In November 2021, pursuant to the Biden Administration’s “U.S. Methane Emissions Reduction Plan” and under the terms of the Inflation Reduction Act, the Environmental Protection Agency (“EPA”) published a proposed rule intended to mitigate climate-destabilizing pollution and protect human health by reducing greenhouse gases, including methane, and volatile organic compound (“VOC”) emissions from the oil and natural gas industry. Methane, a climate “super pollutant,” is many times more potent than carbon dioxide and is responsible for approximately one third of the warming from greenhouse gases occurring today.
Purpose and Intent of the Final Rule
The Final Rule, 89 Fed. Reg. 16820-17227 (Mar. 8, 2024), which went into effect in May 2024, is expected to yield significant climate and health benefits for all Americans by achieving historic reductions in methane pollution, as well as smog-forming VOCs and toxic air pollutants like benzene and toluene. The Final Rule is also expected to avoid an estimated 58 million tons of methane emissions from 2024 to 2038 – nearly 80 percent less than projected methane emissions without the rule. It is anticipated that the rule will also avoid 16 million tons of smog-forming VOC emissions and 590,000 tons of air toxics.
According to the EPA, methane is both the main component of natural gas and a potent greenhouse gas. Using one standard metric (the 100-year global warming potential, which is a measure of the climate impact of emissions of 1 ton of a GHG over 100 years relative to the impact of the emissions of 1 ton of carbon dioxide over the same time frame), methane has about 30-times as much climate impact as carbon dioxide. The EPA’s rulemaking process responded to nearly one million total public comments from a wide range of stakeholders, including state and local governments, Tribal nations, representatives of the oil and natural gas industry, communities affected by oil and gas pollution, and environmental and public health organizations.
Impact of the Final Rule
The Final Rule bolsters the reporting requirements for petroleum and natural gas systems by improving the accuracy of annual emissions reporting by facilitating the use of satellite data to identify super-emitters and quantify large emission events, requiring direct monitoring of key emission sources, updating the methods for quantification of methane emissions, incorporate advances in methane emissions measurement technology, and streamline compliance with other EPA regulations. The Final Rule applies to i) onshore well sites; ii) storage tank batteries; iii) gathering and boosting compressor stations; and iv) natural gas processing plants. Approximately 8,000 facilities are required to report their emissions annually, and the reported data are made available to the public in October of each year. These revisions to EPA’s greenhouse gas reporting program have been authorized by Congress.
To offset the financial burden of compliance with the Final Rule, the Biden Administration is also mobilizing over $1 billion in financial and technical assistance to accelerate the transition to no- and low- emitting oil and gas technologies, as part of broad efforts to cut wasteful methane emissions.
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