EPA’s New Methane Rules on Oil and Gas Operations Spells Trouble for Industry
EPA’s New Methane Rules on Oil and Gas Operations Spells Trouble for Industry
The Rule:
On August 18th, the U.S. EPA proposed rules that would require new and modified oil and natural gas operations to cut emissions of methane. The proposed rules would be part of a broader effort under President Obama’s Climate Action Plan to reduce methane emissions by 45 percent by 2025. If the proposed federal rules were to become effective, new and modified oil and gas operations would be required to find and repair gas leaks; limit emissions from equipment; install technology to better track and prevent emissions; and capture natural gas from the completion of hydraulically fractured oil wells. If implemented, the new standards are estimated to reduce emissions of methane by 340,000 to 400,000 tons by 2025.
Backdoor to regulate existing facilities?
Although the proposed rules supposedly do not apply to existing facilities, the current proposal is written under Section 111 (b) of the Clean Air Act, i.e., the same section used by the EPA to regulate carbon dioxide pollution by power plants. Similar to the carbon rule, the new regulation would stipulate that EPA must next consider whether to use Section 111 (d) to cover existing sources in the same category. Thus, it is possible that a regulation addressing emissions of methane from existing sources may follow. The oil and gas industry has said that federal regulation of new or existing facilities is not needed to reduce emissions of methane as emissions have already been dropping according to EPA inventories.
The EPA will take comment on the proposals for 60 days. The agency will announce public hearings on the proposed rules in coming days.
More information on the proposed rules is available here.
Mitchell Chadwick attorney Aman Sidhu assisted with this article.