API Seeks Review of EPA Rule to Cut Methane Emissions
The American Petroleum Institute filed a petition with a federal appeals court in Washington to review the Environmental Protection Agency’s new regulations targeting methane emissions from oil and natural gas operations, according to news reports.
“API is continuing to work with EPA to advance a final methane rule that builds on the industry’s emissions reduction progress, but we remain concerned with some technical provisions and implementation hurdles in the final rule,” API Vice President of Natural Gas Markets Dustin Meyer told BNN Bloomberg in an article published May 7, one day after the Biden-Harris administration announced a final rule to cut methane emissions, and strengthen greenhouse gas emissions reporting for the oil and gas sector.
API’s Vice President of Corporate Policy Aaron Padilla said in a May 6 statement on the EPA’s final revision to the Greenhouse Gas (GHG) Reporting Program:
“API has raised serious concerns about several aspects of the proposed EPA Subpart W rule, including flawed methodologies that could lead to inaccurate reporting of higher GHG emissions and increased taxes on American energy at a time of geopolitical instability and economic inflation. We are reviewing the final rule and will work with Congress and the administration as we continue to reduce GHG emissions while producing the energy the world needs.”
In October 2023, API urged the Biden administration to revise the proposed Subpart W greenhouse gas (GHG) reporting rule so that it reflects the progress industry has made to reduce emissions, increases transparency and accuracy of reporting, and incentivizes innovations in the use of empirical data and cost-effective methane detection technologies. In comments submitted to the EPA on the proposed “Greenhouse Gas Reporting Rule: Revisions and Confidentiality Determinations for Petroleum and Natural Gas Systems,” API joined with the American Exploration & Production Council, Independent Petroleum Association of America, the Petroleum Alliance of Oklahoma, and the American Fuel and Petrochemical Manufacturers in expressing concern that several components of the rule as proposed could create undue cost burdens on producers and create regulatory incoherence with related regulatory efforts to reduce methane emissions. The associations also reiterated their support for a cost-effective, technically feasible final rule and proposed solutions to improve many of the methodologies in the proposed rule.
“Since its inception, the oil and natural gas industry has participated as key collaborative stakeholders advancing the EPA Greenhouse Gas Reporting Program (GHGRP) by contributing expertise and proposing methodologies that reflect the reality of the industry and its evolving day-to-day operating practices,” said Padilla, API’s vice president of corporate policy. “We strongly support an accurate GHG emissions reporting framework, though we are also concerned that several aspects of EPA’s approach with this proposed rulemaking could ultimately hinder innovation and impose high implementation burdens without the same level of added value for the public.”
The comment letter identifies several areas of concern within the proposed rules and provides recommendations that allow industry to continue to reduce GHG emissions cost effectively and increase transparency and accuracy. Proposed solutions include allowing for the optional use of measured data in addition to EPA or company developed emission factors; maintaining consistency with other EPA emissions rulemakings to avoid conflicting requirements; and offering more feasible alternatives for sources when proposed changes would impose high implementation burdens for small accuracy improvements.
Revisions to EPA’s Greenhouse Gas Reporting Program authorized by Congress will bring greater transparency and accountability for methane emissions from oil and natural gas facilities, one of the major drivers of climate change, the administration said in its May 6 announcement of the final rule.
The final rule to strengthen, expand, and update methane emissions reporting requirements for petroleum and natural gas systems under EPA’s Greenhouse Gas Reporting Program was required by President Biden’s Inflation Reduction Act. The final revisions will ensure greater transparency and accountability for methane pollution from oil and natural gas facilities by improving the accuracy of annual emissions reporting from these operations, the administration said.
“Oil and natural gas facilities are the nation’s largest industrial source of methane, a climate ‘super pollutant’ that is many times more potent than carbon dioxide and is responsible for approximately one third of the warming from greenhouse gases occurring today,” according to the statement. Here is more, slightly edited for space and clarity, from the statement:
EPA’s latest action complements the Biden-Harris Administration’s whole-of-government initiative to slash methane emissions from every sector of the economy under the U.S. Methane Emissions Reduction Plan. In 2023, the Administration took nearly 100 actions, with coordination by the White House Methane Task Force, to bolster methane detection and reduce methane pollution from oil and gas operations, landfills, abandoned mines, agriculture, industry, and buildings.
The final rule updating the Greenhouse Gas Reporting Program is a key component of the Inflation Reduction Act’s Methane Emissions Reduction Program, as designed by Congress to help states, industry, and communities implement recently finalized Clean Air Act methane standards and slash methane emissions from the oil and gas sector. The Biden-Harris 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.
“As we implement the historic climate programs under President Biden’s Inflation Reduction Act, EPA is applying the latest tools, cutting edge technology, and expertise to track and measure methane emissions from the oil and gas industry,” said EPA Administrator Michael S. Regan. “Together, a combination of strong standards, good monitoring and reporting, and historic investments to cut methane pollution will ensure the U.S. leads in the global transition to a clean energy economy.”
Recent studies reveal that actual emissions from petroleum and natural gas systems are much greater than what has historically been reported to the GHGRP. This rule addresses that gap, including by facilitating the use of satellite data to identify super-emitters and quantify large emission events, requiring direct monitoring of key emission sources, and updating the methods for calculation. Together these changes support complete and accurate reporting and respond to Congress’s directive for the measurement of methane emissions to rely on empirical data.
Today’s announcement is EPA’s latest step in tackling methane emissions that are fueling climate change, building on the agency’s recently finalized Clean Air Act standards to sharply reduce methane and other harmful air pollutants from the oil and natural gas industry, promote the use of cutting-edge methane detection technologies, and deliver significant economic and public health benefits from methane emissions reductions. That rule established a Super-Emitter Program to help detect large leaks and releases, and today’s reporting rule will require owners and operators to quantify and report the emissions detected through that Program to help close the gap between observed methane emissions and reported emissions.
The final subpart W rule will dramatically improve the quality of emissions data reported from oil and natural gas operations, with provisions that improve the quantification of methane emissions, incorporate advances in methane emissions measurement technology, and streamline compliance with other EPA regulations. For the first time, EPA is allowing for the use of advanced technologies such as satellites to help quantify emissions in subpart W. In addition, EPA is finalizing new methodologies that allow for the use of empirical data for quantifying emissions, including options added in response to public comments on the proposed rule. The final rule also allows for the optional earlier use of empirical data calculation methodologies for facilities that prefer to use them to quantify 2024 emissions. These changes will improve transparency and expand the options for owners and operators to submit empirical data to demonstrate their effort to reduce methane emissions and identify whether a Waste Emissions Charge is owed, based on thresholds set by Congress.
Advanced measurement technologies, and their use for annual quantification of emissions, are evolving rapidly. EPA is committed to transparent and continual improvements to its programs to account for these advancements while ensuring reporting is accurate and complete. The agency intends to take the following steps to gather further information about advanced measurement technologies and to inform potential regulatory changes or other standard setting programs that encourage the use of more accurate and comprehensive measurement strategies:
This summer, EPA will solicit input on the use of advanced measurement data and methods in subpart W by issuing a Request for Information and opening a non-regulatory docket, including specific questions and topics on which EPA seeks input from the public. EPA intends to use the feedback received to consider whether it is appropriate to undertake further rulemaking addressing the use of advanced measurement technologies in subpart W, beyond the role for these technologies that is already provided in today’s rule.
EPA also seeks to continuously update its knowledge about new measurement and detection technologies, and to elicit input from stakeholders and experts about how such advances should inform EPA’s regulations. To keep pace with this dynamic field, EPA plans to undertake a solicitation or engagement for information about advanced measurement and detection technologies (in the form of a Request for Information, workshop, or similar mechanism) on at least a biennial basis. These engagements will enable EPA to learn about technological advances and the extent to which there is robust information about their accuracy, reliability, and appropriateness for use in a regulatory reporting program.
Background on the Methane Emissions Reduction Program in the Inflation Reduction Act
Methane is a climate “super pollutant” that is more potent than carbon dioxide and responsible for approximately one third of the warming from greenhouse gases occurring today. The oil and natural gas sector is the largest industrial source of methane emissions in the United States. Quick reduction of these methane emissions is one of the most important and cost-effective actions the United States can take in the short term to slow the rate of rapidly rising global temperatures.
EPA issued a final rule in December 2023 to sharply reduce methane emissions and other harmful air pollution from new and existing oil and gas operations. In addition, EPA is working to implement the three-part framework of the Inflation Reduction Act’s Methane Emissions Reduction Program.
First, EPA is partnering with the U.S. Department of Energy (DOE) to utilize resources provided by Congress in the Inflation Reduction Act to provide over $1 billion dollars in financial and technical assistance to accelerate the transition to technologies that reduce methane emissions and may include funds for activities associated with marginal (i.e., low-producing) conventional wells, support for methane monitoring, and funding to help reduce methane emissions from oil and gas operations.
Second, with today’s announcement, as directed by Congress, EPA is updating subpart W of the Greenhouse Gas Reporting Program to ensure that reporting of methane emissions from oil and natural gas operations is based on empirical data and accurately reflects emissions.
Third, in January 2024 EPA proposed a rule to implement Congress’ requirement for a Waste Emissions Charge. To take advantage of near-term opportunities for methane reductions while EPA and states work toward full implementation of the final oil and gas rule, Congress directed EPA to collect a charge on methane emissions from large oil and gas facilities that are high-emitting and wasteful, based on data submitted under subpart W.
Background about Greenhouse Gas Reporting Program Requirements for Petroleum and Natural Gas Sector
The GHGRP requires reporting of greenhouse gas data and other relevant information from large GHG emission sources, fuel and industrial gas suppliers, and CO2 injection sites in the United States. 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.
Under the GHGRP, owners or operators of facilities that contain petroleum and natural gas systems and emit 25,000 metric tons or more of GHGs per year (expressed as carbon dioxide equivalents) report GHG data to EPA. Owners or operators collect GHG data; calculate GHG emissions; and follow the specified procedures for quality assurance, missing data, recordkeeping, and reporting. Subpart W consists of emission sources in ten segments of the petroleum and natural gas industry.
The administration proposed the rule to reduce methane emissions for the oil and gas sector in January, including a charge on certain large emitters of waste methane from the oil and gas sector that exceed emissions intensity levels set by Congress. Working in tandem with unprecedented funding secured by President Biden under the Inflation Reduction Act and recently finalized technology standards for the industry issued in December 2023, the proposed Waste Emissions Charge encourages the early deployment of available technologies and best practices to reduce methane emissions and other harmful air pollutants before the new standards take effect.
“Under President Biden’s leadership, EPA is delivering on a comprehensive strategy to reduce wasteful methane emissions that endanger communities and fuel the climate crisis,” said EPA Administrator Michael S. Regan. “Today’s proposal, when finalized, will support a complementary set of technology standards and historic resources from the Inflation Reduction Act, to incentivize industry innovation and prompt action. We are laser-focused on working collectively with companies, states, and communities to ensure that America leads in deploying technologies and innovations that aid in the development of a clean energy economy.”
“I’m pleased to see the Biden Administration move forward with this critical program to slow climate change and protect our one and only planet,” said Senator Carper, Chairman of the Senate Environment and Public Works Committee. “We know methane is over 80 times more potent than carbon dioxide at trapping heat in our atmosphere in the short term. Thankfully, the Methane Emissions Reduction Program – which Congress adopted as part of the Inflation Reduction Act – will incentivize producers to cut wasteful and excessive methane emissions during oil and gas production.”
“For too long it has been cheaper for oil and gas operators to waste methane rather than make the necessary upgrades to prevent leaks and flaring. Wasted methane never makes its way to consumers, but they are nevertheless stuck with the bill,” said Rep. Frank Pallone, Jr., Ranking Member of the House Energy and Commerce Committee. “The Methane Emissions Reduction Program and the proposed Waste Emissions Charge will ensure consumers no longer pay for wasted energy or the harm its emissions can cause. I commend EPA for taking the next step to hold the largest polluters accountable and protect American families from dangerous methane pollution.”
“EPA’s proposal for a fee on oil and gas methane pollution implements the clean air protections for Americans that were part of the Inflation Reduction Act,” said Fred Krupp, President of the Environmental Defense Fund. “It’s common sense to hold oil and gas companies accountable for this pollution. Proven solutions to cut oil and gas methane and to avoid the fee are being used by leading companies in states across the country.”
Methane is a climate “super pollutant” that is more potent than carbon dioxide and responsible for approximately one third of the warming from greenhouse gases occurring today. The oil and natural gas sector is the largest industrial source of methane emissions in the United States. Quick reduction of these methane emissions is one of the most important and cost-effective actions the United States can take in the short term to slow the rate of rapidly rising global temperatures.
EPA issued a final rule in December 2023 to sharply reduce methane emissions and other harmful air pollution from new and existing oil and gas operations. In addition, EPA is working to implement the three-part framework of the Inflation Reduction Act’s Methane Emissions Reduction Program.
First, EPA is partnering with the U.S. Department of Energy (DOE) to utilize resources provided by Congress in the Inflation Reduction Act to provide over $1 billion dollars in financial and technical assistance to accelerate the transition to no- and low- emitting oil and gas technologies, including funds for activities associated with low-producing conventional wells, support for methane monitoring, and funding to help reduce methane emissions from oil and gas operations.
Second, EPA is working with industry and other stakeholders to improve the Greenhouse Gas Reporting Program and increase the accuracy of reported methane emissions.
Third, with today’s proposal, EPA seeks to encourage facilities with high methane emissions to meet or exceed the levels of performance set by Congress – performance that is already being achieved by leading oil and gas companies. The Inflation Reduction Act established a Waste Emissions Charge for methane from certain oil and gas facilities that report emissions of more than 25,000 metric tons of carbon dioxide equivalent per year to the Greenhouse Gas Reporting Program. As directed by Congress, the Waste Emissions Charge starts at $900 per metric ton of wasteful emissions in 2024, increasing to $1,200 for 2025, and $1,500 for 2026 and beyond, and only applies to emissions that exceed the statutorily specified levels.
EPA’s proposed rule addresses details regarding how the charge will be implemented, including the calculation of the charge and how exemptions from the charge will be applied. Facilities in compliance with the recently finalized Clean Air Act standards for oil and gas operations would be exempt from the charge after certain criteria set by Congress are met. The agency expects that over time, fewer facilities will face the charge as they reduce their emissions and become eligible for this regulatory compliance exemption.
In the meantime, the Waste Emissions Charge will help encourage the oil and gas industry to stay on target to lower emissions. Oil and natural gas operations with methane emissions in excess of the emissions intensity levels established in the Inflation Reduction Act can reduce or eliminate any charge by deploying readily available technologies to reduce harmful and wasteful emissions. This program will help to level the playing field for industry leaders already employing best practices and drive near-term opportunities for more widespread methane reductions while EPA and states work toward full implementation of the Clean Air Act standards. Together, EPA’s Clean Air Act rule and the three Inflation Reduction Act provisions will advance the adoption of clean, cost-effective technologies, reduce wasteful practices, and yield significant economic and environmental benefits, while driving continued innovation in methane detection, monitoring, and mitigation techniques.
