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Natural Gas STAR Program

Overview of the Oil and Natural Gas Industry

Oil and natural gas systems encompass wells, gas gathering and processing facilities, storage, and transmission and distribution pipelines. These components are all important aspects of the natural gas cycle—the process of getting natural gas out of the ground and to the end user. Natural gas systems encompass the following industry segments:

  • Production:  Taking raw natural gas from underground formations.
  • Gathering and Processing:  Stripping out impurities and other hydrocarbons and fluids to produce pipeline grade natural gas that meets specified tariffs (pipeline quality natural gas is 95-98 percent methane).
  • Transmission:  Delivery of natural gas from the wellhead and processing plant to city gate stations or industrial end users. Transmission occurs through a vast network of high pressure pipelines. Natural gas storage falls within this sector. Natural gas is typically stored in depleted underground reservoirs, aquifers, and salt caverns.
  • Distribution:  Delivery of natural gas from the major pipelines to the end users (e.g., residential, commercial and industrial).

In the oil industry, some underground crude contains natural gas that is entrained in the oil at high reservoir pressures. When oil is removed from the reservoir, associated natural gas is produced.

The diagram below displays the segments of the oil and natural gas industry and presents the top methane emission sources for each sector.

This diagram displays the segments of the oil and natural gas industry, including production, gathering and processing, transmission, and distribution, and presents the top methane emission sources for each sector. 

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