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An Update on EPA’s Approach to Methane Emissions from the Oil & Gas Sector – Including a Summary of the Agency’s Proposed New Reporting Rule

The U.S. Environmental Protection Agency (EPA) is expected to announce between now and December 31, 2014 its plan for pursuing methane reductions from the oil and gas sector – including whether it will propose new emission reduction regulations.  Additionally, the agency recently modified its greenhouse gas (GHG) reporting rules for oil and gas systems and also proposed expanding those rules so that they would cover many additional oil- and gas-related sources.  This blog post briefly summarizes these recent developments.

Where is EPA Headed with Respect to New Emission Reduction Requirements?

In his March 2014 Methane Reduction Strategy, President Obama directed EPA to study opportunities for reducing methane emissions from the oil and gas sector and to make a determination by this fall as to how best to pursue further reductions.  EPA has yet to announce its “determination” but it is widely anticipated that EPA will not propose new methane capture or leak detection and repair (LDAR) regulations; instead, EPA is generally expected to continue promoting voluntary emission reduction efforts.  But the agency remains under pressure from environmental organizations to actually require emission reduction measures, such as new mandatory LDAR requirements.  For example a recent report by a coalition of environmental organizations asserts that new LDAR regulations focused on methane, coupled with other mandatory methane reduction measures, could “reduce the sector’s methane pollution in half in just a few years.”

New GHG Reporting Requirements Take Effect January 1, 2015, and EPA has also Proposed a Significant Expansion of the Reporting Rules

Although EPA may not propose new methane emission reduction regulations, it is clearly interested in improving the range and quality of methane emission data that it receives – and that it makes available to the public.  Thus, on November 13, 2014, EPA signed a final rule (published in the Federal Register on November 25, 2014) modifying the existing GHG reporting requirements for the oil and gas sector to clarify the exact equipment covered by the regulations and the precise methods that can be used to calculate emissions from that equipment.  The modifications take effect on January 1, 2015 and apply to emissions occurring in 2015.

EPA also just signed a proposed rule that would expand the oil and gas sector GHG reporting requirements to several additional categories of equipment and activities.  The proposed rule has not yet been published in the Federal Register, but it would expand the reporting requirements to include, among other sources, gathering and boosting facilities, completions of fractured oil wells (currently, the rules cover fractured gas wells) and natural gas transmission pipeline blowdowns.  The proposed rule also discusses emission calculation methodologies and the confidentiality of data reported to EPA.  Indeed, the proposed rule lists several categories of emission and equipment-related data and proposes to designate much of that information as not confidential.  That feature of the proposal reflects the agency’s ongoing emphasis on “next generation compliance,” one element of which is greater public [...]

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The President’s Methane Reduction Strategy – Here’s What Energy Companies Need to Know

President Obama recently released a Strategy to Reduce Methane Emissions (Strategy) that sets forth a multi-pronged plan for reducing methane emissions both domestically and globally.  Domestically, the plan is to focus on four sources of methane—the oil and gas sector, coal mines, agriculture and landfills—and to pursue a mix of regulatory actions with respect to those sources.  Energy companies now have the opportunity to help influence exactly what those actions will be.

For the oil and gas sector, the Strategy indicates that the federal government will focus primarily on encouraging voluntary efforts to reduce methane emissions—such as bolstering the existing Natural Gas STAR Program and promoting new technologies.  But the Strategy also identifies two areas of potential mandatory requirements.  First, later this year, the Bureau of Land Management (BLM) will issue a draft rule on minimizing venting and flaring on public lands.  Regulated parties will have the opportunity to submit comments after the proposed rule is released.  Second, the Strategy confirms that the Environmental Protection Agency (EPA) will decide this fall whether to propose any mandatory methane control requirements on oil and gas production companies.  Consistent with that announcement, on April 15, 2014, EPA released five technical whitepapers discussing methane emissions from the oil and gas production process.  The agency is soliciting comments on those whitepapers—they are due by June 16, 2014.

For coal mines, the Strategy indicates that BLM will soon be seeking public input on developing a program to capture and sell methane from coal mines on public lands.  The Strategy further indicates that EPA will continue promoting voluntary methane capture efforts.

For landfills, the Strategy calls for public input on whether EPA should update its regulations for existing solid waste landfills, indicates that EPA will be proposing new regulations for future landfills, and indicates that EPA will continue to support the development of voluntary landfill gas-to-energy projects.

For agriculture, the Strategy does not suggest any new regulatory requirements.  Instead, it indicates that EPA and the Department of Energy will work to promote voluntary methane control efforts and that those agencies will place special emphasis on promoting biogas—starting with the release of a “Biogas Roadmap” in June 2014.

In addition to these sector-specific approaches, the Strategy emphasizes the need for improved methane measurement and modeling techniques, both domestically and globally.  All of the topics covered by the Strategy are ones about which regulated parties may want to submit comments—to EPA, BLM and/or the Office of Management and Budget.




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