EPA Rescinds Obama-Era Methane Emission Rules
As widely predicted, the US Environmental Protection Agency (EPA) on August 13 finalised two new rules for the oil and gas industry that remove “ineffective and duplicative requirements”, including regulations controlling methane emissions in the production and processing sectors of the industry.
EPA administrator Andrew Wheeler announced the new rules during a visit to Pittsburgh, PA, in the heart of the Marcellus shale gas region. He was accompanied by deputy US energy secretary Mark Menezes, Pennsylvania congressman Guy Reschenthaler and Cosmo Servidio, the EPA’s mid-Atlantic regional administrator.
The new rules are the EPA’s response to an executive order issued by US president Donald Trump in 2017 directing the EPA to review, and if appropriate, revise oil and gas new source performance standards (NSPS) imposed by former president Barack Obama in 2016.
“EPA has been working hard to fulfill president Trump’s promise to cut burdensome and ineffective regulations for our domestic energy industry,” Wheeler said. “Regulatory burdens put into place by the Obama-Biden administration fell heavily on small and medium-sized energy businesses. Today’s regulatory changes remove redundant paperwork, align with the Clean Air Act, and allow companies the flexibility to satisfy leak-control requirements by complying with equivalent state rules.”
Combined, the two final rules are estimated to yield net benefits of $750-$850mn from 2021 to 2030, the annualised equivalent of about $100mn a year. Combined with other deregulatory actions, they save an estimated $94bn in “unnecessary” regulatory costs, the EPA said.
The first rule, referred to as the policy package, determines that adding the transmission and storage segment of the industry to EPA rules was improper, and removes those segments from the regulations.
The policy package also makes clear that oil and gas operators will still be required to reduce emissions of volatile organic compounds (VOCs) in the production and processing segment of the industry. But methane control requirements for the production and processing segments are removed, the EPA said, because the controls used to reduce VOC emissions also reduce methane emissions.
The separate regulation of methane imposed by Obama’s 2016 rule, the EPA said, was both “improper and redundant.”
In addition, the policy package establishes EPA’s position that the Clean Air Act requires EPA to make a finding that a pollutant contributes significantly to air pollution before setting NSPS requirements.
“The Obama EPA failed to properly make that finding for methane emissions from the production and processing segments, which is a second reason why the package removes those requirements,” the EPA said.
The second rule, referred to as the technical package, includes changes to the NSPS that will directly benefit smaller oil and gas operators who rely on straightforward regulatory policy to run their businesses and provide Americans with reliable, affordable energy.
Specifically, the rule exempts operators of low-production wells from expending significant funds to monitor leaks, reduces monitoring of leaks at gathering facilities and compressor stations from quarterly to twice yearly, allows industry to meet state rather than EPA requirements and updates the requirements for scheduling leak repairs to “respect the realities of the oil and gas industry.”