 My name is Frank Verastro. I'm a Senior Vice President here at the Center, and I have the Schlesinger Chair in Energy and Geopolitics. And it's my extreme pleasure to have this session this morning. We've been talking for the last two and a half years, actually longer than that, about the shale gas revolution. And today we want to talk about some of the issues around the shale gas revolution, and specifically we're going to deal with how you realize that potential and at the same time address a significant problem that goes along with methane emissions. This particular session was actually the exception of it was probably over a year ago. I had breakfast with Fred Krupp and Mark Brownstein, and we talked about how we have this balancing from a policy perspective to make sure that we get it all right, that we do it safer, cleaner, smarter, keep the economy going, but also manage those issues that come to the fore when you look at the volume of production. We're pleased today, since we are cosponsoring this with EDF to have Steve Hamburg and also Drew Nelson with us that just shows the collaboration between CSIS and EDF, we've done a number of different issues with them, including the UT study initially on methane. And it's just really important that we figure out how to find a path forward. The shale gas revolution we've experiencing over the past six years, it's produced enormous economic security energy benefits. And it's also been good for the environment as it's reduced our emissions as we've backed out coal in the power generation sector. Production is up over 400% since 2008, yet methane emissions from oil and gas operations have actually declined. According to EPA, methane is the second most prevalent greenhouse gas emitted in the United States and it's from human activities and comes from a variety of sources. So landfill, livestock and agricultural activity, fermentation, mining, oil and gas production, transmission, processing and distribution. It's also the largest component of natural gas, not surprisingly, and it's more potent though also more short-lived than CO2 as a greenhouse gas. For those of you that responded to this invitation in an earlier email where we had the schedule, we had invited John Podesta, I had sat with him at a lunch we had at the White House, and he wanted to come talk about this issue as we were getting towards the end of the year and hopefully in this town where timing is almost as important as substance, we thought we would have the EPA proposal at this time. Well, we learned at two o'clock on Friday that John wasn't able to join us, so we're gonna run the two panels that we have kind of back-to-back and Janet McCabe from EPA will join us as the first speaker on that second panel. We're gonna be in this morning with the science panel that's gonna look at the impacts of methane and we have Dr. David Allen and Steve Hamburg. I keep saying that to kick off that discussion which will be moderated by Drew, EDF senior manager for natural gas. Then we'll proceed to a second panel that will kick off with Janet McCabe and we have Martha joining us from Colorado. We have a number of practitioners in the field, big and small, upstream and downstream to get a full flavor of what's going on in the United States and it's a good representative cross-section. In our typical policy and format, the session is on the record with the approval of our presenters. We will post these slides in PDF form, probably not today, but maybe tomorrow morning. We want to provide time at the end so all of you can have access to the speakers so we will have a lively discussion and then open it up for Q and A. And with that comment, let me turn it over to Drew and thank you all for coming and we're looking forward to an informative and exciting event, so thanks very much. Thank you, Frank, and thanks for all of you here in the audience and those listening on the webcast. I think this is gonna be a great event. We're gonna start off this morning with the science panel. I have the great honor to introduce both Dr. David Allen and Dr. Stephen Hamburg, who I work with quite closely on the day-to-day basis. So it's great to share a panel with these guys. Dr. Allen is the Gertz Chair for, Gertz Regents Chair and Chemical Engineering and Director of the Center for Energy and Environmental Resources at the University of Texas. He's done an incredible amount of work on air quality issues in the state of Texas and has led multiple studies on the issue of methane from natural gas emissions, so it's gonna be great to hear from him today. Dr. Hamburg is the Chief Scientist at the Environmental Defense Fund, or he's been in that role for several years. Prior to joining EDF, Dr. Hamburg was at Brown University, has done a lot of work on climate change, including with the Intergovernmental Panel on Climate Change. So rather than going through the detailed biographies of both of these distinguished speakers, we're just gonna jump right in. Both panelists will speak for about 15 minutes or so. As the moderator, I'll ask a couple of questions and then we'll turn it over to you as the audience to ask some questions. So be thinking what questions you might ask. And with that, over to you, Dr. Allen. Thank you, Drew. I'm gonna give a brief overview of what we know about methane emissions from man-made sources in the United States, particularly. So how do we estimate or measure these methane emissions? And we all know that much of this interest is being driven by the increased production of natural gas. And here you see energy information administration about the projections of natural gas production going forward. And as has been noted in the introductions, methane is a potent greenhouse gas. Exactly how potent we won't dive into the details of, but depending on the time horizon, it may be between 28 and more than a hundred times as potent as carbon dioxide, hence the interest in methane. As was noted, the three principal sources of methane emissions in the United States from man-made sources are the energy sector, the agricultural sector, and landfills. These are shown on this pie chart representing the most recent Environmental Protection Agency National Inventory. So energy, ag, and landfills largest single anthropogenic sources, but limited measurements have been available to support these national estimates. So over the last several years, in many cases with studies catalyzed by Environmental Defense Fund, there've been a series of measurements that have been made to try and improve our understanding of what these methane emissions are. And they're generally categorized into either bottom up or top down approaches. And here you see images that broadly represent those types of measurement approaches. So in the middle left, you see a member of our field team out on a natural gas site making a measurement of methane emissions directly at the source. That's characteristically referred to as the bottom up approach. You go directly to the emission source and make a measurement on that. The top down approaches are perhaps best characterized by the satellite images that you see as well as aircraft overflights. These are all complimentary techniques. They provide different sorts of information about what these emissions are. Unless you have questions, I won't delve into the details, but let's look broadly at what these studies are telling us. For the top down measurements, there's a broad consensus as summarized in recent reviews by Miller et al and the Proceedings of the National Academy and Adam Brand from Stanford in the journal Science earlier this year that conclude that these top down approaches, so think airplane satellites, other types of ways of looking down on a particular geographical region and estimating what the emissions are, are indicating that the emissions are about 50% lower than the current inventory to emissions that we would get from a bottom up type of approach. So there's broad consensus that this is about the right number, that we're missing some emission sources, but a key question is, which sources? That's what the bottom up measurements tell us. We go source by source by source by source and start making measurements, trying to determine which ones might be underestimated, which ones might be overestimated. How can we get a reconciliation between these two different types of approaches? So complimentary approaches, again, what are they telling us? Let's look broadly first starting in the right hand column with the top down. So at national and regional levels, the top down studies are telling us that emissions, both broadly overall of methane and also more specifically from natural gas may be underestimated, but there is a great deal of regional variability. What do the bottom up studies tell us? Here I'm drawing some from much of the work done and already published by the University of Texas together with EDF and our industrial sponsors that tell us that emissions from some sources are going down and therefore are somewhat lower than anticipated using current inventories. And a good example of that are emissions from well-completion flowbacks where new source performance standards are in fact causing those emissions to go down as very effective technological solutions to put in place. In other cases, the emissions are higher than we anticipate. And again, an example is given there in this case, a device called a pneumatic controllers. A final feature is that the emissions tend to be dominated by a small subset of the emitting population. So I'll use an analogy here with passenger vehicles. It's been known in the air quality community for decades that roughly 10% of the on-road vehicles give us 50% of the on-road vehicle emissions. And we've all driven behind such vehicles. We have a similar sort of skewed distribution in some of the source categories here. And again, regional and temporal variability. So that's broadly what these studies are telling us. What I'd like to do now is just characterize broadly how do we begin to reconcile these two different types of studies. The bottom-up studies may tell us about specific parts of the very extensive natural gas supply chain. Typically the top-down studies integrate across multiple parts of the supply chain. And let me just focus on a couple of issues here that I mentioned in the summary slide. The first is regional variability. And I would make the argument that if we're very careful about looking at our top-down and bottom-up analyses, that we can begin to reconcile these successfully. Let me give you a recent example. The image that you see on the upper part of this slide was published in geophysical research letters earlier this year by a group led by Caltech and JPL and noted and emissions hotspot between 2003 and 2009 before the shale gas revolution in the four corners area. If you do a careful look at the most recent inventories, what you find is, in fact, we would expect that, not based on national averages, not based on broadly looking at the supply chain, but by looking at specific sources in specific regions. Yes, that's there in the inventory. Let's also look at this characteristic of fat tails that a small subpopulation accounts for a majority of emissions in a number of these source categories. And just from the work done at the University of Texas, we can put into that list of sources that have fat tails, equipment leaks, pneumatic controllers, emissions from liquid unloadings. Won't dwell on exactly what all those sources are, but the point is a variety of these sources have this characteristic. The subpopulation in this fat tail can change over time. Sometimes it might be a malfunctioning device. Other times it might be a change in the way a well or other source operates. But the fact that you have this small subpopulation that is dominating emissions makes going out and making measurements on a few devices and then extrapolating up to regional or national levels a challenge, not that it can't be done, but it needs to be done very carefully and very thoroughly. And also this of course has implications for programs designed to reduce emissions. Another thing that we need to be careful of is that we reconcile in time when these emissions are occurring. And so what I'm showing you here on the right is an animation from the Energy Information Administration showing wells going into the Barnett Shale by year and the Barnett Shale is located in North Central Texas as you see in the lower right inset. And the point is that you need to be exactly comparing in time when things happen because what is on the ground is changing very rapidly. So as we're going and doing these reconciliations about what emissions are, we need to do that very thoroughly and it's hard work. Finally, there are challenges in reporting emissions. So very often there's a tendency to try and summarize everything with a single number, often expressed as a percentage of the total flow of natural gas that presents a number of challenges. These different studies represent different portions of the supply chain. They represent different spatial scales. They represent different temporal scales and the percentages are just defined differently by different investigators in the literature. So again, what we need is a very careful approach. The central message that I'll leave with you is that we have, for the last several years in the scientific literature, seen an explosion of information about what these methane emissions are and that all of these techniques that are being employed give us complementary information. And if we're very careful, I would argue we can reconcile these and the information we're beginning to see is actually quite consistent. With that, I'll turn it over to Steve and he will also make some remarks before we begin with questions. Thanks, Dave, and let's see if it transitions. There we go, look at that, technology works. So I'm gonna zoom out and then back in again. And one of the things, so Dave did a great job of setting up sort of what's happening on the ground within understanding methane emissions from the natural gas supply chain. But we have to remember first, we have to go back to why are we thinking about methane in particular. And Dave mentioned that it's a potent greenhouse gas that is short-lived. And that we have to recognize that we really have two classes of greenhouse gases and that they function in the climate very differently. So we have short-lived climate pollutants and we have long-lived climate pollutants. The short-lived determine the rate, effectively determine the rate at which the climate is changing now, so over the next few decades. The long-lived determine what my great-grandchildren's great-grandchildren are going to see as legacy of my activities. And they are both important, but they function differently in the climate. So we need to think about this, what I refer to as the and proposition. We need to deal with both. They both are important. And as Dave mentioned, this is a curve of the decomposition of methane and CO2. And in the case of CO2, it's actually not decomposing, it's being taken up by the oceans and the terrestrial biosphere. And then as it goes out to 200 years, we have 200 years on the X axis and then the proportion. So 100% when it's emitted down to zero is out there staying out in the atmosphere for a very long time, millennia. The methane, in fact, though, goes down quickly. It does react. And it does turn into CO2, relatively speaking, quickly on a matter of decades. And that timeframe is important as we think about this problem. This is a greenhouse gas that is going to affect us in the shorter term and it's a very powerful tool for reducing the rate of climate change. And this graphic just shows you on a global scale what that is. So if we look at how much of the climate change we're experiencing today comes from these short-lived climate pollutants. It's basically a third from short-lived forces, a third plus, up to a half, and two thirds of that is from methane. So the ability to control methane emissions really will have an impact on the rate of climate change over the next few decades in a very strong way. And then that just graphic shows on the bottom left is sort of the proportion as best estimated now from where they're coming on an international context. Methane is incredibly important, a greenhouse gas, and it complements efforts to reduce CO2. So reducing both has more effect by doing them together. And when you look at this actual effect, this is from a paper done by Schumacher at all in science just about a year ago, looking at temperature change on a global basis over time that they used a set of, this isn't just business as usual, but a sort of moderate approach to climate change, we'll call a reference. And then if you just focused on reducing methane or the short-lived forces, it would still go up, but you get this difference. If you mitigate just CO2, what you see is in over the next few decades, it's actually warmer than if you just did methane. But over the long term, it's of course cooler. Now these are specific scenarios that they embedded in there that they thought were realistic. But the real most powerful message is that when you put the two together, you get the best outcome for the climate. These are and, not an or, we need to do both. And when we think about methane emissions in the United States, you'll notice here I'm doing it in terms of the 20-year global warming potential. Because again, the methane we emit today won't be physically in the atmosphere in 100 years. It shouldn't be thought of as a 100-year problem, it's a 20-year problem or a 30-year problem. The common usage is 20 years. And when we look at that short-lived piece of the issue, methane accounts for 28%. Using the current EPA estimate, but as Dave mentioned is the best meta-analysis to date suggests that maybe that's off by about 50%. So that number goes up to more than a third, closer to 40% of the short-term forcing warming that we're experiencing from U.S. emissions is a result of methane. So there's a real big lever out there in reducing methane emissions that will have a direct impact on the climate in the short-term. Not a substitute for CO2 or the issue of CO2, but it is a potent tool that we can use. And again, because, remember, going back, the methane in 20 years, only 20% of it is left. So when we talk about a 20-year number, it's not in 20 years, it's over 20 years. We talk about 100 years, it's not in 100 years, it's over 100 years. And that tends to distort a little, and it's a point that many people don't always pick up on. In 100 years, that methane is having a very small effect. And it's mainly captured by the first 20 to 40 years of impact, not over the last 60. So when you look at 100 year, methane looks much less imposing, but in fact, this is not a good representation to how to think about the impacts of methane emissions on the climate that we're experiencing today. EDF's been involved in, as Dave mentioned, in a whole series of studies to try and understand the methane emissions from the supply chain across the United States with a whole series of academic researchers who are the PIs, like Dave, on these studies. So there you've got the UT phase one and the UT phase two. The UT phase two is released officially tomorrow. Is that right, Dave? So these are studies now that the ones with the green stars have been released and the ones with the Xs are not yet submitted and the ones with the yellow triangles are currently in peer-reviewed scientific journals. So the idea was to really get a whole series of studies that allow us to really get a clearer picture of what we know about methane emissions, both bottom-up and top-down, using a diversity of methods, using researchers across the spectrum of institutions with the best capacity to do individual pieces and then bring them all together into a synthesis that we're now beginning to do right now, which we should have completed by the end of the first quarter and hopefully be published soon after. I can't give you a date because, of course, once we submit it to a peer-reviewed journal, the process of publication is not one that I control. So I can push all the folks to submit at a certain time, but I can't guarantee when it'll come out. And then, but by the middle of next year, all of these results will be out and I think we will have, through the good work of a lot of partners, there are close to 100 different partners. Those are both corporate partners, academic research partners. We've been able to do this work on a scale that has not previously been done. It'll give us a much clearer picture of which some of the results are already emerging and Dave talked about. And this was a summary from the Brant et al paper just looking across the supply chain at the methane emissions and looking at the different studies that are represented there and it provides a way to sort of think about this. It's a multi-phase process. You can't focus on any one place. It isn't just about the production. It isn't just about the distribution. It's an issue across the supply chain. And the idea was that through the EDF, coordinated studies as well as other work that's been going on, some of which represented here, that we get a much clearer understanding of what those emissions look like and where are the opportunities to mitigate? And that becomes really the key as with that increased knowledge, we understand where that leakage is occurring. And there is one of the things I do wanna mention and just stress that Dave said, the fact that you look at national numbers doesn't mean they're representative of every place. We know for a fact that there are places that have higher emissions as those San Juan representation data that showed from remote sensing and their places that have lower. And sometimes we unfortunately get comparisons where somebody puts one thing from one place and compares it to another place and says, look, they don't agree. Well, no, they shouldn't necessarily agree. There are different operations, different parts of the supply chain and there's no reason we would expect them to be the same. Now, what's useful is to understand the range that tells us how it might vary. One of the things we've done with a group of the scientists we've been working with, 10 teams went to the Barnett that Dave described a year ago, just a little over a year ago and all worked over a two-week period, excuse me, to collect data. For the reasons that Dave said, one of the problems we've had in thinking about this issue is their data collected at different points in time. And of course, then we can't reconcile them and we say it must be the methods. In fact, these, it's a dynamic field as Frank set up. Things are changing rapidly. We wouldn't expect them to be static over time. So we shouldn't then blame methodological differences because they don't agree because in fact, you may be measuring a different environment. So we went to one place. We had multiple aircraft in the air. We had multiple teams driving around, making measurements on the ground, diversity of different kinds of infrastructure. This is not the whole supply chain but are pieces of the whole supply chain there for an entire region. And while I can't talk about the specific results, what I can say is as implied by Dave, when you do this careful inventory with careful top down, what it starts to happen is you see the numbers starting to come together. In fact, I don't think there is a major problem fundamentally in the methodologies but we have to be careful to ensure that we collect data carefully and we understand and we're not comparing an apple and an orange that we know is an apple and orange. And that's one of the things I think that we've been maybe not as vigilant about. I think we are seeing with this increased data the fact that the patterns are becoming clearer and we're beginning to better understand where emissions are coming from, how they vary in space and time. And as these data unfold, I think that will be complete to everyone. Dave also mentioned the fat tail. These are just three sets of data that I'll just briefly on the y-axis is the total emissions, so whatever was measured, from three studies and then the number, the percent of sites. So it's just a relative measure. And what he mentioned was that if you look at the different curves here that 10 to 20% of the sites might be responsible for 60% of the opportunities to reduce. What we're also now learning is if you go further down the curve, doesn't mean those sites are actually functioning well. There are sites there that are long there that are losing 40% of production passing through that site. So we've gotta think about it, fat tails are important, but fat tails are not absolute, they're also relative. If you've got an operation, whether it be a production or elsewhere, that's losing close to half of the gas passing through it, that's a problem. And what we're beginning to see is those data that allows us to do this far better than we ever could before. This is just a project we've been doing jointly with Google that we released in July that allows us to map urban infrastructure where we see a similar pattern. Here's Boston, Staten Island, the other two are unlabeled cities simply because we haven't released the data yet. We're again, 10% of the emissions of the sites, the leaks in Staten Island account for roughly 30% of the emissions and 14% in Boston account for roughly 40 something percent of the emissions. Again, you're getting the multiplier effect that it's not a uniform. Every leak wasn't created equal, every source isn't created equal, and it's an opportunity to develop mitigation strategies. Ending with, this is a study done by ICF International that looks in a sort of Mackenzie's type curve. On the left, the y-axis is the cost per MCF of methane reduced. If it's below the line in the green, it's a net return of income to the owner of that asset as opposed to a net cost. And that basically for a penny, an MCF, you can reduce about 40% based on the ICF study in total emissions. So there are cost effective things that one can do to reduce emissions that's being borne out. And I'll stop with that. Thanks very much. Thank you, Dr. Allen. Thank you, Dr. Hamburg. So you both mentioned that there is this fat tail sometimes referred to as a super emitter problem. And there's also a discrepancy out there in some cases in terms of what is being measured for how much methane is leaking from the oil and gas sector. So from a scientific perspective, what do you think that means from a regulatory approach and from a practitioners approach that the panel that will follow this, they might have taken to account? I'll first just talk about the challenges imposed by the fact that you have these small subpopulations that account for a majority of the emissions. What that makes doing relatively difficult is just going out and sampling a small subpopulation and then determining what national implications could be. You could be getting a disproportionate number of high emitters or not. It's not that it can't be done. We've in the air quality community developed techniques to do that, but it does need to be done very carefully, recognizing that feature. I'll turn to Steve for potential policy implications of these high emitting subpopulations. Right, so one of the things to remember on thinking about the fat tail, which is an economics term, so those of you who studied economics back in school probably ran into that term, is that they're not static in time. So the population of emitters are not, those are not the 20% or 10% or to win any whatever it is, and those are them. They're gonna move around depending on physical characteristics, stochasticity, so unpredictable events. So we do have to think about the population of the whole, how do we monitor or understand it so that we can get to those when they happen? So we know when it's happening. When are they performing out of range? And the other side of it is, and that I didn't stress in the curves I showed, a third of the sites consistently across different activities and equipment types perform perfectly. The missions are below detection level, so it's not as if they're all these bad actors, these things going wrong, there's lots of things going right, but the trouble is we need to monitor, we need to have, ensure that we understand when does the one that is behaving well, it's not emitting, it's doing what it's supposed to do, as it was designed, turn into the one that's not performing well, and that becomes the key. For that, we need to make sure we have the regulations or the observations to ensure that we know it and we can repair it quickly. So thank you for those answers. I think that addresses the issue of the fat tail, but what about the discrepancy between emission studies that are out there, and what are the impacts of that, and what does that mean in going forward? So I'll start with that just as my mic's on, but as I mentioned is when you do the care, and Dave said similar things, when you do the careful inventories, and it means we take it up a notch because we have better data now, and we really look at the inventory, we understand the importance of these distribution that the average is not necessarily a good description of the total emissions time, how many things? So we've tended to, how many of everything are out there because the traditional way of building an inventory is an emissions factor, how much comes per activity or a piece of equipment times the number of those pieces of equipment. You multiply the two and you get the number, well, you better have good counts of both and need to know the distribution of both. Are they all the pieces of equipment equal or are there some that are different? Pneumatics, which Dave can speak to, don't come in, they come in varieties, they're different flavors of pneumatics, and if you just assume they're all the same, you're gonna get a number that's not necessarily very accurate. So the key is we can, I think, do a pretty close job, if not an excellent job, of balancing the difference if we have good data sets which we are accumulating now. And I would just add to that, that the regulatory situation is changing such that you get sources, and I'll just use the specific example of a completion flowback where now, control technologies are being broadly implemented, so you need to be aware of that as well and keep on top of the bottom-up scale-ups. Okay, great. I think we have time for one or two questions from the audience. Yeah, how you doing? Sure. Sorry, Andrew Dowdy. One of the key tenants of geochemical exploration globally is the thought that methane migrates up from oil fields in the surface, and you look at surface detection, and we know that pretty well from exploration. To what extent does that natural geologic flow affect this discrepancy? It's an element there. I think that on average it was probably not a big component, so thermogenic methane, so it's coming from geologic sources as opposed to biological sources, that would be included. There have been estimates of how much of that leakage is occurring. There are, again, some localities where it's gonna be a big deal, and you're gonna have it, and we're working right now on our urban environment, our urban mapping, testing one of those, trying, going to a place where we know there's a lot. Can we actually map the leaks using the methods we have because just so much of the leakage come from natural seeps that we're just getting spurious results. But on average, it doesn't appear to be a key factor, but it's clearly one of the things you have to include in the inventory, and if you ignore it, you are gonna be off, and inventory is just one general comment. Inventories are inherently conservative because you're adding things up, so if you miss something, you're underestimating, and top-down tends to be the reverse. They're gonna be airing on the other side because unless you do the attribution through isotopic or ratios of methane, you have to subtract out biogenic carbon and methane, and so you're gonna, if you don't subtract enough, you're gonna be overestimate. So as we get better inventories, those things approach, one we're adding, one we're taking away, making sure and they come closer together. Thanks, Andrew. Yeah, in the middle there. If you could wait for the mic to arrive, I'd appreciate it. John Shaget, Strategic Petroleum Consulting. Are there correlations over geopolitical boundaries so that you see more fat tales, say in Oklahoma than you do in Texas as a percentage of the total? I would certainly say that there are regional differences and the regional differences are driven by a number of factors. Some of them are regulatory regimes that are different. You'll hear from the state of Colorado in a little bit, which is being very proactive in putting in place regulations. So there are differences in regulations, but there are also differences in geology. So if you look and ask the question, why was there that red spot over the San Juan associated with a phenomenon called liquid unloadings? It's because of the geology. It's the pressure of the formations. It's the amount of water that's produced. It's the nature of the wells there and their age and other factors. So it's a variety of factors depending on the source. Steve, do you wanna add anything? Yeah, I would just add that and that's the advantage of national and why we need national regulations is just to ensure that unevenness can be addressed and ensure that we get the data and address those effectively. We are seeing some differences. I'd be very hesitant at the moment. I mean, there are some specific cases to put it specifically to the level of specificity that you provided because of the geologic differences and the underlying differences in age of infrastructure. I don't think we can say with great clarity at the moment which states or have higher, more fat tails than other states. Yes, a question in the back there. Jan, mayors of the resources of the future. We've got several hundred thousand producing wells in our country, some of which have probably produced for 50 years. To what extent have you all done any analysis of emissions that give us a sense of what's happened over the period of life of a well? I'm not sure that I'm in a good position to say that we have done that. It's very hard to retrospectively put emissions given the fact that equipment changes. I'm sure someone, if there was a company that had very good records, you could work your way backward with a series of wells. I'm not aware that anyone has done that. Those direct measurements are not plentiful enough that you could do that. And I guess from an environmental standpoint, I care much less about the retrospective as opposed to the prospective. How much we emit? The good news about methane is what you emitted 40 years ago is gone. That's no longer an issue. It's CO2 in the atmosphere now. So what we really care about is what are we gonna emit going forward rather than trying to recreate the pattern in the past? I mean, it's useful to know how things change over the age of the wells. And that we have been looking at and we do have a paper that's hopefully will be submitted within the next two weeks that does look at across different well types producing at different levels and what the emissions associated with those different wells looks like. Thanks. I think I saw another hand in the back there or in the middle, yeah. Hi, Adam Fisher from RPE at the Department of Energy. Following up on the state of the current of science when it comes to the top-down versus bottom-up approaches, do you find that there is, in your opinion, enough confidence in current estimates and inventories to tell us whether existing regulatory programs are sufficient or whether new actions are needed on a federal level? Well, one of the things that's gonna be important and RPE is certainly taking a leadership role in this area is to design strategies for taking the current technologies we have or deploying new technologies and monitor our progress going forward. There's no standard solution that we have right now that's in place to do that, but I think we're poised at a point where we can deploy monitoring networks that will be able to track progress in particular regions as well as Steve has pointed out, identify potential high-emitting devices or wells as they develop, and so I think we're very well poised. We're not there yet, but it is very much emerging technologies. And I do wanna reassure folks that, you know, there was some maybe two years ago, a lot of brouhaha, are we way off in our estimates. I think all the data says that's not true. Now, you can decide what way off means and I'm gonna not define it myself, but we're pretty reasonable. We have good databases. They're gonna get better. We're seeing they're getting better. They're getting more data at a very regular clip, but we do have information that allows us to understand the implications, the sources, and I don't believe there's gonna be anything that's radically gonna change that. The pattern will stay the same, we'll tweak things, some will go up. And as regulations come into effect, the completions is a great story. Yes, so as you do the, as the wrecks come on and the green completions were required, the data that Dave and his team demonstrated is that it really works. So that's a change. You have to update the emission factors to reflect that, is that in fact, those emissions now aren't present where those technologies are being deployed effectively. So I have a question that I think there's a lot of folks with international interest here in the room and the fact that the Lima climate negotiations are currently ongoing and this is when I take a moment to thank my lucky stars, I'm here and not there. What do you guys think, what if any role is there for methane in the international climate negotiations and how do you think that any regulation here in the US on methane, whether it be at the state or federal level will impact the US's climate goals and what they've recently announced in the agreement with China? Sorry. So in my opinion, methane has to be part of the solution and as I described, the modeling clearly shows that a strategy that involves short-lived forces and long-lived is your most effective one to reducing greenhouse gas impacts and climate change. And I'll just on a personal note, I've over the course of, I'm a terrestrial ecosystem ecologist, a biogeochemist by training and I established plots in 1980 in the forests of New Hampshire and I've been following those plots since then. I would have never guessed that in 1980, I would have said I'm gonna see the effects of climate change on the structure of those forests. Well, I can take you there now and it's real and it's happening and I've been looking at this. In 1988, I published my first paper on the effects of climate change on forests in nature. Again, I thought this was a long-term thing. It's real and it's now. If we're gonna slow the rate of warming and the impacts on the systems we're seeing, whether they be storm surges or other things, we're gonna have to work with short-lived forces and CO2. So any negotiation that ignores the power of doing both and my opinion is missing an incredibly important opportunity. Great. Well, thanks. Unless there's any other questions from the audience, I think we can wrap up and okay, can you make it quick? Absolutely. Hi, I'm Sam Korab with Smith's Group. I was wondering what can the industry do to assist in improving the science, not only in measuring the actual effects of the current emissions levels, but also in sort of honing in on where exactly they're coming from and where these fat tails are. One of the challenges with these bottom-up approaches that we described is just the sample size, the population size. And the more that you can sample and better understand where the real opportunities for improvement are, the better you're gonna be able to strategically direct those activities. And so many companies are already beginning initiatives to go out and measure as many of their sites, measure as many of their devices as possible. And having that information available to help us broadly understand where these sources are, where the most cost-effective and emission reduction-effective approaches can be undertaken would really help things. Yeah, no, I would just second that. I think there's real opportunity, as we get more data, we realize where the opportunities to reduce those emissions come from and we get greater and greater clarity. That isn't to say that, as I mentioned before, we have clarity now, but boy, it's like you put on, I didn't used to wear glasses, and I do now you put on a new pair of glasses and everything gets just that much sharper. So the point is the more that we can get that sharpness and we really can see which opportunities really make sense and which ones don't, where it's happening and where it's not, and then we can get our general operating procedures across the supply chain. And there are places still on the, particularly I'd say at the end user side where we have almost no data. So we're in the process now of gearing up to try and collect that. How many people here know, because I don't, what the efficiency of the boiler in my basement is. I know what it's designed for, but I don't know what it operates at. And the point is that almost nobody in America does, we don't know how much methane and I'm a natural gas user at home is coming from that. Those are the kinds of data we don't have. Now that's on the end use side, that's not on the supply chain side, but those are the kinds of data we need. That's, we have that increasingly for the supply chain. But again, think of it as a new pair of glasses, ever sharper, ever clearer, gives you much greater ability to react. Well, thanks for that. And I think you guys have done a good job in giving the audience and those listening at their offices a new pair of glasses to better understand. Yeah, that was a good one, huh? To better understand the issue of methane. And I think it'll be a very informative background to the panel that we're about to hear, which is what is the regulatory approach that folks are taking both at the state and the federal level and how are companies taking that information and what are they doing as practitioners to reduce their methane. So with that, I'll turn it over to Frank in the next panel. Thank you guys. Investors in the field and we're gonna last since he represents the utility side, that would be kind of the closest to the end user. And I'm gonna start off with just a little bit of framing. So we've heard this morning about the science of methane emissions and how much more potent it is and how we're gonna have to deal with it. When you start looking from a policy perspective, our policy makers typically have to balance and weigh different concerns throughout the society. So there's an economic concerns, there's environmental concerns on the national and international level, there's foreign policy and national security. And so what we developed in Marshall and Yon to be familiar with this for the NPC study a couple of years back is just a way of thinking about this. So when people complain that the energy policy seems to be suboptimal or the environmental policy seems to be suboptimal that's because there's trade-offs in the system. And if you think of this also as a dial at any point when you decide that environmental concerns are preeminent and it increases the focus you move to that when the economy changes that seems to be the driver for a lot of our local politics. And so when we think about methane emissions and especially in the shale gas world at the beginning folks thought that and I would have looked at the demographics of this audience if you go back to the time before when you went to bed you didn't do Hulu or YouTube or do your Facebook page who actually read a story to your children at night. There was concern in the industry that when we got down to regulation people would start looking at things and destroy the industry. So the goose that laid the golden egg that too much regulation would stop production. And in fact we've seen production rise over the last six years even as we've had federal regulation state regulation and local and community activism. From the industry side there was the concern that unless you did things like license to operate and deal with local communities that you would forgo your opportunity to develop. And a lot of what's come out of the National Petroleum Council studies is this notion of prudent development of resources. How you do it safer, smarter, better and in a more environmentally conscious way. So if you get rid of those two what you're left with is what we call the Goldilocks scenario. So that you have regulation that's not too harsh, not too lenient, but just right. And one of the problems that we have in this is we have a variety of Goldilocks going forward, right? So some like the porridge a little bit hotter or the bed a little bit bigger. And what we're gonna hear today is regulatory approaches to try to effectively approach this issue and how we address methane regulations both short-term and long-term without killing industry development because there are some real benefits to gas development and we have a variety of rules whether it's ozone rules that are coming out or flaring regulations and how you figure out even with the 111D rule were you looking for gas to displace coal in the power generation sector. So that's the setup that we want to employ for this section. We have a terrific panel to help us do that. I'm just gonna go for so dancing it's just the down here. A terrific panel to discuss this and we're gonna be starting with Janet McCabe. There's an extensive bio that's in your packet but Janet is currently the Acting Assistant Administrator in the Office of Air and Radiation. She previously served as OAR's Principal Deputy. She's a long and distinguished career in health and environmental regulation. She served as Assistant General Counsel, Attorney General and Assistant Secretary for Environmental Impact Review for the Commonwealth of Massachusetts and as Assistant Commissioner for the State of Indiana's Office of Air Quality. And more recently as the Director of Improving Kids Environment. It's a children's environmental health advocacy organization. She's also an adjunct faculty member at Indiana University School of Medicine at the Department of Public Health and she joined EPA in 2009. And so Janet it's great for you to be with us today and we look forward to your comments. Great, thank you so much Frank and thanks to the organization for putting this group together. You are a very alert looking group of people. And nicely dressed and I hope you've had enough coffee and everything and you know where it is if you haven't. Forms like this are great and I'm just thrilled to be on a panel with a co-regulator and representatives of other very interested parties because this as Frank has set up the framing here. There are many issues, many interests, many perspectives, many goals as we look at this or any part of the activity that we undertake in this country and around the world to produce energy and use energy and we need to have all of those perspectives involved in the conversations and in addition to the various substantive aspects that Frank mentioned in his very nice little triangle there there's another element that I would add to the mix in terms of the job that we do which is the public debate and the transparency that government agencies bring to the development of policy decisions. And so sessions like this and the work that you heard about in the first session, the research that's been going on to inform everybody better, that's all a very necessary part of the process as we move forward. And I think that the history of the Clean Air Act reveals that that has been a pretty successful approach that the air has gotten cleaner, the air has continued to get cleaner all across the country and the economy has continued to grow and that's been a very successful parallel process or integrated process actually. And we have every reason to think that it will continue to be so. And I think from my perspective here at EPA but also from my former perspective as a state regulator I think a lot of that has to do with the way that the various parties work with one another and the way the laws and the processes require that we do so and the spirit that we bring to those discussions because I really haven't met really anybody who doesn't want the air to be clean and I also haven't met anybody who doesn't want the economy to be strong. So we're all about finding the right place as Frank said. So I was just gonna give you a kind of an update of where we are currently particularly with respect to some of the methane activities. It clearly is a key priority area for us and I pressed the wrong button. There we go. This is very nice by the way to be able to see the slides. Usually. You're gonna make it tougher so you wanna turn around. Yeah, yeah, I know, I know. So I'll just remind everybody about the standards that we adopted in 2012. You may be pretty familiar with them. I'll talk a little bit about the climate action plan and then the things that have been going on here recently. And so in 2012 we did finalize rules under the Clean Air Act addressing certain aspects of oil and gas at the production end of the line. They were done under the rubric of addressing VOCs but of course you get a lot of methane reduction as a result of the kinds of technologies that people were starting to implement and that this rule requires now folks to implement. And so that was a very beneficial thing. We think that it will achieve significant reductions of methane they go into effect here in about a month officially. And that rule making I think was a very good example of what I mentioned before which is a very constructive process working with industry, environmental interests and importantly our state co-regulators. And in some cases here the states and you'll hear this from Martha, the states are out ahead of the federal government because of the activities in their states. And so we were very pleased at the way we were able to bring the various perspectives together to make a huge difference through this VOC rule. And we think we've learned a lot from that process about the kinds of things that make sense just sort of good rule making principles like make the right thing to do the easier thing to do. Things like that that I think we all should be thinking about as we develop regulations. After that rule was finalized of course the president issued his climate action plan of June of 2013 and methane was prominently recognized in the climate action plan as something that was essential for us to work on as a country because of the as you heard this morning the climate forcing actions of methane which are considerable. And so it contained direction to several agencies across the federal government to develop a methane strategy to look at several different areas in the economy where methane is concerning with emissions and you see them identified here. EPA has a lesser or greater role with respect to all of these but that strategy came out in March 2014 and it laid out some activities that the agencies were gonna undertake with the promise of more specificity to come. And so EPA one of the things that we moved into and since the focus here is on oil and gas I'll talk about that the most was those next steps with respect to oil and gas. So we released last spring these five white papers which many of you may have seen and or commented on if you did thank you very much. We wanted to get them into peer review and get some public input on them. We identified five areas in the oil and gas production sector that we thought were particularly ripe for consideration based on things that we had learned from our 2012 rule but also from all the input that we were getting from the industry and our own work through the greenhouse gas reporting rule data that we were collecting and also through our natural gas star program which I'll talk about in a minute. And so we thought that this was a important thing to do next recognizing that it's often if not always the case in regulation of this sort that you always wish you had better information. There's always somebody doing a new study. There will always be somebody doing a new study but we just haven't and can't let that stop us from making progress forward. Not that we should be relying on science that we don't feel comfortable is credible but we do need to recognize that it will always evolve and get better. So we put these five papers out and we did get a lot of input from our peer reviewers and from others and learned some interesting things. We've posted all of this information so it's available to all of you to see the kinds of things that we heard about. And let me just back up for a minute here. We're thinking through all of these things in light of the regulatory and non-regulatory tools that EPA has used in the past, that states have used, that people have suggested to us as we try to formulate what makes the most sense for a path forward. Whoops. Doing so, we recognize as I said before that there are a number of states who are either a little or a lot ahead of us and we've worked closely with Colorado on these issues for years and Wyoming as well as states where they just needed to address this. And so we're very pleased that there is that work going on at the state level. That means a couple of things to us. One is that under the Clean Air Act, states are the primary implementers of Clean Air Act programs. And we wanna make sure that any state that intends to and wants to be in the lead on regulating this industry in their state is in a position to do so. And that we provide the technical assistance to the extent that they need it, information to the extent that they need it, federal guidance or federal basic regulations to the extent that that's helpful. We also wanna make sure that we're not pursuing programs on the federal level that will be inconsistent with confusing at cross purposes with or at worst undermine state regulations because that's not good for business. It's not good for the success of the ultimate program. And every state is different and we recognize that. So sometimes that takes some working through to figure out how we can achieve the goals that the states have, that they've illustrated through their regulations or wish to and the responsibilities that we have under the Clean Air Act to regulate. But we have a very committed will to work those things out. And I think in this area, it's been pretty successful. And I'm hoping Martha doesn't tell you otherwise in a few minutes. But there's states that are pretty far along and then there's some states that are sort of in the earlier stages. I mentioned Natural Gas Star. This has been our voluntary program to assist and hold up and recognize companies that are at the front of the pack in terms of their attention to methane and other environmental issues. And as part of our efforts under the methane climate strategy, we have been working with the industry to take that to a new level, calling it Natural Gas Star Gold. And we have, and that's a good thing to do with all voluntary programs. This is how we've made so much progress on technology and Clean Air in the country is by ever with that American spirit of we can always do it better of making sure that we are raising up those companies that really truly are on the edge, the leading edge, a good edge of their practices. And so we put together some thoughts about this. We've been discussing it with people. We're having a lot of discussion with folks getting a lot of feedback that perhaps we maybe went a little bit too far this time in the expectations of what that next increment of outstanding performance would be. So we will continue to talk those through. It will not help us if we put out a voluntary program that no company feels they can participate in reasonably. So we'll keep working with that. But again, we wanna make sure that to the extent that we are trying to encourage various sorts of activities or creativity in certain areas that we have some principles that we all can follow in terms of what those programs are intended to achieve. The fact that they again should not undermine or undercut or be inconsistent or make more difficult. The job of establishing basic minimum expectations for everybody across the country. So we will continue to work with folks on that. The kinds of things that we're looking at are typical in terms of the rewards that you get if you participate in a program like this. We will say how great you are at many opportunities and we'll mean it. But it's also, of course, it's good for the companies. And that's a lot of the challenge here and such an opportunity in this particular industry sector which we don't always have when we are looking at reducing pollution from industry sectors. That the gas that doesn't escape is gas that the companies can sell. It's a valuable product, it's a non-renewable resource and I think we would all be committed to making sure that we waste as little of that as possible and put it to the best use. So there are those advantages as well and the companies that put themselves forward in these sorts of programs can be really fantastic ambassadors to other companies who may need a little bit more help to get them to that space. And you can see there the other sorts of advantages to this. So we look forward to folks continued working with us on this and look forward to finalizing this pretty soon. You heard a lot about data I think in the first panel, I wasn't here, but I heard the tail end of it and that seemed to be a theme. One of the wonderful things that EPA is now in a position to produce every year is the greenhouse gas inventory. So kudos to the people who were around when the idea popped up to have EPA do this program. You just can't do programs like this without collecting data even if it might take longer than everybody would like to get to the point where the system is up and running and it is up and running and it gives us information. Is it all the information you need? No, is it perfect? No, is it getting better? Yes, is it pretty robust? Yes, and getting more robust. So we are continuing to look at the data that come in through that program and also gaps that there might be in the program. And so we have a proposal out now, we're in the coming period now, that would extend the reporting obligations to certain other parts of the value change and we think that that will really help. This greenhouse gas reporting inventory is a companion to the national inventory that the agency also works to complete. So we think that this is really important for all of us for a bunch of reasons, one of which is to have the best information going forward, another is to see whether we're actually making progress to the extent that we can use these data to help us understand that. And we did see, as is reflected here, a decrease, a decline in reported emissions from the sector between 2011 and 2013. And I would like to think that a significant part of that has to do with our Quad O rule and the increased use of green completions, which we all know really do reduce emissions. So that it's good to have this reporting program to validate that. And just for people who like to see, that's Papa Bear, Mama Bear, and Baby Bear, I think, are those bars. Oh, I'm done. I'm actually not quite done. Cause I will say that the administration committed to get some further specificity out, as I said, about next steps that not just EPA but other agencies in the federal family would be taking in this space this fall. And we're close to the end of the fall, as defined by the sun. So we actually do expect to be able to deliver some more specificity here relatively soon. And as I said, what EPA is doing is looking hard at the various, the tools that we have at our disposal and how to think about those in terms of the best and most effective way to achieve reductions in the sector in an expeditious manner in a way that is consistent with the growth of the industry and the many other things that need to be considered. Also to make sure that we're in good communication with our fellow agencies to the extent that they interact with this industry, which several of them do. And we want to be speaking as one federal family on these issues and avoiding the kinds of things I've said we are trying to avoid as we work with the states. So I'm looking forward to being able to deliver some more specificity on this and have some further conversations and then begin implementing some next steps together with you to get us where we all want to be. So thank you and I will turn it back to you. Thanks, Janet. And there's no truth to the rumor that you're moving further west to pick up some extra hours before the Equinox is at. No, yeah, you know, there's always that possibility. It only gets you so much though. Our next speaker is Martha Rudolph. And as Janet described her as one of her co-regulators in the system, I think that's actually a very apt description as Colorado has taken the lead. Martha serves as director of environmental programs for Colorado's Department of Public Health and the Environment. And she oversees the department's air pollution control, hazardous materials and waste management, water quality control, and environmental health and sustainability divisions. Is he girl? She previously served 14 years in the Colorado AG's office working on air pollution, hazardous waste and water quality issues. And she remains active as an officer of ECOS, which is the Environmental Council of States. And Martha, we're especially happy to have you here to join us. Thank you. I appreciate the opportunity to be here today. What I really wanna focus on today are the regulations that Colorado adopted this last February. I think they're really the first in the nation, largely the first in the nation, to control methane emissions from oil and gas sites principally the upstream production level. But what I wanted to talk about first is sort of setting the stage for how we got there because this didn't just happen out of the blue. We had a sort of a buildup of a number of regulations across the state dealing with greenhouse gases generally and then oil and gas facilities specifically. So first of all, we've got two different agencies or two different departments that regulate oil and gas activities. My department, Colorado Department of Public Health and Environment does the traditional environmental regulatory work, as you heard, sort of the air quality, water quality, et cetera, sort of the traditional looking at the federal requirements under the Clean Air Act, for example, and translating those into the state law to regulate the facilities. The CISTA agency is over the Department of Natural Resources, the Colorado Oil and Gas Conservation Commission. Typically as in many states or in most states, this would be the agency that actually regulates the oil and gas production, the construction of wells and the operations of those wells. So I'll start with 2008, I don't wanna go back too far, but I'll start with 2008. In 2008, the Colorado Oil and Gas Conservation Commission adopted some pretty sweeping regulations for the industry, the oil and gas industry. These regulations protected public drinking water supplies, groundwater from leaking impoundments, established setbacks from occupied buildings and some odor controls. Bear with me, this all has something to do with what we did in February. The regulations helped support the Clean Air Clean Jobs Act, which was passed in 2010. This was a statute that established controls for utilities, for largely the public service company, Excel, Colorado required it to adopt a plan that was adopted by the Public Utilities Commission to reduce NOx emissions. Bear with me, I am getting there. So the NOx emissions, once they were reduced, as Janet was saying, you reduce emissions in one area, you're gonna reduce them in another area. And there, Excel was shutting down five coal fire units. These are gonna be repowered by natural gas. So now we've got a natural gas production increasing in the state to displace coal. The coal being displaced then results in about a 29% reduction of CO2E, another benefit, a greenhouse gas benefit. So establishing the regulations in 2008 to regulate not only the sort of the traditional production well-bore integrity, that kind of thing, but also starting to look more specifically at environmental issues surrounding production of natural gas, allowed the public to approve of the increase in natural gas production, which would then displace coal, which would reduce some greenhouse gases. So we're getting there. Now, let's talk about what happened this last February. We adopted methane control regulations from the oil and gas industry, again, upstream. What I wanna do is talk a little bit about what the rules do. They're very complicated. For me, they're very complicated. For someone that's really in the industry, perhaps they're not so complicated. So I wanna give a broad overview of what are the methane controls that we adopted. And then I wanna go into a little bit of how we actually accomplished that. I sort of set the stage a little bit with some of the preliminary regulatory activity that the state did. Now I wanna talk about how we got to methane, which again, this is controlling methane from oil and gas operations is a pretty new area to deal with methane specifically, not just hydrocarbons or VOCs. So again, the Carr, Colorado Air Quality Control Commission in February of just this last year adopted regulations for both oil and gas industry. What do they do generally? Up to 98% control of hydrocarbon emissions from storage tanks is now required. These tanks with uncontrolled actual emissions that are equal to or greater than six tons, six tons per year. In the past, we had regulations for actual emissions of 20 tons per year or greater, but now we've lowered that threshold down to six tons per year. When you get down to the six tons per year, a level that's really when you start getting into the methane as opposed to other VOCs. I will, let me back up a bit. We call this initially a hydrocarbon, regulating hydrocarbon emissions. Largely that was because we heard a lot of entities raise the issue whether we had the authority to regulate methane. We think we have the authority to regulate methane. It's pretty clear in our state statute, but really what we are going after largely are hydrocarbon emissions. So these controlled tanks, now again, we're talking about storage tanks, are to operate without venting during normal operations. Operators of these storage tanks are to develop what we've called the Storage Tank Emission Management Plan, or STEM. This is a plan that they're to prepare that will indicate how they're going to meet this no venting standard. And then how they're going to comply with requirements for storage tank inspections. This gets to the issue you were hearing before, where how do you know what emissions you have? How do you know what you need to control? And so this is where we have a pretty robust, this regulation has created a pretty robust monitoring and reporting requirement for emissions from in this case, tanks, but from other I'll get to where else we're requiring some monitoring. The regulations also establish L-DAR, leak detection and repair requirements for components of natural gas compressor stations and well-production facilities. The frequency of the inspections are based on the uncontrolled actual VOC emissions. Leaks must be repaired based upon a schedule, depending on the kind of facility you're looking at and the kind of leaks that are coming out. The revisions require gas from newly constructed, hydraulically fractured in or recompleted wells to be routed to a gas gathering line, or to be controlled by at least 95%. Best management practices to minimize hydrocarbon emissions during liquids unloading and well maintenance must be employed. And the revisions expand the low bleed pneumatic controller requirements statewide. In Colorado on the front range, which is basically Denver, North to the Wyoming border, and not quite as far East as to the borders with Wyoming and Nebraska, actually not that far at all. There's like nine counties, has been in non-compliance with ozone for a number of years. In that area, we had requirements for low bleed pneumatic controllers at oil and gas facilities. Now it's been expanded statewide. So what are our predictions? Our predictions are that once these regulations are fully employed, which will be really, there's some of the regulations have already come into, they've been required to be complied with now. Some of them compliance schedules are in over the next six months. Once they're fully employed, we expect that there'll be a reduction in VOCs of 93,500 tons per year. And for methane ethanes, we expect emissions to go down by about 65,000 tons per year. We're predicting this, we haven't really monitored methane as methane. We've monitored hydrocarbons, VOCs, of which methane of course is a component of that. But strictly speaking, majoring methane, we're only beginning to do that now. And so that's the 65 is what we're predicting. So let's talk a little bit about how we did this. I think this is a pretty important consideration on how to make this happen. In the fall of 2012, Governor Hickenlooper, the governor of Colorado, announced at a event, it's called the Energy Expo, which is produced by the Colorado Oil and Gas Association. It's one of the major trade associations in the state. Announced at that event that he wanted to see a reduction in methane emissions from oil and gas operations as much as possible. Excuse me a minute. So that gave us direction. We were already doing a regulation to continue to adopt EPA's quad O requirements that Janet was talking about. And by the way, we worked very closely with Janet. She's absolutely right. We get along very well and work closely not to step on each other's toes and to help move our respective plans forward. But he made an announcement at this event that he wanted to see reduction in methane emissions from oil and gas operations to the maximum extent possible. We immediately began working on that. As I said, we were starting to work on adopting quad O requirements. We'd already adopted some of them. Now we were gonna adopt more with this announcement and our decision to move forward and expand the stakeholder process to look at ways of addressing methane emissions. The number of stakeholders increased exponentially. You can imagine from something that would otherwise be required to something that was now going beyond what the federal requirements would be. We had over a hundred stakeholders attend our meetings and about nine months into the process, we were, you can imagine having a hundred stakeholders at every meeting. It was difficult to get into any kind of consensus. So we started to break off into smaller groups where we would just meet with industry. We would just meet with perhaps the environmental groups and the municipalities. There were some that were used to seeing regulations of oil and gas. There were some that were not. So it was a diverse group. We encouraged groups to meet without us to come together to see if they could work out regulations and that is indeed what happened. Again, about nine months, 10 months into the process. A smaller group comprised of three oil and gas entities and an environmental group having to be EDF got together, looked at what our straw proposal was. We're able to negotiate a plan that would work for the industry and that would be supported by the environmental group, presented it to us. We modified it to meet our needs. It was submitted to the Air Quality Control Commission for consideration in the fall of 2013, about a year ago. And then in 2014, there was a five day rulemaking. It was immensely controversial. The commission, again, kind of tweaked it to what they wanted but ultimately adopted the regulation that you see today. We were very pleased, although it was a very controversial rulemaking, that it was not challenged. And in fact, the COGA Colorado Oil and Gas Association, the Trade Association that I mentioned before and another significant trade association in Colorado, the Colorado Petroleum Association immediately began working with us to establish training activities, to help train oil and gas operators on how to comply with the regulation and we're very pleased with that. So again, this may sound like it sort of fell into place. It, yeah, it was about a year and a half of stakeholder process and it was sort of touch and go but it all came together at the end even though the rulemaking was controversial. So how did this work? Why did this, what were the stars, how were the stars aligned to make this happen? So my view, I think that initially it requires strong leadership and this came from our governor who made the announcement again at a forum where you would not normally hear that kind of an announcement but he made the announcement that he wanted to reduce methane emissions. So you had that strong leadership up front. In Colorado, I think probably most of you know we've had massive development. Traditionally we've had a lot of natural gas development on the West slope, on the East slope, we've had some gas development, it's principally been oil but with the advent of improved technology in fracking and in horizontal drilling, it has now made development of oil much more economical and much more technically feasible in areas where it just hadn't occurred before and in those areas tend to be where there's communities and the communities were increasingly concerned about basically having this heavy industry in their backyards and particularly expressed concerned about the health impacts, the potential health impacts but certainly the welfare impacts I'll say, the noise, odor, traffic, those kind of things were of great concern to this communities and they were expressing their concern and had by passing moratoriums and outright bans on fracking within their communities which would of course stopped any kind of development. We had a number of legislative proposals, sympathetic legislators to both the industry and to the communities proposing legislation that would heavily regulate the industry or would prevent regulation of the industry and so that was in turmoil and then a year before we, there was legislation that was passed that gave the state six infrared cameras and these are cameras I think those of you in the industry know they allow that to visually see what the naked eye cannot see and that's emissions coming out of various orifices. I mean they could be the valves, they could be the top of the tank, they could be anywhere and they don't speciate and they don't quantify and so generally when you're looking at these, you can see these huge emissions coming out. You don't know how much frankly and you don't know what it is but it is quite alarming especially to citizens who see the videos coming out and so those are being, we're pretty damning for the industry. We have with those cameras, we got four of them, the oil and gas conservation commission sister agency got two of them, we have completed about 3,500 IR cameras inspections since we got them and in very rough numbers there have been leaks detected at 35% of these inspections so 35% of that is a community problem, perception problem. So we also had a air quality control commission where we had members that had expressed concern about the industry so that was an unknown how far were they going and willing to go. The technology was available to detect emissions and to control emissions and frankly there were relationships that had been developed over time between members of the industry, the oil and gas community, between communities, between the regulators, between the environmental groups that would allow the conversations to take place. Frank conversations, meaningful conversations that would allow for realistic and beneficial regulations to be promulgated and so I think all of those together led to the successful adoption of the regulations from last February so I'll leave it at that. Thank you. Thanks Martha. So we've heard from the regulatory side, we thought we'd talk on the panel too to deal with the practitioners, investors and people in the field that actually do the work and we're gonna start that next segment with Greg Guidry. Since the beginning of 2013, Greg has served as executive vice president of Shell and he deals with Shell's unconventional business in the upstream. From 2009 to 2012 he was responsible for Shell's upstream E&P activities in Europe as well as the midstream gas supply in operations in over 19 European countries. He's a 30-year veteran of Shell. He has had global responsibilities for upstream operation. He chairs the Dean's Advisory Board for LSU's College of Engineering and we're pleased to have Greg here to join with us today. Thanks Greg. Thank you, thank you Frank. Thank you very much. I'm just going to have a few comments with no PowerPoints so similar to Martha. First of all, let me just open by saying Shell does share the concern around addressing methane emissions. The long-term attractiveness of natural gas is a key part of the overall energy equation, both globally but also here in the US and it requires continuous improvement in emissions for it to continue to be attractive. Shell is already voluntarily reducing methane emissions as part of what we call our global onshore operating principles. The five core principles or standards with almost 60 proof points are providing evidence that we address our safe and responsible approach to development of shale oil and gas. This applies to our global operation regardless of regulatory framework or regardless of what regime we're in. They focus on air quality, water quality, well integrity process safety, our footprint and our principles of engaging communities. We're also a founder and an active participant in the Center for Sustainable Shale Development in Appalachia, the CSSD. That said, we recognize that voluntary efforts by a handful of companies are not going to be enough. We also recognize several studies are underway to better understand methane emissions from the natural gas sector. Many of them were talked about by Steve and others. Shell is a key participant in just about every one of those studies. We're very proactive in making our operations available for measurement and provide data. We're still very early, as was said this morning, very early in understanding overall and aligning all the various studies, but we would certainly consider absolutely continuing a data-driven approach and do whatever we can to continue to participate and help to shape that. We also would support a targeted approach now to reduce methane emissions from those larger upstream sources that are currently well understood. API has talked to the administration about a voluntary program to address some of the high emission sources on existing facilities. Shell certainly supports that approach. We also, in terms of Gastar, we were a charter member of Gastar some 20 years ago and certainly would aim to continue to work with Gastar Gold as it relates to a voluntary approach. If EPA is committed to a regulatory path instead of a voluntary approach, we have urged EPA to take a very narrow approach that focuses on those two or three well-understood upstream sources, such as replacing high-bleed nematics or a workable leak detection and repair program, the so-called LDAR program. And of course that needs to be reinforced by science to focus on fat tails and the contribution curve that we now are better understanding. Please avoid a broad approach that could impose unnecessary costs and burdens on an industry challenged now by sustained low-price environment and facing a host of other costly regulations such as lower ozone national ambient air quality standards or waters of the United States rule, both of which can be very substantial costs. We are pleased that EPA recognizes the climate benefits from increased natural gas use and has proposed a clean power plan that relies very heavily on increased use of natural gas. We want that abundant gas to be available to the power sector as well as the transport sector in order to enable the clean power plan. If the administration piles one regulation after another on America's shale industry, I'm concerned that affordable onshore production of oil and gas may be significantly challenged and in some plays no longer possible. We not only risk not having the gas needed for the clean power plan, we may unintentionally impact America's energy security and economy at a time when we are on the road to energy independence. Shell has urged the EPA to be sensitive to the unintended consequences that could come from these multiple regulations coming down the pike. We have urged the agency to take a targeted approach, a thoughtful approach to methane that achieves the emission reductions without crippling the industry and an industry that is so critical to total U.S. energy supply and that of global energy supply. I'd like to reinforce the and that Steve mentioned earlier. You talked about an and focusing on methane emissions and on CO2. I would also like to reinforce the and in terms of meeting the world's need for energy. 30% of the world's population has no energy. Over a billion people have no energy. The focus on supplying clean fossil fuels together with renewables is a must if we're going to satisfy the needs of those who need the energy because it would be very, very difficult to figure out who is not going to get it. Thanks, Greg. Pass the keyboard down. So continuing in the upstream, our next speaker is Carrie Reese. Carrie serves as the environmental compliance manager for Pioneer Natural Resources. Her team at Pioneer oversees the company's corporate compliance initiatives, including EPA's greenhouse gas reporting program. She was a member of the technical working group for the recent UT study assessing methane measurements that was referenced earlier this morning and prior to joining Pioneer, she served as program manager of air quality policy and program development for the North Central Texas Council of Government. And so she has a long history of working with local governments, federal and state regulators and community stakeholders to develop workable programs to reduce emissions and improve air quality. So Carrie, and you have a video as well. Okay. Thank you. I'd first like to start with just giving a quick introduction to Pioneer. I know that everybody knows who Shell is, but you might not have heard of our company or are familiar with the areas that we operate in. Pioneer is a large independent exploration and production company operating primarily in Colorado and in Texas. The majority of our production is out of Texas and we're most active in the Permian Basin and Eagle Ford Shell. Currently running 30 rigs in the Permian Basin and eight in Eagle Ford Shell. At about 186,000 barrels of oil equivalent a day, about half of our production comes from oil with the remainder of it being split between gas and natural gas liquids. So the question that I was asked to answer today is what is industry doing to reduce methane emissions? And so I'm gonna tell you a little bit of Pioneer's story. You know, we like to think that we're pretty aggressive, but I also think that we are fairly representative of those companies that are in our peer group. First off, respect for the individual community and environment is a core value at Pioneer. Environmental stewardship is part of our culture, which means careful and responsible management of our business. This is emphasized from the very top down. Our compensation is even tied to meeting environmental goals just as safety goals and production goals are tied to compensation. We've got internal teams that have been developed to focus solely on air emissions and climate, management committees that have been installed to drive policy. And then we also have technical expert teams comprised of representatives from across our assets and our business units that come together regularly to identify the issues that are common across our operating areas and work collaboratively on solutions to address those issues. Pioneer is also complying with federal and state regulations. And this may seem like a given, but as you've heard, even with previous speakers on the panel, there's been significant regulatory changes for our industry in recent years. In some cases, we were operating in compliance prior to regulation being installed. In other cases, we did need to re-engineer some of our facilities in order to meet those requirements. And since deadlines are still pending, some of this work is still in progress. But overall, a large amount of time and resources have also been devoted to responding to the administrative demands of these regulations. The additional documentation and record keeping and reporting is not a small task. And we've created additional information systems to provide that required information to the regulators. But an exercise that has taken a significant amount of additional effort and in itself is not returning any additional emissions benefits. Also inherent to our culture at Pioneer is the idea of operations excellence. And this is meaning that we should be working towards continuous improvement in all that we do, drawing upon our experiences and using that understanding to innovate where we can. And cultivating our best practices, implementing new innovative technology. And in the case of emissions, for us, this also means achieving reductions above and beyond the regulations that have been imposed. And then finally, Pioneers participating in research initiatives with industry and with government to improve our understanding of operational emissions. And we do this not only for our own knowledge, but also as you've heard, because the information that's currently in the public realm that's driving the rulemaking has often been derived from very small data sets and often from engineering estimates alone. And so studies in recent years you've heard have been adding to that body of knowledge, but we think there's still a lot of improvements that can be made. And so with that introduction, with that being said, I'm going to share a few examples from our work at Pioneer that will help to demonstrate some of these points that I just made. So first off, green completions. You've heard about this from the previous speakers. This is controlling the gas produced during the flowback phase of a well. Something that Pioneer did well in advance of regulation. Separated gas during this phase can either be vented, flared, or routed to a sales line. The recent federal regulation required no venting as of October 2012, and they are requiring no flaring as of January 2015 next month. In our South Texas operations, where we did control gas with the flare in the early development of the field, we quickly moved to what would be called a full green completion, putting the gas into a sales line in early 2012. That was three years in advance of the regulation. And then on top of that, in addition to the regulation, we control emissions from our condensate tanks during the completion process. And we've also extended these standard operating procedures to our oil wells, both in South Texas and in the Permian Basin. The Shell Revolution has provided Pioneer the opportunity to design newer and bigger facilities to capture the gas associated with condensate and oil production. Of course, we prefer to capture our product for use rather than burn it with a flare. And so we're in our third year of installing vapor recovery units on our batteries, at all new batteries. And at our largest facilities, we're even installing two batteries on the batteries to ensure that we can maintain control even in the face of scheduled or unexpected downtimes. And then where liquids are not piped off site, we're engineering our facilities in order to control emissions during the loadouts. So I've included these next two slides in particular because they address what we're doing to reduce emissions from two categories that are currently of national interest. You heard that each were a topic of an EPA white paper that they're preparing for an additional round of rulemaking. And so at Pioneer, we've extended our leak detection and repair program to our upstream facilities. We have an incentive to find leaks because that's lost product to us. We have our own dedicated thermographers on staff that because of their operational background are often able to repair the leak immediately upon detection. We have normal inspections on annual quarterly and monthly basis. And then, you know, our Rockies asset, you know, it's had an LDAR program as normal course of business for years, one of our most developed across the company and we've used that as a model for other areas of operation. So they were able to respond operationally to the new Colorado regulations fairly easily. But here is an example of where we have the challenge of the regulatory records requirements, records management requirements. You know, we're doing the job but now to maintain compliance, we also have to generate quite a bit of paperwork that in itself doesn't lead to additional improvements in air quality. Pneumatic controllers are also a secondary of particular interest right now and Pioneer is proactively looking at alternatives to using natural gas to operate them. All of our midstream facilities have been on instrument air but this last year we conducted a pilot program at one of our upstream facilities to learn what works and, you know, what the constraints are for installing compressed air to operate the controllers. It was a successful project, excuse me. You know, we were able to install and run the system with no negative effect to our production. But our South Texas sites are remote, they're not on the grid and so our main challenge or barrier was access to electricity at these facilities. And so we've learned at least in our case in this area that installing instrument air is most feasible at locations where we have a large number of controllers. Nonetheless, our management has been willing to invest further in this project and we will be expanding to an additional 14 sites over the next year. Okay, and this next initiative on picking operations is one that I think is truly an example of operations excellence and so I'm going to actually play a short video clip for you. You can hear from some of our engineers and operations personnel in the West Texas Panhandle so I think they can do a much better job at telling the story even than I can. In addition to nearly 700 gas wells, pioneer natural resources operates 800 miles of pipeline in the Texas Panhandle. Our process gas comes up through this pipe and down the pipeline. Every day, these spherical balls called pigs keep those lines clean. The gas gets behind the pig and pushes the pig down the pipeline to the next pig receiver barrel. As the pig moves, it catches condensate, sediment, and rust. But every time a pressurized gas line is opened, there's also a small loss of product. In 2006, pioneer devised a process to drop line pressure before it's opened. So instead of venting 125 pounds of gas to atmosphere, we vent it back into our getting system and when we open a valve, we only vent a pound. Pioneer also built larger launching and receiving barrels, which enables workers to insert 14 pigs at once. This means hatches only need to be opened a couple times a week instead of a couple times a day. That cut emissions by 90%. It was the right thing to do. So this is an example where there were operational efficiencies that had great environmental benefits. We collaborated with the engineers in our office and the field guys and how they operate, and we worked back and forth to come up with the solution. The company invested more than $4 million in the new process and already has taken what it learned here to its other operations. I'm fourth generation of oil and gas and seeing this kind of a commitment from a company I work for, I'd be proud for my daughters to make the choice to be the fifth generation. Our industry is very technology driven and Pioneer will always looking to see how these new technological improvements will help us do our job better. And so we're currently testing natural gas, dual fuel engines, drilling rig and frack pump engines within a Permian Basin in South Texas assets. You know, we wanna understand the operational benefits as well as the environmental benefits of these engines and what the trade-offs may be. Engine manufacturers have published expected reductions of certain types of emissions but currently the jury's still out on the impact to greenhouse gas emissions. You might expect carbon dioxide to be lowered due to the lower carbon content of this natural gas fuel but we also understand there's something called methane slip, you know, from incomplete combustion. And so that's something that we need to investigate a little bit more and identify how it does impact this type of technology. And so to better characterize the performance of these engines, we are teaming up with researchers next month to construct some field trials in order to try and answer some of these questions. Okay, and then finally, as I mentioned in my first slide, you know, Pioneer has been working with industry government and scientists to generate new data on emissions from the production of oil and gas. As photos in this slide are some from the project that we participated in with Dr. Allen, the UT Austin study where we actually took measurements directly at the source sometimes for the first time. And you know, it's important that we do this to improve the national estimates and to better engage with regulators and interested stakeholders, but we also learn from it too. And the additional insight is something that will help to continue Pioneer along our path to operations excellence. So parting thoughts, you know, our industry does provide a valuable and necessary product according to the latest national inventory, greenhouse gas emissions are in all time low in 17 years much of this is due to the burning of natural gas to generate electricity. We also know that natural gas is projected to become an increasing portion of the US transportation fuel mix. And then also worth mentioning our domestically produced resources are an important part of our national energy security strategy. But we also do realize that with this production also comes the potential for emissions. And it's something we take seriously as we're committed to protecting the safety of our environment and the communities in which we work. And so we'll continue to manage our emissions, you know, keep up our end of the deal. And we also know that additional regulation is on the forefront, it's coming. And, you know, it's a smart regulation that which is based upon good data not good enough data. And also that which is promulgated closer to the source that operating fields production fields aren't cookie cutter. They have unique characteristics and unique considerations. But all this is needed to ensure that, you know, we can strike a balance with regulatory control while also continuing to provide this essential resource. Thanks very much, Carrie. For those of you that visited us in our old building before, I would have shuttered to think how we would have handled an embedded video downstairs. And we probably would have done it with tan puppets and the idea of pushing pigs to visualizing it would be very difficult. So I appreciate the fact that that you brought along and we're able to accommodate it. Our final speaker on this panel and we're gonna move to the downstream now is the most honorable Dave McCurdy. Dave needs little or no introduction to Washington audience audiences. He's a respected seven term congressman from Oklahoma. On Capitol Hill, he was widely recognized as a defense security and energy leader. Since leaving the Hill, he's been president and CEO of the Alliance of Automobile Manufacturers, president and CEO of the Electronic Industries Alliance, co-founder of the Internet Security Alliance, which was aimed at promoting cybersecurity. And I would argue before that was fashionable. And he served as a member of the Secretary of Defense's Policy Advisory Report. For our purposes here today, we welcome Dave in his capacity as president and CEO of the American Gas Association, which represents more than 200 local energy utility companies and our enormous distributors of natural gas throughout the United States. So Dave, it's a pleasure to have you. Thank you very much, Frank. And I'm going to try to be relatively brief, but I did want to thank CSIS for hosting this panel and this conversation because this is a really important conversation. And as Frank said, I'd probably go back a little further than most here. Certainly those who still have original hair color out there in the audience, but I go back with David Apscher and John Hamery and Sam Nunn, and this is a great institution and organization and certainly a great new facility. You started off with that Goldilocks presentation. I couldn't resist in thinking about not just what we're talking about today on emissions, environmental impact is an important part of that, but we shouldn't forget the economic benefits of natural gas and also national security impact. And those of you who read The Economist or didn't see it, the last one of the cover with US shale producers, whether it's oil or natural gas, is taking on the shakes of the Middle East. And again, I spent much of my career trying to help our country reduce our dependence on foreign oil. So the shale revolution is certainly having a positive impact. I'm going to work hopefully this device. If not, I'll use the arrows, I'll do that. The emissions is important. And first of all, when we talk about the American Gas Association, our members mentioned 200. Every investor owned utility in America is a member of the Natural Gas Utility American Gas Association. We deliver natural gas to 177 million Americans and we are driven by safety. It's our number one priority. And according to the Department of Transportation, our domestic abundance of clean natural gas is delivered via the safest energy system in the nation. The emissions rates, if you look across the panel and I asked to be the last, not only because we're at the end of that value chain closer to the customer than my colleagues, Kerry and Greg, but I also kind of enjoyed Kerry's presentation with Kerry's and when I saw the film and then heard you talk, I realized we also put the accents down on this side of the table, being from, or everyone else has accents, we don't. But it was good to hear those. But in the distribution supply chain of natural gas from production through distribution, according to the EPA and Janet's organization, about 1.3% of the gross natural gas production is lost during this entire production through distribution chain and value. You can see it there in production, 0.41% processing, 0.38, transmission storage, 0.27 and distribution, about 2.4. There are studies that are coming out that these are excellent numbers, they are going to get better and they will continue to get better and we're gonna work to make them better. Within the distribution chain, you see the whale head on one side and the customer, consumer, whether it's a commercial entity, residential, power plant, or in transportation, is that our particular area in the distribution is the 0.24%. Now I wanna put that a little bit in context, when you saw the videos that Kerry was showing, you looked at West Texas and the wide open spaces, you realize how big this country is and how diverse it is. I'll ask you a quick question, but before you knock the wifi down here at Google, I'll give you the answer. How many miles of paved roads are there in America? Just paved roads, not even just interstate highways, all paved roads, whether about 2.6 million miles of paved roads. It's a lot, big country. There are 2.4 million miles of natural gas pipelines in this country. So just envision that and that's a large infrastructure, quite frankly it's the envy of the world and within that distribution, transmission distribution, you're looking at this percentage. It's one of the most efficient systems in the world and certainly within the country in delivery and since 1990, when I was still had a public career, we've seen a drop of 22% in emissions. All the while we've increased the system itself. Since 1990, we added over 600,000 miles of distribution and yet the emissions continue to drop. And why is that? Because we continue to install modern plastic pipe, the most modern technology, at the rate of 30,000 miles a year. We've installed cathodically protected steel mains which are used for a very high pressure delivery, the rate of 1,500 miles per year. And again, we serve with that increased number, the black line going up there, almost 18 million more customers since 1990, which is an increase of 32%. Again, emissions down 22%. So it is a positive story. And we do it again, it's a business model to increase, enhance the integrity of our delivery system for all Americans to benefit. It's driven by safety and the co-benefit of that safer system, tighter system is certainly reduced emissions and we share the goals of trying to reduce our carbon footprint in the country. We have been a strong supporter of Gas Star and now working on Gas Star Gold. And that was conceived in 1993. Importantly, and something that some people tend to forget, in our system, in the distribution world, and again, the 2.1 million miles of that 2.4, is regulated by state utilities, utility commissions. And working with those states, they really have set the regulation and the rate recoveries for how those systems are paid for. That 2.4 million miles of pipeline, by the way, which is an average cost of about a million to five million dollars per mile to install or to replace, was all done by private money, by consumers money, not taxpayer dollars, not the federal government, not by states, it's private. So this is a privately held infrastructure in this country and 38 states working with us, we've worked with Nehruk and others to facilitate an accelerated program to replace pipe that's no longer fit for service and some of this pipe has been in the ground for quite some time. Age is not always the determining factor of fit for service, but we're working on those. We measure that daily and regularly. We're working with EDF and others to get better data because it has to be data driven and we'll have an improved understanding of the system. And lastly, I think the most recent study is with Washington State University. I think Brian Lam, who's the region fellow there is the head of that particular study and I think it's completed and not yet published in peer review or whatever it is. And we're hopeful that study will be released in the near term. So that is it summary. And again, look forward to questions and thank you for the opportunity. Thanks, Dave. So putting a finer point on that where we started on the Goldilocks reference, it seems like we may have a multiple of Goldilocks, a lot of different Goldilocks and some like their porridge hotter and their beds bigger or firmer. And as we go through this, we're gonna try to accommodate how we meet the needs of reducing emissions and continuing to let the system go forward. I wanna start this off in two ways. So first, Janet and Martha, since we have you tee off this discussion, but now you get to hear with other people, I wanna give you the opportunity to respond specifically on points that you think need further explanation. But I also wanna ask the question about as regulators, how you actually balance the fact that so Steve talked about getting better glasses, betting data, better data, better understanding of what the system looks like, where you get the biggest bang for the buck in terms of emissions. As regulators, how do you go about that process of balancing and finding that solution? So Martha, why don't you go first? Let's start here, Janet. Okay, all right. Well, you know, I think it's not a magic formula. It's also not a standard formula. We start with what our authorities are and what our responsibilities are. And if you're looking in the Clean Air Act at the new source performance standard section, for example, that gives the agency guidance and expectations about how we're gonna build those rules. But through all of our rulemaking, of course, we're always expected to consider costs impact on jobs, impact on business. We have a robust interagency review process, as I'm sure you know, where any agency across the federal government has the ability to weigh in on the regulations that we do. So if we're not thinking sufficiently carefully about international implications, for example, the State Department, our colleagues there will weigh in and make sure that we are. But I think that for me, always key is remembering what our job is and following what the Clean Air Act tells us we should look at and basing that on the best data that's available to us. And if you are a scholar of EPA regulations, you will know that there have been times when we put a proposal out based on the best data that we have at the time and we get all kinds of people coming to us and saying, well, that data is no good. Let me give you some more data. Or that data is no good, but we don't have any better data. And so we have to sort through those situations. And I think sometimes those efforts go a little bit more smoothly than in others. This is a situation where there's a lots of work going on very collaboratively to have our data be better. So I mean, that's really where I start from. I would agree with Janet that you have to look at what your authorities are for how you can move forward. I guess from the state perspective, we are closer to the ground when it comes to community concerns and being out in the field and in Colorado hearing what local communities are concerned about. And a lot of that, again, as I mentioned before, are human health issues where what is important for us is the science and making sure that we get good data and that we appropriately evaluate that data. You heard in the first panel that there are a number of studies that are ongoing to collect additional data to really try to understand the emissions profile, both bottom up and top down. There are a number of studies that are ongoing in Colorado specifically to look at emissions coming off of well sites and to, so that's sort of the, I wouldn't really call that the bottom up, but it is to actually look at dispersion modeling or actual dispersion of emissions coming off of well sites. We've got some high altitude studies that were just completed, the Frappe study and looking at, and then with C-130 planes and integrating that with data coming from satellites from NASA to look at what the profile is as much as we can. None of those studies are going to be definitive as in the last answer. They're all going to be cumulative. What we also are faced with at the state are a number of communities that have expressed concern about the impacts on their health. And what we try very much to do is to explain as best we can what we know and what we don't know and to make decisions that are based upon science, that are based upon what we really know and to try to educate communities and then work with the industry itself in addressing community concerns. And so it's an ongoing process, it's an evolving process and we continue to learn and as we continue to learn, we continue to refine what we do in terms of adopting regulations that are meaningful and are reasonable. Martha, I want to continue that point about the community relations because as you get into shale gas development, we're talking at the scale now is thousands of wells, right? So I will go to the vol distortion end of the table to ask this question about, so on investment as the data changes and as the regulations change, how do you find a comfortable space to make a long-term investment? And then for Kerry and Greg specifically, how do you deal with when you look at the scale and scope of this development, has community activism or community relations changed in terms of as a factor of outreach? We talked about licensed operate and how's that affected your business? Maybe I'll just take it first. One of the things I mentioned was our global operating standards for shale oil and gas operations and the fifth standard is about the principles by which we engage communities and it starts incredibly early and the metaphor I would like to use is about seismic. It's about what data do we have to understand what's going on at the surface that is as good if not better than understanding the subsurface, right? And we spend, historically, we've spent an incredible amount of time and energy and money getting good subsurface information to characterize the opportunity. In the onshore and unconventional operations, what we've found and what we're focused on is if we don't feel as good about the robustness of what I call social seismic, the above ground and if we haven't invested a proportional amount well before we engage in any regulatory process because that comes later, then we failed, yeah? And so if the assessment is such that the overall cost and attractiveness would be undermined by that total equation, then that's something that we're probably not gonna do, yeah? But it's getting your mind around with predominantly an engineering company that social seismic is as important as subsurface seismic is a mindset shift, yeah? Pioneer, in areas that we operate, we have not encountered a lot of resistance from the communities. We haven't been drilling in urban areas around a lot of population. It's typically been in smaller communities that are welcoming the jobs and the investment that the industry will bring. Nonetheless, we do a lot of work on the ground. We've done town hall meetings. We engage the communities early on and we work with them to help them prepare for the change that this development will bring to them. But remote, this also has its challenges, yeah? Couple quick points. You asked a question about long-term capital investment and if you're talking about infrastructure like we are, they are long-term in multi-multi-years and you use the Goldilocks again. It's the utility commissions that really do have that finding that right porridge response because they're balancing safety, they're balancing the cost to consumer and the benefits to consumers. And right now because of the very low and stable cost and price of natural gas, which we foresee to be at a stable rate and IHS and others who are here who've done some studies feel in the future study point to decade-long stability there somewhere between four and six dollars. At those rates, and since we're the pass-through, we don't make money off the cost, we like lower cost price for consumers. And now's the time to invest in that infrastructure for safety but also the co-benefit of reducing the footprint. But we also have a host of regulation. So through DOT and PHMSA, anybody know what PHMSA is, the Pipeline and Hazards Materials Safety Administration part of PHMSA, EPA that we work closely with, FERC and at federal level. So there is that combination. And then lastly, from a natural gas perspective, I would submit that our members are the face of gas because we are the interface with the consumer. Pioneer probably is not well known but in you go into your communities you know who your utility is and they get high ratings for service. And again, if you had a warm shower this morning and had a warm house last night, you probably got the benefits of that natural gas. But as the face of the, and we're consumer focused, we think there has to be responsible resource development. It is about a social license from the standpoint that we are dependent on the contract with Americans and more and more globally to assert that this is produced responsibly, delivered safely and it is of the best value for those folks. And then lastly, and maybe you'll get to a question on this American Gas Association. We will assume the presidency of the International Gas Union in Paris in June of this next year. And as such, we'll for three years, we'll be the voice and the leadership for 92 countries that are producers or consumers of natural gas. And this is a message that we're helping them put on the stage and to voice it as a not only responsible resource development but the impact of in communities and globally. And I think you'll see healthy conversations and discussions about reducing carbon footprint and in many areas where this is not a concern, has not been a concern, but we do believe it's a responsible position and leadership role that we'll take. So one of the advantages of not having an EPA rule out yet is that we get a second bite at this apple and we plan to talk about international. Let me open this up to two questions from the floor. We have three simple rules. If you could wait for the microphone, that'd be great. Identify yourself and your affiliation and then to the extent you can, pose your question in the form of a question that's always helpful. So I'm gonna start on the back. Good morning. My name is Patrick Von Bargen with 38 North. I've been very impressed with the presentations of Shell and Pioneer in terms of the kinds of investments they have made in reducing methane emissions. But when you think about the upstream segment of the industry, there are thousands of operators. How do we ensure that there's some kind of level playing field among all those operators so that not just Shell and Pioneer are making investments but that all those operators are making investments and reducing methane emissions? Yeah, and in my mind, I mean, there are a number of mechanisms to do that. Of course, you mentioned Gas Star Gold kind of program, a voluntary program with incentives and recognition and transparency around it to ensure that the continuous improvement is taking place. The regulations at a state level to make sure the learnings and the practices are transferring from state to state because, as Kerry said, these operations are quite different. Coal bed methane in the San Juan basin for all the reasons that you've seen all during the day has a different emission footprint than some of what we're doing in many other parts of North America. So it does need to be fit for the basin that you're in but there's an awful lot of learning from state to state. A company like Shell, a global company, I mean, we operate in 140 countries around the world. We see many different frameworks. We see many different approaches. We certainly try to spend lots of time with regulators and other government bodies to offer what we can in terms of what we see that works and what doesn't work in many parts of the world. So in my mind, I have not seen yet the challenge of reducing methane being a technical hurdle, okay? It is in all the solutions that you've seen from Kerry, for many, you know, of all the other things that we deal with in terms of supplying energy to the world and all the technological challenges of, you know, enhancing renewables and capabilities around renewables and battery storage technology and all of that, many of the solutions you've seen in this space are actually quite basic and actually operationally make a tremendous, and economically make a tremendous amount of sense. But it's about understanding what exactly are the emissions, understanding the operations and then making sure that the, you know, whatever voluntary mechanisms or regulatory mechanisms actually fit the basin and the region that it operates in. I think it's hard for my colleagues at the end of the table to say that federal regulation is one way to do what you suggested. But I'll refer back to our QUADO rulemaking, which is, and that's pretty much how that rule worked. We had a lot of operators who were, as Kerry mentioned, you know, they were doing green completions way before the rule went into effect and there were many operators who were and there were many who were not. And so our rule, which is supposed to be based on the best system of emission reduction that's out there, makes that the floor for everybody. And then that provides the opportunity for the people who wanna go further and be natural gas star gold people or even do it anyway, do that next increment. So I think that there is an important, whether it's at the state level or at the federal level, that's a very important role and the Clean Air Act is kinda designed to do exactly that. Here's the basic minimum that everybody needs to do. And I wholeheartedly agree with what Greg has said about this industry in particular, having technologies available that many of the companies are quite comfortable with and also the huge economic benefits of putting controls on, which, as I said before, is not always the case in environmental regulations. Amy Harder with the Wall Street Journal. Thanks for holding this event. This question is for you, Janet. Can you put into context where EPA's actions on the oil and gas regulation front fits into what you call the federal family? What's really prompting this regulatory effort now, as opposed to say two or three years ago? And specifically, can you compare what EPA's doing to what the Interior Department is doing on the venting flaring regulation that I understand is expected early next year? Some people in the industry say those two regulations are duplicative, given they're both regulating methane. Thank you. So there's a lot in that question, as any good reporter would do. I think the context is what you've been hearing about today, which is an increasing awareness and concern of the role that methane emissions are playing in global climate concerns. And the president's very clear directive and message to the federal agencies and to the country at large that we really have a responsibility to do something to address these, both on the mitigation side, on the adaptation side, and in terms of international leadership. And methane is a key part of that. So that's the context for the methane strategy. As Martha mentioned, and as I mentioned, there are significant more traditional air pollutant benefits to proceeding with these programs. And the Clean Air Act in fact requires that we do that on an ongoing basis. We have many parts of the country where ozone air quality still exceeds federal health expectations. And so it's our responsibility to implement the Clean Air Act to address that. And again, in another fortunate coming together, you can do both of those things here together with these types of programs. I'm not really in a position to speak to your last question about the interior regulations and ours. And as I said, some of those details will become clearer in the near future. But I will say that we work closely with our partners at BLM and DOI to make sure that we're not walking into situations like you suggest where we have inconsistent expectations or duplicative expectations. Frank, can I add one quick point on that, which might surprise the, probably this audience probably understood it, but if you knew from the transcript that we're gonna have conversation about pigging and pigs, you'd think that this was an agriculture meeting, which by the way is still the largest emitter of methane. But the PHMSA has a requirement for inspection, online inspection, big online inspection of transmission and distribution. And when they require that in order to evacuate the line that you're going to hydrostatically test or whatever, to run these pigs, you have to blow down the gas. We found that is the fat tail. That's one of the largest emissions in that 0.24%. So on one hand you have a regulation the federal government saying, you gotta do this. And on the other is saying, well, wait a minute. Now, I don't think that EPA's going this far down this end of the table on the regulation, but the concept is important though. There's a mandatory, but there's also the voluntary. One's a heavy hand to control. The other is incentives and to work to have performance based outcomes, find technology solutions as opposed to just a direct mandated requirement. So it's this balancing thing that has to be met. And I think we do a pretty good job of that. Nick Snow with Oil and Gas Journal. The question is for Dave McCurdy. Earlier, the scientific panel said that local distribution companies are probably the least advanced in terms of monitoring emissions. And I wondered if, since you're heavily regulated, where are you going to get the money to do this? Is this something that's right in the lap of the PUCs? Well, the PUCs do it based on safety. And so you have categories of leaks. And leaks are, you know, in our business we don't like leaks, but there are different types of leaks. Grade one leak is if it is, and again, most people don't realize methane is odorless. That's why we put odorant into methane. And if there's a report of a leak, then we immediately respond to that and you grade it. And if it's a grade one, you're gonna repair it immediately. It's a risk. It's a safety risk. You have to get on top of that. A grade two may be, well, it's a leak, but it's really not significant, but we'll get to it in regular order. And the third is grade three leak that's minor is not a safety risk, but there may be some methane emission there. So the question is, you know, prioritization of those is very costly. And in some of these studies in the urban areas, especially older urban areas, I think you're finding some systems that are going to need to be repaired and the municipalities and the commissions work on that, but that's where you're $5 million plus per mile to repair. And it's not just repairing a particular pipe. You also have to coordinate with water system, the electric system, the utilities, and how many people here complain when they've got a street closed out here for a little while. So you have to coordinate all that. So it's not quite as easily or as cheap. One of Steve's charts is the ICF chart. I think it's called, referred to the McKinsey chart on one hand on the left hand side. You have the cost benefits. The cost band analysis is pretty straightforward. It's an asset, you don't wanna lose it. Fixing a pneumatic valve probably is in order. On the far end of that chart was actually an arrow that didn't even hit the chart. They just kind of had an arrow going up. It's way off the chart. And that's the distribution side where the cost of reducing that or affecting it is so extraordinarily high, it's not effective. And so you try to do things short of that. So it's this constant balance. There are not taxpayer dollars for this. There will not be. These are investment dollars. And we will prioritize those working with commissions. What you will find from our membership quite frankly is we want to accelerate the replacement of pipe. That's the business model. And we will strike that right balance. Again, based on safety, but I think increasingly in some areas more concerned about potential methane. Thanks, Dave. So one of the advantages that we get to get good speakers like this is that we try to get a mouth on time for other commitments. But before we do that, I want to thank this panel. I'm going to ask Drew to come up as our co-host just to give some parting remarks and then I'll thank the panel and the Joel to do. Thank you, everybody. And I realize I'm the barrier between sugar and caffeine. So I will be brief. But again, I wanted to thank all of those of you in the audience and those watching this at home and the office on webinars, the panelists from this panel as well as the panelists from the first panel. And just wanted to give a pretty brief wrap up from what I thought was a very interesting and productive conversation here this morning. So first of all, from the science panel, I think we heard that methane is an incredibly potent greenhouse gas emission and it impacts climate change in a way that can be felt today. And therefore it's a big lever to help reduce overall climate emissions and the warming that we're experiencing. But I think an important thing that I took from that conversation was that you can't just focus on methane. Any action on methane must be done as a compliment to reducing carbon dioxide. We also heard that the United States, oil and gas emissions are the largest industrial source of methane emissions and that it can be relatively cheap to reduce those emissions. And that was the ICF cost curve that we just heard about, which is why I think one of the speakers said in the first panel that methane has to be part of the solution for the overall climate issue. And then we also heard a couple of interesting points in the science panel about there are different sources of data out there, but they're not so different that they can't be reconciled, which I think is an important development that we've kind of walked through and learned about over the last couple of years. And that we need to be able to monitor progress on those reductions. I think that was a theme that we heard both in the science panel, but as well in the second panel, and that there are multiple benefits for reducing that methane. For the second panel, I thought there was an incredibly important conversation and one that there were a lot of themes from both the regulatory perspective as well as from those that sit on the industry side of the table, that methane is a priority. And I think that this notion of methane being a potent greenhouse gas has largely been recognized and ingrained into the operations of those companies that are sitting at this table, which I don't think a couple years ago would have been the case. And so I think those at the table deserve a lot of credit for recognizing an important issue and taking action to resolve it. And because of that, and I think everyone recognized also the need to collaborate in moving forward and finding these solutions. And that there is a lot of good data out there, but there's still a need for better data. And that I think another important takeaway here is that there's a lot being done to reduce those emissions and there are all sorts of activities and programs that are being put in place. We heard of a couple of them and that's being done by many in the industry, but not all. And that is why I think in part we heard that emissions are down in the industry even though the amount of gas being produced and the amount of gas being transported has gone up. And within those programs that are being implemented to reduce emissions, you have a mix of regulatory and voluntary approaches. We heard the value of both of those approaches today. We also heard from the regulator perspective as well as from the EDF perspective that regulations are incredibly important, both at the state and the federal level. We heard that there are plenty of examples of successful regulations both through leak detection and repair and pneumatics as well as Quad O. And that cost effectiveness is a key driver in those regulations. From the industry perspective, I thought we also heard that smart targeted regulations are important and can be an important tool and that there's some perspective about whether or not that should be at the federal level or at the state level. I thought that was an important question raised by a pioneer and that there is an important role of states within that capacity. So I think there's been a lot of food for thought as we move forward, as we seek to hear what EPA and then the federal family is going to be putting forward for those regulations. I think there will be a lot more conversation on this important topic. I think from EDF's perspective, and I think I can speak for CSIS and this as well, that we look forward to continuing that conversation with these group of stakeholders and others as we try to tackle this important issue. So thank you very much. And again, thank you to CIS for hosting this wonderful event. Join me in thanking our panel. Thank you so much.