
emission estimates that were released by the EPA in April 2013.
    We also found that emissions from certain types of 
pneumatic devices, which control devices such as valves on well 
sites, are 30 percent to several times higher than calendar 
year 2011 EPA estimates for this equipment. We estimate the 
combined emissions from pneumatics and equipment leaks account 
for about 40 percent of national emissions of methane from 
natural gas production.
    We found that the total methane emissions from natural gas 
production from all sources measured in the study were 
comparable to the most recent calendar year 2011 EPA estimates.
    Having summarized the findings, I will briefly comment on 
the manner in which the work was reviewed. The nine natural gas 
producers and Environmental Defense Fund provided technical 
reviews throughout the study. In addition, a scientific 
advisory panel made up of independent academic experts reviewed 
the study. The panel reviewed project plans before data 
collection, preliminary findings, and the final manuscript that 
was published. Prior to publication, the study also went 
through the peer review process of the Proceedings of the 
National Academy of Sciences, which involved responding to the 
comments of anonymous reviewers selected by the editors.
    In addition, I note that our study, which focused on 
natural gas production, is part of a larger effort spearheaded 
by the Environmental Defense Fund to measure methane emissions 
throughout the natural gas supply chain. Results for the 
studies addressing other parts of the supply chain, which are 
being done by other investigators, will be reported during the 
next 12 to 18 months.
    Finally, I note that the University of Texas at Austin is 
committed to transparency and disclosure of all potential 
conflicts of interest of its researchers, and for details on 
our disclosures I call your attention to those disclosures that 
appear with our published manuscript.
    Thank you for the opportunity to describe our work.
    [The prepared statement of Mr. Allen follows:]
    Senator Whitehouse. Thank you very much, Dr. Allen. I 
appreciate it.
    I am very pleased to welcome Mark Boling here. He has 
served as president of V+ Development Solutions, which is a 
division of Southwestern Energy Company since that division's 
creation in April 2012. Previously, he has been senior vice 
president, general counsel, and secretary of the board of 
directors to Southwestern and an executive vice president of 
    The mission of V+ Development is to identify and develop 
solutions for achieving balance among the economic, 
environmental, and social effects of Southwestern's activities, 
focusing in particular on the role of advancing the development 
of domestic natural gas supplies in achieving a low carbon 
energy future. He initiated and continues to lead 
Southwestern's efforts to collaborate with the Environmental 
Defense Fund and other environmental NGOs to develop a model 
regulatory framework for hydraulic fracturing operations.
    Thank you, Mr. Boling, for being here. Please proceed.


    Mr. Boling. Good afternoon, Chairman Whitehouse, Ranking 
Member Inhofe, and Senator Vitter. My name is Mark Boling and I 
am General Counsel and President of V+ Development Solutions, a 
division of Southwestern Energy Company. Southwestern Energy 
Company is an independent exploration and production company 
and is the fifth largest producer of natural gas in the United 
States. I appreciate the opportunity to appear before you today 
and provide testimony regarding methane emissions from the 
Production Sector of Natural Gas Systems.
    At Southwestern, we believe the development of America's 
natural gas resources is an important part of achieving a 
secure, low-carbon energy future for our country, but only if 
it is done right. The good news is that the solutions to doing 
it right are out there and if industry, environmental groups 
and regulators work together in a collaborative way, these 
solutions can be found and implemented.
    One of the primary roles of our Development Solutions 
division is to engage the communities impacted by our 
operations, as well as other stakeholders, to assist us in 
maximizing the benefits while minimizing the negative impacts 
of our activities. We believe that by engaging in these 
problem-solving dialogs, it is possible to develop ``smart 
regulations'' for our industry. When I refer to ``smart 
regulations,'' I am talking about rules that level the playing 
field for all companies and effectively manage risk by 
achieving the proper balance among the economic, environmental 
and social impacts of the regulated activities.
    Southwestern believes that a good example of how 
collaboration between industry and regulators can lead to smart 
regulations is EPA's Natural Gas STAR Program. The Natural Gas 
STAR Program is a voluntary partnership that encourages oil and 
natural gas companies to adopt cost-effective technologies and 
practices that improve operational efficiency and reduce 
methane emissions.
    Southwestern joined the Natural Gas STAR Program in 2005. 
Since our initial report in 2006, Southwestern has reported 
cumulative methane reductions of over 37 billion cubic feet of 
gas, primarily due to our use of Reduced Emission Completions, 
also known as Green Completions. Additionally, due to the hard 
work and innovation of our employees, Southwestern was able to 
drive down the incremental cost of conducting Reduced Emission 
Completions in our Fayetteville Shale project from 
approximately $20,000 per well to $0 per well, while at the 
same time capturing a significant amount of natural gas that 
would have otherwise been vented or flared.
    The years of collaboration and innovation supported by the 
Natural Gas STAR Program provided key technological and 
operational practice information to support the recently 
enacted New Source Performance Standards, Quad O regulations. 
Southwestern believes the Quad O regulations are smart 
regulations as they effectively manage volatile organic 
compound, VOC, emissions from the production sector, and 
indirectly methane emissions, by requiring proven, cost-
effective emission reduction technologies and practices. In 
fact, much of the equipment, controls and practices required by 
Quad O have already been implemented by Southwestern and many 
other companies that participate in the Natural Gas STAR 
    Finally, I would like to say a few words about another 
important collaborative effort, the recently released upstream 
methane emissions study conducted by a team of researchers from 
the University of Texas and testing firms URS and Aerodyne 
Research. Since Dr. Allen has already provided details of the 
measurement data gathered from the study, I will limit my 
comments to the following key findings:
    First, total estimated methane emissions from natural gas 
production were found to be comparable to the most recent EPA 
    Second, measured methane emissions from hydraulically 
fractured well completions were found to be significantly lower 
than the estimates used by EPA in the national emissions 
    And third, measured methane emissions from equipment leaks 
and certain types of pneumatic controllers were found to be 
higher than current EPA estimates.
    This study shows that methane emissions from the natural 
gas production sector can be effectively minimized by applying 
reasonable emission capture and control practices. It also 
shows, however, that additional opportunities exist to reduce 
methane emissions from this sector.
    Southwestern intends to actively pursue these opportunities 
by taking the following steps: implement an internal initiative 
to reduce methane emissions associated with our operations, 
including a leak detection and repair program; participate in 
additional studies to gather data on pneumatic controllers and 
liquids unloading events to increase the data set and improve 
knowledge; participate in a research and development project to 
identify or develop cost-effective methane emission monitoring 
devices; and work with other energy industry partners to 
develop a methane leadership initiative, with a primary goal of 
reducing methane emissions from the entire natural gas value 
    Mr. Chairman, this concludes my testimony. I would be happy 
to answer any questions you may have.
    [The prepared statement of Mr. Boling follows:]
    Senator Whitehouse. Thank you, Mr. Boling, I appreciate it.
    Our next witness is Dr. Vignesh Gowrishankar, who is a 
staff scientist in sustainable energy at the Natural Resources 
Defense Council. His work focuses on Federal and State 
policies, programs, and mechanisms to clean up natural gas 
production, help deploy cleaner resources across the electric 
grid, and promote greater industrial energy efficiency.
    Prior to joining NRDC, Dr. Gowrishankar served as a senior 
policy advisor on climate change adaptation and mitigation 
issues to the premier of the Australian state of Victoria and 
served as a management consultant with McKinsey & Company in a 
variety of industries. He earned his Ph.D. from Stanford 
University and his undergraduate degree at the Indian Institute 
of Technology Madras in Tamil Nadu, India. We are delighted to 
have him here.
    Please proceed, Dr. Gowrishankar.


    Mr. Gowrishankar. Thank you, Chairman Whitehouse, Ranking 
Member Inhofe, and Senator Vitter. Thank you for the 
opportunity to testify here today. My message today is simple: 
The Federal Government needs to do more to limit the release of 
methane and other pollutants from the production and 
distribution of natural gas. Absent such steps, the increased 
use of natural gas will aggravate smog, expose the public to 
more carcinogenic chemicals, and worsen climate change.
    The good news is that the technologies to reduce the 
release of these pollutants exist today and the oil and gas 
industry can actually make more money using them. Failure to 
employ these health and environment protecting technologies is 
a classic market failure.
    The leakage and sometimes intentional venting of gas occurs 
across the supply chain, from the production to transport. This 
releases harmful and toxic pollutants and methane, a highly 
potent greenhouse gas that accelerates and magnifies climate 
change. This is the right time to be discussing the topic of 
methane leakage, 1 year after Hurricane Sandy and close on the 
heels of the President's Climate Action Plan.
    According to the latest EPA data, methane leakage equals 
about 1.5 percent of all natural gas produced each year, and 
recent peer review literature has reported leakage as high as 7 
percent, or even more, in certain locations. To put that in 
perspective, at just 3 percent leakage, natural gas is no 
better than coal in terms of its contribution to near-term 
climate change. Continuing research on the precise level of 
leakage should not obscure the fundamental and incontrovertible 
point that natural gas is leaking into the atmosphere, wasting 
fuel, polluting the air, and damaging our climate; when, 
instead, that fuel could economically be put to use.
    The technologies to control emissions are not hard to 
understand at a basic level. They include such common sense 
steps as capturing the big release of gas that occurs when a 
well is fracked, using better seals for compressors and making 
sure they are properly maintained and functioning, ensuring 
that wells that control gas don't actually leak the gas, 
putting a sealed lid on storage tanks so that gas does not 
escape, and using detectors to identify when and where 
equipment is leaking. And there are many others. This equipment 
has been tried and tested, and is being manufactured and sold. 
A number of leading companies are using them in some of their 
operations and Dr. Allen's study further proves that they can 
be very effective.
    These technologies enable industry to capture and therefore 
sell the gas that is now leaking into the atmosphere. As a 
result, these technologies pay for themselves in short time, 
typically in just a few months to about 2 to 3 years. NRDC has 
identified 10 such technologies that are especially cost-
effective. Employing these 10 technologies could potentially 
reduce 60 to 80 percent of methane leakage, and possibly even 
more. Yet, using these proven, cost-effective technologies is 
not yet industry standard practice. This is a classic market 
failure. Industry is leaving money on the table and the public 
is paying the price for suffering the health and environmental 
harms of leakage.
    The EPA recently established standards that begin to cut 
this wasteful leakage, but these standards are too weak and 
will cut less than one-sixth of total emissions in the near 
term. EPA has the authority and obligation under current law to 
do more. EPA should be setting stronger standards that target 
methane directly and require emission controls for new and 
existing equipment already in the field; all types of wells, 
including oil wells that co-produce gas, such as those in North 
Dakota; all significant emission sources across the entire oil 
and gas supply chain. Such additional standards could actually 
benefit the entire economy and help royalty owners, U.S. 
equipment manufacturers and service providers, and well trained 
technicians, operators, and pipe fitters.
    Ultimately, the solution to climate change is moving away 
from fossil fuels entirely and relying on energy efficiency, 
renewables, and zero emission energy sources. Deploying these 
should be the primary goal of U.S. energy policy. But until 
then we need to ensure that the fossil fuels we do use have the 
lowest environmental footprint possible, and reducing leakage 
and venting of methane is one of the easiest things we can take 
in this regard. There is absolutely no excuse to delay action.
    Thank you again. I would be happy to take any questions.
    [The prepared statement of Mr. Gowrishankar follows:]
    Senator Whitehouse. Thank you very much, Dr. Gowrishankar.
    Our next witness is Mr. Darren Smith, who is the 
Environmental Manager for Devon Energy Corporation, a Fortune 
500 company headquartered in Senator Inhofe's home State in 
Oklahoma City. He served there since January 2009. Devon's oil 
and natural gas exploration production operations are focused 
onshore in the United States and Canada, and the company owns 
natural gas pipelines and treatment facilities in many of its 
producing areas, making it one of North America's largest 
processors of natural gas liquids.
    Mr. Smith earned his undergraduate degree in biology from 
the University of Western Ontario and he earned a Master of 
Science in environmental toxicology from the University of 
Wyoming-Laramie. We welcome him here today.
    Mr. Smith.


    Mr. Smith. Thank you, Chairman, for that introduction. 
Ranking Member Vitter and Ranking Member Inhofe, thank you for 
the opportunity to testify here today about this very important 
issue. My name is Darren Smith. I am Devon Energy's 
environmental policy manager.
    Devon Energy Corporation is a leading independent oil and 
natural gas exploration and production company with operations 
focused onshore in the U.S. and Canada. We operate in several 
of the major shale basins in the United States.
    Devon has been actively engaged in the last several years 
in efforts to demonstrate to EPA that its method of estimating 
methane emissions from oil and gas operations is fundamentally 
flawed and is resulting in gross overestimates. I testified to 
that effect last June and extensively described how this faulty 
data had been contaminating critical public policy research and 
    Since that time, Devon has continued to engage EPA in 
constructive dialog, providing method suggestions and data, 
some of its from EPA's own greenhouse gas reporting program, to 
encourage EPA to revise the factor that it uses to estimate 
methane emissions from hydraulically fractured natural gas 
    This work is ongoing and Devon remains encouraged that EPA 
will act swiftly to revise its data. The UT-EDF Fugitive 
Methane Study that we are discussing today, one that EPA, 
environmental groups, and industry hold in high regard, 
confirms what Devon has been telling EPA for the last 2 years, 
that its estimate for representing methane emissions from 
hydraulically fractured natural gas wells is an order of 
magnitude too high. The study confirms that this EPA estimate 
is in fact 50 times too high.
    The time for EPA to finally revise this erroneous emission 
data is now. There is both consensus and confidence in the data 
that industry has provided, in the data that has been provided 
to EPA under its greenhouse gas reporting program, and now in 
this peer-reviewed scientific study.
    Immediate action is vital because EPA estimates have been 
relied upon by researchers, financial analysts, and various 
policymakers as a basis for critical public policy 
considerations. In fact, a recently finalized EPA regulation on 
the oil and gas industry was justified using this inaccurate 
data. Equally troubling is a group of Northeastern States that 
is threatening to sue EPA if it doesn't propose additional 
emission requirements on the oil and gas sector. All this is 
driven by the Agency's use of this flawed data. EPA must 
immediately revise its data to more accurately reflect 
emissions associated with the source category before further 
harm is done.
    Devon applauds the researchers and the companies that 
participated in the UT-EDF study for their efforts to shed a 
necessary scientific light on the topic of fugitive methane 
emissions from oil and gas operations. It is unfortunate that 
some of the headlines and discussions surrounding the release 
of the study suggest that the low emission performance by the 
oil and gas industry is due solely to recent EPA regulation 
that forces industry to use emission control equipment. The 
study fails to recognize that, in fact, the industry had been 
already voluntarily using many of these controls prior to the 
EPA mandate, and I should add that the mandate that we are 
describing had been justified in part using the flawed emission 
estimate that we are talking about today.
    Despite the study's findings that emissions from 
hydraulically fractured wells are 50 times lower than what EPA 
previously estimated, the study concludes that, overall, when 
other methane emission sources are added, methane emissions 
from gas operations are about the same as EPA previously 
reported in their inventory.
    One source, pneumatic controllers, devices that use gas 
pressure from the well to maintain fluid levels at a well site 
when no electricity is available, were found by the study to 
emit more than EPA's prior estimate, thus offsetting the 
significant decline in emissions from completions with 
hydraulic fracturing. The end result is that the overall 
estimate of methane emissions from the entire system are about 
10 percent lower than EPA's.
    Many in the industry question whether conclusions about 
methane emissions from these pneumatic devices are premature 
since it is known that they will be studied further in phase 
two of the study, and the researchers have admitted ``There was 
significant geographic variability in the emissions rate from 
pneumatic controllers between production regions'' and, 
further, that ``emissions per controller from the Gulf Coast 
are highest and are statistically different than emissions from 
controllers in the Rocky Mountain and Appalachian regions'' 
and, further, ``the difference in average values is more than a 
factor of 10 between Rocky Mountain and Gulf Coast regions.''
    The bottom line here is that the researchers admittedly 
cannot explain this variability and have therefore correctly 
concluded that more study is needed in order to correctly 
establish what representative emissions are from these devices. 
We are confident that phase two of the study will ultimately 
show that a few high emission measurements in one part of the 
country are not indicative of the nationwide average. In fact, 
it is likely that phase two will lead to a downward revision of 
the emission estimates for these devices, from what was found 
in phase one, as we understand that three out of the four 
regions already studied have demonstrated low emissions from 
these devices.
    This would mean that the overall methane emissions from gas 
production would fall even further below the study's current 
estimate of .42 percent of gross production and remain less 
than one-third to one-sixth of what critics believe is 
necessary for natural gas to benefit the climate.
    One cannot lose sight of the fact that gas producers are in 
the business of selling methane and industry will continue to 
make important innovations to improve efficiency and further 
reduce emissions. Not only is this a reflection of a strong 
commitment to environmental stewardship, but it is in the 
companies' best interest to do so because methane leaks 
represent lost revenue. I am confident that future studies like 
the one we are discussing today will continue to reinforce this 
business fundamental.
    With that, this concludes my testimony. Thank you.
    [The prepared statement of Mr. Smith follows:]
    Senator Whitehouse. Thank you, Mr. Smith. I appreciate it.
    Our final witness is A. Daniel Hill, who is the department 
head and holder of the Noble Chair in petroleum engineering at 
Texas A&M University. Professor Hill also holds the Robert 
Whiting Endowed Chair. Prior to joining the faculty of Texas 
A&M, Dr. Hill taught for 22 years at the University of Texas at 
Austin, and before that, before entering academia, he spent 5 
years as an advanced research engineer with Marathon Oil 
Company. He serves on the Society of Petroleum Engineers 
Editorial Review Committee and chairs the Society of Petroleum 
Engineers Hydraulic Fracturing Technology Conference.
    He holds three degrees in chemical engineering, a bachelor 
of science from Texas A&M, a masters and doctorate from the 
University of Texas at Austin, and we are delighted to have him 
here today.
    Professor Hill.


    Mr. Hill. Thank you, Chairman Whitehouse and Ranking Member 
Inhofe and Senator Vitter. Good afternoon. I am Dan Hill. I am 
the head of the Harold Vance Petroleum Engineering Department 
at Texas A&M University. I have been a faculty member for over 
30 years, after working in industry for about 5 years.
    In recent years, one focus of my research has been various 
aspects of hydraulic fracturing of shale gas and oil 
reservoirs. Hydraulic fracturing, of course, is the key well 
completion technique that has enabled the production of huge 
quantities of natural gas and oil from shale reservoirs to the 
enormous benefit to the U.S. economy and to U.S. consumers.
    In February 2012, I was invited by Professor David Allen of 
the University of Texas to serve on the scientific advisory 
panel for the planned comprehensive study of methane emissions 
at natural gas production sites in the United States. As a 
member of the advisory panel for this methane emission study, I 
reviewed the planned measurement program, reviewed results 
partway through the study, reviewed the final results, and 
reviewed the publications describing the outcomes. Throughout 
the study, I was impressed with the careful and thorough 
approach of the study team. I would say that this was the 
unanimous opinion of the scientific advisory panel.
    Unconventional oil and gas production has changed the U.S. 
energy game. Production of natural gas and oil from 
unconventional reservoirs, primarily shale formations, is 
soaring, daily lessening this country's dependence on imported 
oil and natural gas. A slide that you Senators have is a 
history and forecast of U.S. natural gas supply. In less than 
10 years gas production from shale formations has grown to over 
30 percent of the U.S. supply and continues to grow. In fact, 
in a recent update to this 2011 forecast, the EIA is now 
predicting that the United States will be a net gas exporter 
before the year 2020. This is great news in every possible way: 
natural gas is the cleanest burning fossil fuel, it yields the 
least CO2, and it is low cost thanks to its newfound 
abundance in unconventional reservoirs.
    Thus, it is critical that development of natural gas 
production from shales continues in an environmentally 
responsible fashion. In my opinion, this study has alleviated 
the fear that large volumes of natural gas are emitted during 
the flowback period following hydraulic fracturing. However, 
the study did reveal significant sources of natural gas 
emissions occurring during other shale gas well operations.
    The measurement protocols used were sound and were properly 
applied. The validity of this study is founded on the 
measurement methods used and their correct application. The 
methods chosen were all proven from years of prior practice and 
were properly calibrated and applied in this study.
    The study is comprehensive. In this study, methane 
emissions were measured at 190 well sites, with 489 
hydraulically fractured gas wells at these sites. The well 
sites were located in the Gulf Coast, the Mid-Continent, Rocky 
Mountain, and the Appalachian regions of the U.S. Slide 4 shows 
the regions studied. The measures were made on sufficient 
numbers of well sites to make the results statistically valid 
and extrapolatable.
    Methane emissions during hydraulic fracturing flowback 
operations are 36 times less than that estimated in the EPA's 
2011 greenhouse gas inventory. The most important finding of 
this study is that methane emissions during the flowback period 
immediately following hydraulic fracturing are dramatically 
less than that estimated by the EPA in its 2011 greenhouse gas 
inventory, more than 36 times less. The EPA estimate was not 
based on actual measured methane emissions, as this study is, 
but simply assumed a certain percentage of all methane produced 
during flowback was emitted. Obviously, the assumed percentage 
emitted was too high, 36 times too high.
    Significant volumes of methane are being emitted from 
pneumatic controllers, from pumps, and from leaks. The study 
found that emissions from these devices exceed the 2011 EPA 
estimates and are by far the largest sources of methane 
emissions at shale gas well sites. Many of these emission 
sources are easily reducible.
    More study of methane emissions during gas well unloading 
is needed. In this study, only nine gas well unloading events 
were monitored for methane emission, and in only three of 
these, all located in the Gulf Coast region, significant 
methane emissions occurred. The range of emissions measured 
during these few tests were extremely variable and not easily 
generalizable. I recommend that a comprehensive study of 
methane emissions during unloading be conducted, following 
protocols like those used in this study, and apparently some 
are already underway.
    Fugitive methane emissions are only .42 percent of the 
produced gas from shale wells. This study has shown that amount 
is produced from shale well sites and emitted to the 
atmosphere. It also showed that the large majority of emissions 
occurred during normal production and is not related to 
flowback after hydraulic fracturing. It is instructive to 
realize that .42 percent of current U.S. shale gas production 
is about 42 billion cubic feet per year, which even at current 
low prices has a value of about $150 million. This is a 
significant economic target for the industry to capture by 
applying improved practices and developing new technologies.
    Thank you.
    [The prepared statement of Mr. Hill follows:]
    Senator Whitehouse. Thank you very much, Professor Hill.
    Just to put this into perspective, why is it that we are 
concerned about fugitive methane?
    Mr. Hill. Why is it? I think the primary concern is its 
role as a greenhouse gas.
    Senator Whitehouse. And its role as a greenhouse gas is 
    Mr. Hill. I am sorry, sir?
    Senator Whitehouse. Its role as a greenhouse gas is what?
    Mr. Hill. Well, it has a greater effect on a per mass 
basis, much greater effect, apparently, than CO2 as 
a greenhouse gas.
    Senator Whitehouse. Unless it is burned.
    Mr. Hill. Yes.
    Senator Whitehouse. Than it is CO2.
    Mr. Hill. Yes.
    Senator Whitehouse. OK.
    Mr. Boling, we have heard considerable testimony today 
about the value of the fugitive methane and there is a lawsuit 
in, I think, South or North Dakota over the loss to the mineral 
owners, alleging, again, very significant value. Given that the 
value is there and given that these companies tend to be in 
that business, why is it that the market itself hasn't solved 
this problem?
    Mr. Boling. I think that really depends on the situation. 
With respect to the Bakken, a lot of that gas is flared simply 
because there is not sufficient infrastructure in place to 
allow the gas to be economically gathered and sold. Obviously, 
at some point in time the volumes that get flared become very, 
very significant and something needs to be done, but I think 
that is really the answer to that question, is that the 
infrastructure is not there to support it.
    Senator Whitehouse. And how about the losses during normal 
production, the ones that were underestimated by EPA and shown 
to have been larger by the UT study that are further along in 
the process? That wasn't all lack of infrastructure, correct?
    Mr. Boling. That is correct.
    Senator Whitehouse. And why do you suspect it is happening 
in those cases, where the lack of infrastructure isn't the 
    Mr. Boling. Well, I think that one of the issues, really, 
is I know that it does sound like a no-brainer, so to speak, 
that if it is going to make everyone money, why wouldn't you do 
it, but that presupposes you are not in a capital-constrained 
environment in terms of the investments being made by industry. 
And, in certain cases, if they feel like those dollars can go 
into things that can probably make them more money, they may 
not necessarily do it.
    Senator Whitehouse. Got it.
    Dr. Allen, on balance, I gather, your study has come 
moderately close to supporting the EPA's overall numbers, but 
it shows dramatic differences in the place within the 
production sector where the leaks are taking place. Can you 
comment on the difference between potential and actual methane 
emissions from hydraulically fractured wells?
    I ask unanimous consent to have, for the record, an exhibit 
that has gone up to your right side that you can see that shows 
the EPA 2011 numbers and the numbers from your report, and 
obviously it is a dramatic reduction in the top line, 
completion flowbacks from hydraulic fracturing.
    Mr. Allen. Thank you for that question, Chairman 
Whitehouse. In our work, and also in the EPA national 
inventory, potential emissions are defined as methane that 
might get into the atmosphere. So in the context, for example, 
of completion flowbacks, it would be the methane that leaves 
the wellhead. If all of that is released to the atmosphere, 
then those potential emissions become the actual emissions. For 
completion flowbacks, what we found was that our measurements 
of what was leaving the wellhead were actually quite similar to 
EPA's estimates of potential emissions.
    What we found was that when reduced emission completion 
equipment was in place, it was very effective in reducing those 
actual emissions to the atmosphere, hence, leading to this 
large reduction. So the potential emissions are mitigated by 
control technologies, and the difference between what gets into 
the atmosphere and the potential emissions depends on how 
widely those control practices are applied and how effective 
they are.
    Senator Whitehouse. We have heard testimony that these 
control technologies are both fairly common, not complicated, 
not complex, and also highly effective. Can you confirm that 
testimony from the point of view of your study?
    Mr. Allen. Our study definitely confirms that reduced 
emission completions are highly effective. We can comment on 
the data that we measured. We went to 27 completion flowbacks. 
For two-thirds of those we found this type of equipment in 
place. This was for the nine companies that agreed to 
participate in our study. So, in this case, what we observed 
was that two-thirds of the flowbacks had this reduced emission 
completion equipment in place.
    Senator Whitehouse. Thank you.
    We can do a second round, but I will abide by the timing 
and yield to our ranking member.
    [The referenced information was not received at time of 
    Senator Inhofe. Thank you, Mr. Chairman.
    One of the issues that you reveal is that the emissions 
from pneumatic pumps were higher than previously thought. Is 
this something the industry recognized?
    Mr. Smith. No, I am not precisely sure that industry 
anticipated these results, Senator.
    Senator Inhofe. All right. How much do you think is a 
maintenance issue versus an equipment issue?
    Mr. Smith. Well, I think, not being a participant in the 
study, I am not certain whether or not maintenance practices 
were evaluated by the team as a cause for the difference 
between kind of published emission rates and what was measured 
in the field, but I do know that this equipment, when it is 
installed in the field, it is subjected to pretty harsh 
conditions and maintenance needs to be an element to keep the 
equipment working as it is designed.
    Senator Inhofe. And I would assume, then, Devon and you 
might also, Mr. Boling, agree with this and the rest of 
industry. Do you really think you need regulations to motivate 
these changes that are being talked about today?
    Mr. Smith. Is that a question to me?
    Senator Inhofe. It is a question, yes, to you, Mr. Smith. 
In other words, doesn't it inure to your benefit to do this 
without regulations?
    Mr. Smith. As I mentioned in my testimony, a lot of the 
control technologies that have been discussed today are already 
being conducted by industry, and we have data from industry 
that suggests that, for instance, green completion equipment is 
being deployed very consistently across the industry. So the 
incentive, I think, to employ these control technologies is 
already there. I think an important thing to recognize is that, 
and I think this is maybe a little counterintuitive to some, 
but I think there is some belief that in this condition of low 
gas prices, that because gas is maybe not worth so much, that 
companies aren't paying as much attention to leaks of it.
    But in reality, the inverse is really true, because if you 
consider a company needing to make profits from these wells, 
the only way that a company can offset our operating costs of 
these wells is to really, if you will, scrape the bottom of the 
barrel to really capture and sell every cubic foot of gas that 
we can. Otherwise, if we can't offset the operations costs of 
these wells, because, of course, operations costs are 
independent of what gas prices are, to a large part. If we 
can't offset our operations costs, then these wells are 
operating at a loss.
    So even in conditions of low gas prices there is a strong 
incentive for energy companies to capture every cubic foot of 
gas that they can.
    Senator Inhofe. Yes, that is right. Of course, you heard my 
comments in opening statement. I talked about the benefits of 
increasing our exports that would put us in a position. Right 
now you have huge supply, but the demand is down. This could 
change that around so that you would be in a position, and Mr. 
Boling, you would be in a position to have the benefits of the 
profits to make these changes that might not be economically 
feasible at today's market. Is that inaccurate? I have been 
trying to make the case and I have made some talks on the floor 
about exporting LNG.
    Mr. Smith. And this kind of demand certainty that would 
surround LNG export. Again, I think the incentive for operators 
to reduce leaks is maybe not so much driven by our forecast for 
demand certainty as much as it is about really trying to 
maximize profits and really, again, in these low conditions of 
gas prices, to certainly generate enough revenue to offset our 
operating costs in many areas.
    Senator Inhofe. I got the impression, Dr. Gowrishankar, 
that you had said there is technology out there that some of 
these companies are not using, and the question I am asking 
them is it because the volume they are dealing with doesn't 
justify the cost of making these changes.
    Mr. Gowrishankar. Our analysis suggests that potentially 
the primary reason for them not being used more widely goes 
back to the question of capital constraints and other strategic 
initiatives that may potentially make more sense for the 
    But in our view, these standards that require the control 
of these emissions make sense; they are profitable and that, I 
think, is pretty much undeniable. They are profitable and cost-
effective and they, therefore, must be used to control these 
emissions. And there is no evidence to suggest that it is being 
used widely. There are some companies that are doing it, but 
voluntary action has not been sufficient.
    Senator Inhofe. So you are contending that we need 
regulations to force that?
    Mr. Gowrishankar. Yes. We think regulations must be in 
place to level the playing field, fix the market failure, and 
ensure that these standards are adopted across the country by 
all producers; not just the leading ones, but everybody.
    Senator Inhofe. If you don't mind my going a little bit 
longer, because I won't be able to stay for a second round. 
Just one other question.
    Dr. Hill, from what I understand, a portion of the Federal 
royalties from the oil and gas operations goes toward ongoing 
research on oil and gas resources. We have talked about this 
for a long period of time. Because of this, the Federal 
Government has actually played a big role in collaborating with 
industry to unlock the shale revolution. But the program that 
manages the selection of the projects to fund expires next 
year. Can you tell us how extending the program will help 
foster voluntary collaboration and innovation, the benefits 
that would come with that?
    Mr. Hill. Yes, Senator. I would be happy to. The program 
you are mentioning is called the Research Partnership to Secure 
Energy for America. It has been underway, it is in its seventh 
year now and this program has funded $50 million a year of 
research from royalty funds, Federal royalty money to support 
research on unconventional resource development, shale 
primarily, and the second major area is deepwater oil and gas 
development. This has been a very successful program; it 
supports research at many universities across the country, 
educated a lot of engineers for this burgeoning industry and 
helped a great deal in developing the technology that has led 
to these efficiencies.
    There is a lot more to be done. A lot of the work that the 
RPSEA, as it is referred to, program is conducting right now is 
aimed more to the environmental side, a lot of studies on water 
usage, for example, minimizing fresh water usage and fracturing 
operations. So it is a program that has done a lot for this 
country, a lot for this development of shale gas and oil in 
    Senator Inhofe. Do you think this should be reauthorized? 
We have a lot of good programs, Mr. Chairman, of cooperation. 
Partnership and Wildlife is one that has been very, very 
successful. This is another example.
    Mr. Hill. Yes. I think it would be wonderful if this could 
be reauthorized.
    Senator Whitehouse. Senator Vitter.
    Senator Vitter. Thank you.
    Thank you all very much. Very impressive panel, 
particularly given that a UT and an A&M presence sat at the 
same table, albeit separated.
    Senator Vitter. I want to go back to the sort of summary of 
the study. I know none of you have said this, but make sure 
there is no misconception of it. In a sense, the overall 
summary could be EPA was way off in terms of estimates about 
the fracking process. They underestimated leakage from 
pneumatic devices, et cetera, and overall they were in the 
ballpark, maybe 10 percent off. But I want to make sure 
everybody agrees. The subcategories do matter in terms of 
policy and responsible policy and moving forward. It is 
certainly important that we understand where the problem is or 
the opportunity for improvement is and where it doesn't. Does 
everybody agree with that?
    Dr. Allen. Everybody can respond.
    Mr. Allen. Thank you, Senator Vitter. We feel the major 
contribution of our study is identifying where the major 
emissions are so whatever action is appropriate can be taken 
based on measurements of where the emissions are, and what we 
found was emissions from hydraulic fracturing completion 
flowbacks are very low when reduced emission completion 
equipment is in place and pneumatics were higher than we 
    Senator Vitter. So does everybody agree that those 
subcategories absolutely matter and we have a lot to learn from 
those specific subcategory conclusions, even if it is some sort 
of general wash within 10 percent overall?
    Mr. Boling. I agree that the subcategories are very 
important. I would caution, however, that when we are talking 
about the emissions and conclusions to be drawn from the study, 
while it is clear that EPA's estimates of the actual, net 
emissions were much higher than the study, when you talk about 
potential emissions, as was mentioned previously, the potential 
emissions are pretty comparable. So it really is a question of 
production characteristics of the well and the period of time 
that the well is allowed to flowback. And if you get into a 
situation where the well either is not flowed back for a long 
period of time or you have REC completions, then you will have 
much less net emissions, even though the potential emissions 
could still very well be the same.
    Senator Vitter. Right.
    Mr. Smith, I think as early as 2010 Devon had initiated a 
project aimed at reducing emissions from pneumatic controllers, 
one of those specific areas we have been talking about. Can you 
go into a little detail about what you and other industry 
leaders have been doing there voluntarily?
    Mr. Smith. Yes. At Devon, we are proud to have written, as 
far as I know, the only carbon methodology for creating 
fungible emission credits from emission reductions in the oil 
and gas sector, and we did that with a methodology for the 
retrofit of pneumatic controllers. So it is taking high-bleed 
pneumatic controllers out of service and replacing them with 
low-bleed pneumatic controllers. And that methodology is 
available to the public, so any industry could use that and 
establish carbon credits for it.
    The topic about what else we are doing to reduce methane 
emissions, unfortunately, we don't have near enough time to 
take you through that, but I will say that in addition to 
focusing on reducing emissions from pneumatic controllers, 
Devon was one of the pioneers in green completion reductions, 
one of the earliest companies that were doing green 
completions, so we are very familiar with that; we do it 
everywhere in our operation.
    The other thing we do is that we have surveyed our 
operation. We don't have a wet seal on any one of our 
compressors. And without going into a bunch of technical detail 
about what a wet seal is, it is a much higher emitting device 
than a dry seal. So we don't have any wet seals in our 
    Also we are really centralizing a lot of our production 
equipment so that some of the control equipment that is outside 
of its operating range at individual well sites is now feasible 
when you kind of aggregate more equipment together. So we are 
doing a lot of things, and not just us, but industry is doing a 
lot of things to be proactive in reducing methane emissions 
    Senator Vitter. Great. Thank you all very much.
    Senator Whitehouse. Thank you, Senator.
    I would like to call up a chart that a smaller version I 
will make a part of the record, without objection. This is 
based on EDF information. I think Dr. Allen is familiar with 
it; perhaps Dr. Gowrishankar is as well. And what it shows is 
the ratio between the amount of fugitive methane that is 
released and how natural gas competes with other fuels in terms 
of being a better or worse carbon alternative, environmental 
    And you will see that although we are talking about very, 
very low numbers, 0.42 percent, we are dealing with very low 
numbers here. If you have 1 percent emitted of natural gas, not 
burned, but just emitted, then you don't break even with heavy 
duty diesel, I can't even read it, the lines are so close, it 
looks like for about 40 years. And if you are emitting 2 
percent, you don't break even with gasoline for 40 years. And 
if you go to 4 percent, then you don't break even even with 
coal for 40 years.
    So the question of how much methane gets away is vital to 
protecting, frankly, the marketing position of natural as 
against competing fuels in the minds of a public that is 
increasingly sensitive to these concerns. So I hope that this 
helps explain why we are so concerned about this and why I 
think this is a great opportunity for the industry and for the 
environmental community and Congress to all work together to 
solve this problem, because if worse gets out that if it is 
leaking in substantial amounts and that is causing natural gas 
to have to reverse a lot of the things that folks like the ANJ 
are saying all the time about the environmental value of 
natural gas compared to other fuels, then that is going to 
have, I think, an unfortunate effect on the market and on the 
credibility of the gas industry and so forth.
    So I think it is really important that we get this right. I 
think the fact that the technology is as well established as it 
is, particularly through the leading companies, and I want to 
particularly recognize Devon and Southwestern for being here, 
is a very good sign. And the fact that even though it might not 
be the highest return in use of capital, the fact that it is a 
net positive use of capital for companies shows that this is 
the type of regulation that really, in fact, can be a win-win.
    So I thank everybody for being here.
    Just to make sure that the record is completely clear, I 
have asked Professor Hill this question, but, Mr. Smith, on 
behalf of Devon Energy, why is it that we want to limit the 
fugitive emission of methane?
    Mr. Smith. Well, from a company standpoint, and, of course, 
I recognize the global warming potential of methane and all 
that, but from a business perspective it is a responsibility to 
our shareholders to produce as much from our wells as they are 
funding us to do that.
    Senator Whitehouse. And describe the other reason that 
doesn't affect your shareholders so directly, but affects the 
rest of all of us.
    Mr. Smith. It is recognized as a greenhouse gas, that is 
absolutely right. We certainly would not deny that.
    Senator Whitehouse. And it, if released, will do what?
    Mr. Smith. Well, maybe you are pushing me into an area 
that, first of all, I am not an expert.
    Senator Whitehouse. Generally. You are the environmental 
manager for a very big energy corporation.
    Mr. Smith. Right.
    Senator Whitehouse. I am not asking you complicated 
    Mr. Smith. It is not a complicated question.
    Senator Whitehouse. Methane in the atmosphere does what?
    Mr. Smith. It is believed to cause global warming.
    Senator Whitehouse. Because it traps solar heat.
    Mr. Smith. Traps heat.
    Senator Whitehouse. All right.
    One last question. When Senator Inhofe was asking, I guess, 
Mr. Smith about the maintenance versus equipment question, Dr. 
Allen, you were making notes as if you wanted to add something. 
I am not sure if you were just making notes. Did you have 
anything to add to that discussion or are we all set here?
    Mr. Allen. No, I just make notes.
    Senator Whitehouse. OK, terrific. Then I won't press 
anything further.
    Let me just thank all of you very much. This has been a 
very helpful panel and, Dr. Allen, the work that you have done 
obviously has made a very significant impact and I hope will 
help inform this policy debate. A lot of hard work went into 
it. I appreciate it very much.
    Mr. Boling, thank you for the forward stance that 
Southwestern has shown and the very powerful way that you have 
brought industry and environmental leadership together in a way 
that I think does have this win-win potential. I am grateful to 
both of you.
    Dr. Gowrishankar, thank you for your research with NRDC.
    To our witnesses from Devon and from Texas A&M, again, 
thank you both for the expertise you brought to this hearing.
    The hearing record will remain open for Senators to submit 
any written questions for 2 weeks. You think you are free of 
us, but you are not quite free; we might come after you with 
written questions for another 2 weeks. If you would be kind 
enough to reply to those questions, we obviously would be very 
    With that, the hearing is adjourned. Thank you all so much.
    [Whereupon, at 4 p.m. the Subcommittee was adjourned.]