United States Air and Radiation EPA-430-N-01-001Environmental Protection 6202J Winter 2001Agency

Higher Gas Prices Mean Greater Cost Savings fromReducing Methane EmissionsNatural gas has never been a more valuablecommodity! With elevated gas prices anddemand at an all-time high, some gas companies may see a welcome boost to profits. Today’s high prices also mean thatoperators are likely to have additional cost-effective opportunities to reduce methaneemissions and increase gas sales.

Winter 2001

With annual industry-wide emissions estimated at312 Bcf and well-head prices averaging $4.00/Mcfand higher, approximately $1.2 billion of naturalgas are lost to the atmosphere each year. Now is a good time to take a second look at gas leaks and losses that were not economic to address at lower prices. (continued on page 2)

Action Annual Volume Value of Gas Value of Gas Implementation Payback of Gas Lost Saved at Saved at Cost in Months

$4/Mcf $6/Mcf $4/Mcf $6/Mcf

Replace wet seals with 45,120 Mcf $180,480 $270,720 $240,000 8.8 5.9dry seals in centrifugalcompressors

Directed inspection 2,585 Mcf per $10,340 per $15,510 per $2,065 per N/A N/Aand maintenance at station on station on station on station oncompressor stations average average average average

Install static seal/maintain 5,600 Mcf $22,400 $33,600 $3,000 1.6 1.0pressure in off-linecompressors

Directed inspection and 385 Mcf $1,540 $2,310 $295 N/A N/Amaintenance at gate stations per stationand surface facilities

Reduce TEG circulation 130 to 13,140 Mcf $320 to $480 to Negligible Immediaterates in dehydration units $52,560 $78,840

Replace high-bleed 50 to 200 Mcf $200 to $800 $300 to $1200 $150 to $250 2.3-1.5 1.5-10pneumatic devices withlow-bleed devices

Economic replacement 80 Mcf $320 $480 $100 3.7 2.5of rings and rods incompressor rod packingsystems

Install flash tank separators 7,095 Mcf $31,080 $46,620 $7,160 2.8 1.9(energy exchange pump,300 gal/hr TEG circulation rate)

Potential Cost Savings at $4/Mcf and $6/Mcf

Natural Gas STAR Partner Update n Winter 20012

Historically, Natural Gas STAR has used $2.00/Mcf to calculate savings and evaluate economic opportunitiesfrom methane emission reductiontechnologies and practices. Giventoday’s higher gas prices, potentialsavings are even more impressive, and payback periods are significantlyshorter. The table on page 1demonstrates possible savings and

payback periods for selected STARBest Management Practices andPartner Reported Opportunities, using gas prices of $4.00/Mcf and$6.00/Mcf.

We hope this information willencourage you to consider whichpractices and technologies will boostyour company’s bottom line.

Higher Gas PricesMean Greater Cost

Savingscontinued from page 1

Higher Gas Prices Mean 1Greater Cost Savings

Natural Gas STAR in 4the News

Program Update 5

Program Tools 6

Mitigating Greenhouse 7Gases: New Jersey’s Plan

Service Representatives 8

Document Request Form 10

I N T H I S I S S U E

To showcase the methane reductionefforts of Gas STAR Partners andpromote the Natural Gas STARProgram, this public serviceannouncement appeared pro bonoin the December 1999 issue ofPipeline & Gas Industry and in theMarch 2000 issue of American Gas.

Natural Gas STAR Partner Update n Winter 2001 3

This public serviceannouncementand editorial promoting GasSTAR wasprinted probono on thecover wrap ofthe November/December 2000edition of theHarvardBusiness Review.

Natural Gas STAR Partner Update n Winter 20014

GAS STAR IN THE NEWS

Industry journals are increasinglyinterested in the achievements ofNatural Gas STAR and its partners.These three excerpted articles highlightGas STAR’s recent accomplishments.

—Oil and Gas Journal, December 11, 2000

EPA is expanding its STAR program to promote cost-effectivemanagement practices that could save up to 2.5 bcf, or morethan 70% of the natural gas lost annually by the gathering andprocessing segment of the industry. The new program proposes to reduce gas losses through market-based activitiesthat are profitable for industry partners and beneficial to theenvironment. Industry partners would choose among a number of best management practices recommended by EPAto minimize equipment leaks, reduce gas releases from unit

—GreenBiz.com, week of December 22, 2000

—The American Oil & Gas Reporter, December 2000

STAR Honors Companies For ReducingEmissionsWashington - The U.S. Environmental Protection Agencyannounces that the industry partners in its Natural Gas STARprogram reduced methane emissions from unit operations andequipment leaks by 27 billion cubic feet in 1999. At a gasvalue of $2 an Mcf, these reductions equate to $54 million,EPA notes.

EPA reports that it has awarded Kerr-McGee Oil and GasCorp., Columbia Transmission, and Bay State Gas Co. withSTAR Partner of the Year awards for outstanding performancein identifying and implementing innovative emission-reducingpractices, achieving significant reductions, and supporting

Methane Cuts Save STAR Partners$54 MillionWashington, Dec. 22, 2000 - EPA's Natural GasSTAR program industrial partners reduced methaneemissions from unit operations and equipment leaksby 27 billion cubic feet in 1999, according to anAgency report just released. At a gas value of$2 per thousand cubic feet, these gas savings areworth approximately $54 million. The STARprogram, a voluntary partnership between EPA andthe natural gas industry, focused on identifying andimplementing cost-effective technologies and

From OGJ Newsletter

Natural Gas STAR Partner Update n Winter 2001 5

PROGRAM UPDATE

We are pleased to welcome Kathleen Meier as the newest Natural Gas STARteam member. Kathleen recently worked in the EPA Office of Pesticide Programsand will now work with Paul Gunning and Carrie Henderson to manage NaturalGas STAR. Jon Passe has moved on to another position within EPA’s ClimateProtection Partnerships Division.

Natural Gas STAR Welcomes Five New Partners!

Murphy Exploration and Production Company , a business unit of Murphy Oil Corporation, is an independent oil and gas company based in New Orleans, Louisiana. Murphy’s U.S. exploration and production operations are concentrated in the Gulf of Mexico Region and onshore South Louisiana.

Average daily production from these areas in 2000 was approximately 150 million cubic feet of natural gas and 6,800 barrelsof crude oil and natural gas liquids. This is roughly one-third of Murphy’s total production. Visit Murphy’s Web site at www.murphyoilcorp.com.

Barrett Resources Corporation , based in Denver, Colorado, is an independent natural gas and oil exploration and production company with major emphasis in the Rocky Mountain Region. The company also has producing properties in the Mid-Continent Region and exploration activities in

Peru. Barrett Resources operates a gas marketing and trading group, allowing the company to market its own gas and buy and resell other companies’ natural gas at a profit. Visit Barrett’s Web site at www.brr.com.

How do you like receiving the Partner Update via e-mail? Natural Gas STARwould like your opinion. E-mail your response to Carolyn Henderson at henderson.carolyn@epa.gov.

If you prefer to receive a papercopy, please let us know.

Reliant Energy Arkla, based in Little Rock, Arkansas, and Reliant Energy Entex, based in Houston, Texas, aresubsidiaries of Houston-based Reliant Energy. Together, theyserve over 2.1 million natural gas customers in Louisiana andTexas. Reliant Energy is an international energy services andenergy delivery company with approximately $29 billion inannual revenue and assets totaling more than $32 billion. Thecompany has nearly 24,000 megawatts of power generation

in operation in the United States and nearly 4 million American customers.Visit Reliant’s Web site at www.reliantenergy.com.

Louis Dreyfus Natural GasCorporation is an independent oil and gas producer based in OklahomaCity, Oklahoma. Louis Dreyfus is one of the largest natural gas companies inthe United States, with reserves of 1.464 Tcfe and average daily productionof 345 Mmcfe. Natural gas represents 88 percent of proven reserves. Thecompany’s major operating regions are the Mid-Continent, Permian Basin,and Gulf Coast/Offshore. Visit Louis Dreyfus’s Web site at www.ldng.com.

Natural Gas STAR Partner Update n Winter 20016

PROGRAM TOOLS

We hope that you have received your copy of the Natural Gas STAR Communications Toolkit User’s Guide,designed to help partners communicate about their participation in the program. The kit contains (1) templatesfor press releases, newsletters and web sites; (2) sample communication pieces developed and used by STARpartners; (3) presentations, videos, and articles about the STAR Program; and (4) technical and programmaticinformation. You can request a User’s Guide from Kathleen Meier at (202) 564-9748 or go to the Toolkit onthe Internet at www.epa.gov/gasstar/toolkit.

Natural Gas STAR Partner Update n Winter 2001 7

TECHNICAL NEWS

Mitigating Greenhouse Gases: State of New Jersey First To Implement Action Plan

With the unveiling of itsSustainable State Projecton April 17, 2000, New Jersey became the

first state to establish a goal for greenhouse gas (GHG) reductions withspecific milestones. Last year, the NewJersey Department of EnvironmentalProtection (NJDEP) committed to cutting state GHG emissions by 3.5 percent below 1990 levels by2005. The plan calls for reducing emissions by about 20 million tonsthrough five initiatives: energy conservation, pollution prevention,innovative technologies, recycling and solid waste management, and natural resource protection. NewJersey produces about 2 percent of thenation's greenhouse gases (about 130 million tons a year). If no action istaken, emissions are projected to rise 6 percent annually.

On February 12, all 56 New Jerseycolleges and universities agreed toimplement programs to help reach the state's 3.5-percent GHG reductiontarget. State Environmental ProtectionCommissioner Bob Shinn is nowworking to develop environmentalpartnership agreements with cities and counties that contain a similarcommitment to GHG reductions. The City of Bayonne and Hudson

County have already signed on; three more agreements are in draftstages. Joe Genovay, Office of theCommissioner, notes that Shinn plansto create a statewide program throughthese agreements.

Strategies to address greenhouse gasesinclude the following:

• Establishing incentives thatencourage voluntary reductions,such as a banking and tradingsystem for carbon dioxide emissions

• Promoting energy efficiencythrough the Open Market EmissionTrading Program and requiringpower suppliers in the forthcomingderegulated electricity market to disclose energy efficiencyinformation

• Addressing mobile sources ofcarbon dioxide emissions

• Reducing landfill methaneemissions

• Promoting and establishingincentives for the use of renewableenergy technologies, includinggeothermal, fuel cells, wave, solar,methane from landfills, biofuels andbiomass used in the transportation,heating/cooling and energyproduction sectors

The state’s action plan follows on theheels of an incentive program for permit applicants established by NJDEP.The program seeks to reduce GHGemissions and achieve higher levels ofpollution prevention. The Silver andGold Track Programs for EnvironmentalExcellence offer regulatory flexibility tocompanies with superior track recordsin exchange for a covenant committingto specified environmental gains. Fiveapplicants have signed up for theseprograms since they were announcedin late 1999.

Natural Gas STAR strives to keepPartners informed about greenhouse gas and climate change-related developments at the state and federal levels.

For more information on New Jersey’sgreenhouse gas action plan, contact Mike Winka, NJDEP, at (609) 292-9962. For more informationon the partnership agreements, contact Joe Genovay, Office of theCommissioner, at (609) 633-1238.

Looking for assistance using the new Gas STAR Communications Toolkit or help inpreparing your annual report? If so, your STAR Service Representative is waitingto hear from you. These representatives can help complete program forms,facilitate information exchange among partners, and provide up-to-dateinformation on program developments.

Natural Gas STAR Partner Update n Winter 20018

SERVICEREPRESENTATIVES

Company Name STAR Service RepresentativeAmerada Hess Corporation, TREVOR QUINN

U.S. Exploration & Production

ANR Pipeline Company TREVOR QUINNAtlanta Gas Light Company DAVID FRANKAtmos Energy Corporation THOMAS GRAHAMBaltimore Gas and Electric Co. THOMAS GRAHAMBarrett Resources Corp. THOMAS GRAHAM

Bay State Gas Company THOMAS GRAHAMBelco Energy Corp. JOCELYN SPIELMANBP Amoco Corp. HEATHER WRIGHTBurlington Resources, Inc. THOMAS GRAHAMCentral Hudson Gas & Electric Corporation TREVOR QUINN

Chevron U.S.A. Production Company HEATHER WRIGHTCitizens Gas and Coke Utility HEATHER WRIGHTColorado Interstate Gas Company JOCELYN SPIELMANColumbia Energy Group DAVID FRANK

Distribution CompaniesColumbia Transmission Segment DAVID FRANKConectiv Power Delivery JOCELYN SPIELMANConoco, Inc. THOMAS GRAHAM

Consolidated Edison Company HEATHER WRIGHTof New York, Inc.

David Frank 703/841-0588 or dfrank@erg.com

Rebecca Ferro 703/841-1705 or rferro@erg.com

Thomas Graham 703/841-4378 or tgraham@erg.com

Trevor Quinn 703/841-4816 or tquinn@erg.com

Jocelyn Spielman 703/841-0557 or jspielma@erg.com

Heather Wright 703/841-0547 or hwright@erg.com

Consumers Energy HEATHER WRIGHTDevon Energy Corporation JOCELYN SPIELMAN

Duke Energy Gas Transmission REBECCA FERRODynegy Midstream Services, L.P. REBECCA FERROEl Paso Field Services TREVOR QUINNEl Paso Natural Gas Company TREVOR QUINNEnron Gas Pipeline Group DAVID FRANK

Equitable Resources, Inc. HEATHER WRIGHTExxonMobil Corporation JOCELYN SPIELMANFINA Oil and Chemical Company DAVID FRANKGreat Lakes Gas Transmission Company TREVOR QUINNIroquois Gas Transmission System DAVID FRANK

Kansas Pipeline Company HEATHER WRIGHTKerr-McGee Oil and Gas Corporation JOCELYN SPIELMANKeyspan Energy Delivery JOCELYN SPIELMANKoch Gateway Pipeline Company HEATHER WRIGHTLouis Dreyfus Natural Gas JOCELYN SPIELMAN

Louisville Gas & Electric Company TREVOR QUINNMarathon Oil Company THOMAS GRAHAMMichigan Consolidated Gas Company DAVID FRANKMitchell Energy and Development REBECCA FERRO

Corporation

Natural Gas STAR Partner Update n Winter 2001 9

Murphy Exploration and Production THOMAS GRAHAMCompany

Natural Gas Pipeline Company THOMAS GRAHAMof America/KN Energy

New York State Electric DAVID FRANK& Gas Corporation

Niagara Mohawk HEATHER WRIGHTNorthern Indiana Public Service JOCELYN SPIELMAN

Company

Northwest Natural Gas Company DAVID FRANKOcean Energy, Inc. REBECCA FERROONEOK Field Services REBECCA FERROOrange and Rockland Utilities, Inc. HEATHER WRIGHTPacific Gas and Electric Company JOCELYN SPIELMAN

PECO Energy Company REBECCA FERROPG&E Natural Energy Group JOCELYN SPIELMANPhillips Petroleum Company's REBECCA FERRO

America Division

Pioneer Natural Resources USA, Inc. THOMAS GRAHAM(Domestic Operations)

Pioneer Natural Resources USA, Inc. THOMAS GRAHAM(Gas Processing)

PSNC Energy DAVID FRANKPublic Service Electric and HEATHER WRIGHT

Gas Company

Questar Pipeline Company JOCELYN SPIELMAN

Reliant Energy - Arkla JOCELYN SPIELMANReliant Energy - Entex JOCELYN SPIELMANReliant Energy - Minnegasco JOCELYN SPIELMAN

Rochester Gas & Electric Corporation THOMAS GRAHAMShell Exploration and Production JOCELYN SPIELMAN

CompanySouth Carolina Electric & Gas TREVOR QUINN

Southern California Gas Company DAVID FRANKSouthern Natural Gas HEATHER WRIGHTSouthwest Gas Corporation HEATHER WRIGHTSuperior Water, Light and HEATHER WRIGHT

Power CompanyTennessee Gas Pipeline TREVOR QUINNTexaco Exploration and Production THOMAS GRAHAMTXU Electric and Gas DAVID FRANKTXU Lone Star Pipeline DAVID FRANK

UGI Utilities, Inc. DAVID FRANKUnion Pacific Resources Group, Inc. HEATHER WRIGHTUnocal Corp. TREVOR QUINNUtiliCorp United, Inc. REBECCA FERROWashington Gas JOCELYN SPIELMAN

WBI Holdings, Inc. REBECCA FERROWilliams Gas Pipeline - Texas Gas REBECCA FERROWilliams Gas Pipeline Central REBECCA FERROWilliams-Transco REBECCA FERRO

SERVICE REPRESENTATIVES continued from page 8

The Natural Gas STAR Service Representatives are employees of Eastern Research Group, a consulting firm providing support to EPA’s Natural Gas STAR Program.

Natural Gas STAR Partner Update n Winter 200110

DOCUMENT REQUEST FORM

PLEASE INDICATE WHICHMATERIALS YOU WOULDLIKE TO RECEIVE:

Name & Title: _________________________________________________

Organization: _________________________________________________

Street Address: ________________________________________________

City, State, Zip: ________________________________________________

E-Mail Address:________________________________________________

Telephone #:_______________________ FAX #: __________________

Date Requested: _______________________________________________

Date Info Needed: _____________________________________________

FedEx/UPS # (if info needed asap): ______________________________

Please fax to your STAR ServiceRepresentative at703-841-1440or directly to theNatural Gas STAR Program at202-565-6674.

L E S S O N S L E A R N E D

________ 1. Directed Inspection and Maintenance at Compressor Stations________ 2. Directed Inspection and Maintenance at Gate Stations and Surface Facilities________ 3. Options for Reducing Methane Emissions from Pneumatic Devices in the Natural Gas Industry________ 4. Installation of Flash Tank Separators________ 5. Reducing Methane Emissions from Compressor Rod Packing Systems________ 6. Reducing Emissions When Taking Compressors Off-Line________ 7. Installing Vapor Recovery Units on Crude Oil Storage Tanks________ 8. Replacing Wet Seals with Dry Seals in Centrifugal Compressors________ 9. Reducing the Glycol Circulation Rates in Dehydrators________ 10. Replacing Gas-Assisted Glycol Pumps with Electric Pumps________ 11. Installing Plunger Lift Systems in Gas Wells________ 12. Using Pipeline Pump-Down Techniques To Lower Pipeline Pressure Before Maintenance

S T A R I M P L E M E N T A T I O N T O O L S

________ Video-Production________ Video-Transmission/Distribution________ Case Study-El Paso Natural Gas________ Case Study-Brooklyn Union/Keyspan Energy________ Case Study-Texaco Exploration and

Production, Inc.

O U T R E A C H M A T E R I A L S

________ Natural Gas STAR Program Brochure________ Natural Gas STAR Marketing Package________ Natural Gas STAR Communications

Toolkit________ STAR Partner Update, Summer 1998________ STAR Partner Update, Spring 1999________ STAR Partner Update, Winter 1999________ STAR Partner Update, Fall 2000

Most of these materials are available on the Internet at www.epa.gov/gasstar