On Dec. 2, 2023, the Environmental Protection Agency issued its final rule titled “Standards of Performance for New, Reconstructed, and Modified Sources and Emission Guidelines for Existing Sources: Oil and Natural Gas Sector Climate Review.” This rule involves the regulation of methane and volatile organic compound (VOC) emissions from sources in the crude oil and natural gas source category and revises the New Source Performance Standards (NSPS) for new, modified, and reconstructed sources in that source category. The final rule also establishes for the first time emission guidelines that govern how states should regulate methane emissions from existing sources in the source category. Although states are responsible for establishing the performance standards for existing sources, the EPA expects that the same requirements applicable to new sources should also apply to existing sources.

The final rule has not yet been published in the Federal Register. Once that occurs, parties wishing to challenge it have 60 days to file a petition for review in the U.S. Court of Appeals for the D.C. Circuit pursuant to Clean Air Act requirements.

Summary of the Methane Rule

Key elements in the final rule include:

1. Flaring Restrictions: The rule phases out routine flaring of gas from new oil wells, categorizing them based on construction date. New wells constructed after specified dates must route gas to sales lines, use it on-site, reinject it or meet specific criteria for flaring.
2. Super Emitter Program: The introduction of a first-of-its-kind “Super Emitter Program” allows third parties to detect and report events where emissions exceed 100 kilograms or more of methane per hour and report them to the EPA. The EPA will verify the validity of the notifications and then contact operators, who will be required to investigate and report back to the EPA on their findings.
3. Storage Vessels: The final rule changes the definition of “storage vessel” to include not just a single storage facility, but also groups of adjacent tanks known as “tank batteries.”
4. Methane Leak Requirements: The EPA revised its leak detection and repair requirements to provide options for advanced measurement technologies and alternative inspection frequencies.
5. Well Closure: Fugitive emissions monitoring is required until well closure, with a final optical gas imaging survey. Results must be submitted to the EPA, and any detected emissions must be eliminated.
6. Pneumatic Pump and Controller Requirements: All pneumatic pump affected facilities must have zero emissions, with exceptions for specific situations. Pneumatic controllers outside Alaska must also have zero methane and VOC emissions.
7. Well Liquids Unloading and Well Completions: The final rule includes requirements to minimize venting during well liquids unloading events and to regulate well completions, including the routing of flowback and the utilization of salable gas.
8. Centrifugal and Reciprocating Compressors: Centrifugal compressors with wet seals must reduce emissions, while reciprocating compressors must meet a performance-based emissions standard.
9. Covers, Closed Vent Systems and Combustion Control Devices: The EPA included requirements for covers and closed vent systems in the final rule to demonstrate compliance through monitoring. The rule also requires combustion control devices to undergo performance tests every five years.
10. Equipment Leaks at Natural Gas Processing Plants: The rule mandates inspection requirements for equipment at onshore natural gas processing plants, including pumps, pressure relief devices, open-ended valves and flanges.
11. Sweetening Units: Affected facilities with a sulfur production rate of at least five long tons per day must reduce sulfur dioxide emissions by 99.9%.