EPA announces finalized methane emission rules

May 23rd, 2016 by Dakota Software Staff Industry News

The Environmental Protection Agency and the White House recently announced finalized rules for methane emissions related to the oil and natural gas industries. Many involved in those markets view the new rules as a stronger approach than the proposed regulations issued in the summer of 2015. The rule is part of the Obama administration's Climate Action Plan, which has an overall goal of slowing global warming and reducing emissions. USA Today said the new methane emissions regulations aim to cut output of the gas 40 to 45 percent by 2025, with that measurement to be made against reported levels from 2013.

The rule covers methane leaks in nearly all situations in terms of natural gas production, with drilling and pumping at both new and modified wells falling under the regulations. The one major exception, at least currently, is existing wells.

Part of a larger strategy
The new methane rules are one component of the White House's larger effort to reduce emissions and control climate change. The EPA noted during the announcement of these regulations that it is also starting work on a related rules that address methane leaks coming from existing wells, according to political news site The Hill. Those requirements will take some time to craft, however, and the agency doesn't expect to issue them until President Obama is out of office.

"Today, we are underscoring the Administration's commitment to finding commonsense ways to cut methane - a potent greenhouse gas fueling climate change - and other harmful pollution from the oil and gas sector," said Gina McCarthy, EPA administrator, in a statement shared by USA Today. "Together these new actions will protect public health and reduce pollution linked to cancer and other serious health effects while allowing industry to continue to grow."

Making the rules more strict
The methane regulations proposed in 2015 serve as the basis for the finalized proposal announced in May, with some significant changes. In general, the EPA and Obama administration eliminated a number of exceptions and reduced the length of time businesses have to resolve issues. Specifically, wells with low production are no longer exempt from the rules, the requirements for leak monitoring are expanded and leak repair work must be completed more quickly than was originally proposed.

Industry pushback
Many in the oil and natural gas industries believe these environmental regulations will harm the economic viability of their operations and that successful alternatives to the EPA's rules exist. The Hill pointed out statistics from the American Petroleum Institute, which found the industry reduced emissions by 11 percent since 2005 without any federal or state requirement to do so. In general, the institute believes those in the petroleum business already lead the way in terms of reducing emissions. The fact that less wasteful, more efficient drilling systems and tactics often mean higher profits for companies was also highlighted as a reason to give more control to businesses.

For their part, many environmentalist groups have come out in favor of the new regulations. The Sierra Club said the rule is a major, positive shift in the way the government regulates the petroleum industry, according to USA Today. The Environmental Defense Fund and Earthjustice expressed sentiments along those same lines.

There is potential for a legal challenge to the new EPA rules. The Hill noted the Competitive Enterprise Institute, a conservative group, already mentioned the potential for lawsuit in a statement following the official announcement. CEI compared the new methane emission rules to the EPA's Clean Power Plan, which is currently tied up in a major lawsuit.