After much anticipation, the Environmental Protection Agency issued its final rule this week aimed at cutting methane emissions as well as strengthening and updating greenhouse gas emissions (GHG) reporting for the oil and gas industries.
Methane is a “super pollutant” that is many times more potent than carbon dioxide. Methane also contributes to approximately one third of the global warming from GHGs today, and the oil and natural gas sector is the largest industrial source of methane emissions in the United States. Toward that end, in 2022, Congress passed the Inflation Reduction Act as part of a whole-of-government initiative to reduce methane emissions from all economic sectors, including oil and gas operations, landfills, mines, and agriculture (see ELM’s recent methane rule finalization coverage here).
Recent studies have shown that emissions from the oil and gas industry are much greater than previously reported under the Act’s Greenhouse Gas Reporting Program (see ELM’s recent methane emission studies coverage here). Under the Greenhouse Gas Reporting Program, owners and operators of facilities that contain petroleum and natural gas systems and emit 25,000 metric tons or more of GHGs per year are required to report GHG data to the EPA. Therefore, an important component of the Rule includes updates to the Greenhouse Gas Reporting Program that are designed to assist the regulated community in implementing the finalized Clean Air Act methane standards. For example, the Rule includes the use of advanced technology, such as satellite data, to identify super-emitters and to quantify large emission events to ensure more complete and accurate reporting based on empirical data.
The Rule also creates a Super-Emitter Program to help detect large methane leaks and requires owners and operators to quantify and report the emissions detected from these releases. These updated reporting requirements are also a critical component of the Waste Emissions Charge established under the Act’s Methane Emissions Reduction Program and will serve as a basis for implementing the Waste Emission Charge. The Waste Emissions Charge requires oil and gas operators to clean up methane emissions or pay a charge for their excess pollution. Notably, the Waste Emission Charge starts at $900/tonne for 2024 reported methane emissions, increasing to $1,200/tonne for 2025 emissions, and $1,500/tonne for emissions years 2026 and later.
Going forward, the EPA will also solicit additional information this summer on how to incorporate new data, including from satellites and other advanced measurement technologies, into potential future revisions to the Methane Emission Reduction Program. In addition, the EPA will also conduct public engagements to learn about technological advances for measurement and detection technologies as well as their appropriateness for use in regulatory reporting programs.
