Environmental and Energy Law Blog

Monday, June 20, 2016

EPA Unveils New Methane Emissions Rules

What is the extent of methane emissions in the U.S. oil and gas industry?

In May, the Environmental Protection Agency (EPA) released a new rule designed to curb methane emissions in the oil and gas industry. The goal is to prevent 11 million tons of "carbon dioxide equivalent" emissions by 2025 from new or modified oil and gas wells. The EPA also plans to regulate existing oil rigs, well pads and auxiliary equipment after further study of emissions from these sources.

This comes in conjunction with a number of new rules issued by the Obama Administration with more on the way before the president's term ends in January 2017. While the EPA contends the new policies will help fight climate change and reduce air pollution, the debate over how much methane is being emitted by sources in the U.S., and how this contributes to climate change, has not been settled.

With this regulation the EPA is targeting new industrial equipment because of the anticipated expansion of the natural gas sector. Whether the agency will succeed in regulating existing equipment remains to be seen, but the time constraints of Obama's time in office prompted the EPA to target new equipment now. Moreover, the regulator previously warned that methane emissions were on the rise due to the spike in U.S. shale oil and gas drilling. The EPA estimated that there were 721.5 million metric tons of methane emitted in 2013, making the oil and gas sector the largest source of methane emissions in the U.S.

While applauding this policy, an array of environmental groups, including the Clean Air task Force and the Environmental Defense Fund,  have pushed for more aggressive measures in the future. Meanwhile, the oil and gas industry oppose this and any future measures, and contends that self policing is working. The American Petroleum Institute also believes the EPA's cost-benefit analysis is not accurate and the new regulations will be duplicative and costly, stifle innovations and drive up energy costs. By saddling companies with new regulations, says the API, the regulations will impede the industry's long standing efforts to prevent emissions, especially in light of the fact that methane is a viable by-product that the industry already sells.

The Obama administration ultimately intends to cut industrial methane emissions as much as 45 percent below 2012 levels over the next ten years, even as carbon dioxide still plays a greater role in climate change. At this juncture, the effectiveness of the new regulations and the cost to industry remain unclear. In the meantime, if you have questions about complying with this regulation, or other health, safety and regulatory matters you should engage the services an experienced attorney.

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