EPA Proposes Rollback to 2016 Methane Rule

Akin Gump Strauss Hauer & Feld LLP

Akin Gump Strauss Hauer & Feld LLP

[co-author: Bryan Williamson, Law Clerk]

On September 11, 2018, the U.S. Environmental Protection Agency (EPA) announced a proposed rule to amend various provisions of a key Obama-era regulation that sought to reduce methane emissions from oil and natural gas operations. The proposed rule would amend many provisions of the 2016 rule’s new source performance standards and replace them with less stringent monitoring, repair and certification requirements for oil and natural gas operators.1 EPA Acting Administrator Andrew Wheeler stated that the proposed rule would support “increased domestic energy production” and save the oil and gas industry up to $484 million in regulatory compliance costs by 2025.2

Specifically, the proposed rule would:

  • require less frequent monitoring of leaks at oil and gas wells and compressor stations
  • extend the time that oil and gas operators have to repair leaks in wells and compressor stations
  • allow oil and gas operators in six states to choose to follow their state’s regulatory standards instead of the potentially more stringent federal standards3
  • permit oil and gas operators to use their own engineers—as opposed to third-party professional engineers—to evaluate emissions systems and determine when it is “technically infeasible” to control emissions from pneumatic pumps
  • simplify the process for applying for permits to use alternative practices not delineated by EPA to achieve emissions reductions.4

Along with the anticipated cost savings, the proposed rule would have a significant effect on pollutant emissions.5 EPA estimates that the proposed rule’s less stringent requirements could negate emissions reductions of 480,000 tons of methane, 120,000 tons of volatile organic compounds and 4,700 tons of hazardous air pollutants through 2025.6 Notably, and perhaps as a result, EPA failed to discuss the proposed rule’s impact on public health and climate change.  This starkly contrasts with the 2016 rule, where EPA explicitly stated that the pollutants associated with methane emissions are linked to reduced lung function, asthma attacks, asthma development, emergency room visits, hospital admissions, early death from respiratory and cardiovascular causes, cancer and other serious health effects.7 In addition, methane has a global warming potential that is more than 25 times greater than that of carbon dioxide, the reduction of which was “an essential part of an overall strategy to address climate change,” according to EPA in 2016.8

The agency will accept public comments on the proposed rule for 60 days after the rule is published in the Federal Register, and it plans to hold a public hearing in Denver, Colorado.

1 EPA Fact Sheet, “EPA Proposes Amendments to the 2016 New Source Performance Standards for the Oil and Natural Gas Industry” (Sept. 11, 2018), https://www.epa.gov/sites/production/files/2018-09/documents/oil_and_gas_technical_proposal_fact_sheet.9.11.18_0.pdf.

2 EPA Press Release, “EPA Proposes Oil and Gas Targeted Improvements Package to Advance President Trump’s Energy Dominance Agenda” (Sept. 11, 2018), https://www.epa.gov/newsreleases/epa-proposes-oil-and-gas-targeted-improvements-package-advance-president-trumps-energy.

3 Under the proposed rule, the four states in which oil and gas operators would be able to choose to follow the state standards in lieu of the federal standards as applied to both well sites and compressor stations are California, Colorado, Ohio and Pennsylvania. Oil and gas operators in Texas and Utah would be able to choose to follow the state standards as applied to only well sites, not compressor stations.

4 See generally supra note 1.

5 See id. at 7.

6 Id.

7 EPA Fact Sheet, “EPA’s Actions to Reduce Methane Emissions from the Oil and Natural Gas Industry” (May 12, 2016), https://www.epa.gov/sites/production/files/2016-09/documents/nsps-overview-fs.pdf.

8 Id. at 2.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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