On August 13, 2020, EPA issued two final rules that will have a significant impact on methane emissions, a potent greenhouse gas. The final rules were issued under the Clean Air Act’s New Source Performance Standards (“NSPS”) for the oil and natural gas industry and rescind Obama-era rules issued in 2012 and 2016. EPA categorized the two new rules as (1) Policy Amendments and (2) Technical Amendments.
Key provisions from these two rules include the following:
- Policy Amendments:
- Removes the natural gas transmission and storage segment of the oil and natural gas industry from regulation.
- Rescinds methane and volatile organic compounds (“VOCs”) emissions standards for the natural gas transmission and storage segment of the oil and natural gas industry.
- Rescinds methane emissions standards for the production and processing segments of the oil and natural gas industry and finds that EPA is no longer required or authorized to issue emission guidelines for methane from existing sources in the industry’s production and processing segments.
- Finds that the Clean Air Act requires, or authorizes, EPA to make a “significant contribution finding” as a predicate to regulating any air pollutant that was not considered when EPA first listed or regulated an industry “source category.”
- Technical Amendments:
- Reduces the frequency of required fugitive emissions monitoring for gathering and boosting compressor stations from quarterly to twice a year and exempts low-production wells from fugitive monitoring requirements altogether.
- Reduces the recordkeeping and reporting requirements of the fugitive emissions program.
- Changes include allowing owners and operators to determine the best means to ensure all components are monitored, rather than having to include a site map and an observation path in the monitoring plan.
- Updates fugitive emissions repair requirements.
- Provides additional technical updates covering fugitive emissions monitoring and repairs, alternative means of emissions limitations, pneumatic pumps, engineer certifications for closed vent systems, and storage vessels.
As we discussed on this Blog previously, these rules were originally proposed on August 28, 2019. EPA held public hearings on the proposed amendments, and received nearly 300,000 written comments on the Policy Amendments and more than 500,000 written comments on the Technical Amendments.
According to EPA’s analysis:
The Regulatory Impact Analysis (RIA) for the two rules estimates that, combined, the two actions will yield $750 to $850 million in net benefits over the period from 2021-2030, (7 percent and 3 percent discount rates, respectively), the annualized equivalent of nearly $100 million in net benefits a year.
EPA also estimates that from 2021-2030, the combined rules will result in an increase in 850,000 short tons of Methane emissions and 140,000 tons of VOC emissions.
Environmental groups, liberal states and other interest groups are all but certain to sue to try to block implementation of the new rules, with Earthjustice staff attorney Tim Ballo recently making the following statement:
The Trump administration is once again putting industry interests over people and public health by gutting these common-sense emission standards. The rollback would only further exacerbate a climate crisis that is already near a point of no return. We cannot afford to go back. We’ve successfully sued the Trump administration in their attempt to dismantle methane emission standards in the past, and we’ll sue again to keep these standards in place.
More information about these rules is available at EPA’s website. The rules will take effect 60 days after they are published in the Federal Register.