Subpart W - “Flare Accounting”

Updated: Jun 29

Flaring occurs when gas capture is not possible, or as an emission control for uncaptured gas streams. Another frequent contributor to flaring activity stems from absent or incomplete infrastructure of pipelines to carry the natural gas to market. As one of the primary emission sources in the oil and gas sector, there are a myriad of flare reporting requirements for operators – these can be regulatory or non-regulatory based. High-level factors affecting requirements are geographic location, PTE/actuals, site type and operation, royalty accounting, internal operator metrics for emission reductions - this list goes on.

On a federal level, a primary requirement is operator compliance with Subpart W, the nation’s GHG mandatory reporting rule finalized in 2009 and later modified in 2010 to include the oil and gas sector. Subpart W is widely accepted as the industry standard for calculating and reporting direct GHG emissions across the oil gas industry segments.

Several emission sources are typically targeted when the annual GHG emissions are published and made public on the EPA GHG website. Flaring is often scrutinized as it represents a significant component of GHG emissions for certain operations or geographic areas. While the publicly available data is limited to emission totals and basic visuals showing operator comparisons, there is another level of data validation and regulatory scrutiny that is not broadcasted. This includes additional EPA messages to reporting companies that might address any part of the report or regulation. We will focus on flaring as it receives considerable attention from the EPA and the public.

When an annual GHG report is submitted, the EPA runs automated tests to highlight reported data that is outside expected ranges – this triggers questions to the reporting company. The questions can be addressed without significant changes to the report assuming no errors or data completeness issues are identified. Other times, the initial questions can lead to larger-scale efforts to revise annual GHG reports to address errors or data completeness.

The EPA’s effort to confirm data in the annual GHG report has been an integral component to Subpart W compliance – messages and correspondence between the EPA and a reporting company are common. The challenge can often be related to the rigid report used for Subpart W and uploaded via the electronic greenhouse gas reporting tool or e-GGRT. e-GGRT has improved since its inception, but it can cause headaches – nonetheless the EPA collects GHG emission data through e-GGRT for reporting companies across all industries reporting under the MRR. At Amerigo, we often see correspondence between EPA and reporting company designed to address any confusion on EPA’s part or with intention of improving accuracy.

Subpart W includes a variety of source-specific categories to calculate and report flaring emissions. The categories are written to cover any type of normal/routine oil and gas activities with flaring associated. Often, companies approach the reporting of flare emissions differently. Company X might report flaring as associated gas flaring (98.233(m)) while Company Y reports the same flaring emissions under 98.233(m) + flare stacks (98.233(n)). Company Z might report the same emissions under 98.233(n) flare stacks only.

The EPA acknowledges that the example of Company X/Y/Z reporting flaring under different categories can and will occur. There are no indications this will change and given the potential differences in reporting, the flare data requirements are consistent with the EPA’s allowance for flaring emissions to be reported uniquely – as long as the supporting data is there!

The EPA’s GHG Reporting Page (GHGRP) website summarizes the Subpart W flare data requirements in the FAQ and Confluence sections. The clarification is summarized in two bullets:

  1. GHG flaring emissions should not be double counted as described in 98.233(n)(9)

  2. GHG flaring emissions are reported under source-specific category or flare stacks - with the additional requirement that all monitoring information is to be reported under flare stacks regardless of the source-specific category where the flaring emissions are reported.

Insert “flaring accounting” - the industry vernacular for complying with those items. Item #1 cites 98.233(n)(9) which requires flare emissions reported under the flare stacks category to be reduced by the flare emissions calculated and reported under other source-specific categories - simply put, do not double count emissions.

For item #2, company’s face a twofold effort of calculating flaring emissions and reporting within a source-specific category and providing the supplemental volume and compositional averages for the stream(s) to flare in the flare stacks category. Basically, there are two areas to report data for those flares in the annual GHG report: actual emissions are reported in the source-specific category while the monitoring/data requirements that characterize the streams to the flare are submitted under flare stacks.

Any operation with hundreds or thousands of flares face the challenge of “accounting” for those flares that are receiving multiple streams with different volumes and compositions.

The EPA requires that flaring emissions reported under Subpart W must include the total annual volume of gas to the flare and the (weighted) mole fraction averages for CO2 and CH4 to flare. If an e-GGRT report is submitted without this flare data, the EPA sends its data quality and completeness messages until the company satisfies the EPA messages. Otherwise, the messages can be considered unresolved.

The challenge to produce accurate GHG emission data has reached a critical stage for both the regulated and the regulating communities. Flaring is challenging as oil and gas operators’ attempt to satisfy EPA requirements can be labor-intensive. A solution that covers the flaring data and simplifies the reporting structure for companies is not impossible but is unlikely due to volume of reporting companies and the variety of Subpart W sources covered via e-GGRT.

Required flare data will not likely affect overall emissions totals or intensities, but a company that can successfully report the flare monitoring/data requirements will have granularity to address issues with EPA and in turn have transparency on their operational flaring. Industry efforts to implement efficiencies and emission reductions hinges on both the accuracy of actual GHG calculations AND the ability to satisfy regulatory reporting requirements without data completeness/validation errors.

This concept of “flaring accounting” can be foreign to those unfamiliar with Subpart W. We produced a few graphics and applicability flowchart to help illustrate the effort - download the PDF below.

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GHG Flare PDF - Click and Download
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