In March of this year, the U.S. Environmental Protection Agency (EPA) Administrator Gina McCarthy described the steps that EPA would be taking to reduce methane emissions from existing oil and gas sources.1 This initiative is the next step in EPA’s program to control methane emissions, following on the heels of its 2015 action to reduce emissions from new and modified sources in the oil and gas sector via new source performance standards (NSPS).
Recently, both the Federal EPA and the Pennsylvania Department of Environmental Protection (DEP) have focused attention on greenhouse gas emissions. This process began after the 2007 case of Massachusetts vs. EPA2, where the U.S. Supreme Court determined that greenhouse gas emissions constituted air pollution that was included within the scope of regulation under the Federal Clean Air Act.3 The actions EPA has taken and plans to take in reliance on that case and other precedent, are set forth in President Obama’s Climate Action Plan, which includes a plan to cut methane emissions from oil and gas operations by 40 to 45 percent by 2025. EPA has now begun its initiative to control methane emissions from existing oil and gas operations.
Pennsylvania has also begun a process to more closely regulate methane emissions from existing oil and gas sources. In announcing the proposed Pennsylvania methane control plan, Pennsylvania Governor Tom Wolf cited figures showing Pennsylvania as the second-largest natural gas producing state and vowed to make Pennsylvania the "national leader" in controlling methane from natural gas production.
The EPA Initiative
Although methane is not included as a criteria pollutant under the Clean Air Act, nor is it listed as a hazardous air pollutant, its potency as a greenhouse gas has been cited by both federal and state governments as justification for more stringent controls from existing sources. The oil and gas industry is responsible for about 25 percent of the methane emissions nationwide.
As a Federal agency, EPA must first comply with the Paperwork Reduction Act4 in order to develop new regulations. This means that it must obtain approval from the Office of Management and Budget before beginning to collect information from the oil and gas industry and the public related to methane gas emissions from the oil and gas sector. As part of this Paperwork Reduction Act process, EPA will draft and submit for public comment an Information Collection Request (ICR). In the ICR, EPA must provide an overview of the proposed information collection process and also estimate the cost and time for the public to respond. That is the next step in a procedure that the District Court for the District of Columbia described as "a complicated but…necessary set of time consuming processes."5
The proposed ICR will outline the types and scope of information EPA will seek from industry representatives. During this process, it is important that industry review and provide comment on the process in its early stages in order to keep the scope of these information requests within reasonable limits. The collection requests can include surveys and require emission monitoring. Once the request is approved by OMB, EPA can begin collecting data from industry representatives, and such representatives will be required to respond and attest that the information they provide is accurate.
In a related initiative, in March 2016, EPA published its best management practices commitment framework for its voluntary natural gas "STAR" Methane Challenge Program. EPA touts this program as a way to comprehensively and transparently reduce emissions and realize significant voluntary reductions in a quick, flexible, cost-effective way.6 This is likely to serve, in part, as a model for what EPA will ultimately propose as federal mandates for control of methane emissions.
It is impossible to know at this point the eventual scope of the new federal regulations of methane emissions from existing oil and gas operations. EPA publications indicate that the proposed federal rules would mandate leak detection and repair, the capture of emissions from well completions, control of emissions from new pneumatic pumps and limits applicable to compressor stations.7
Industry should actively participate in the public notice process regarding any new federal regulations of methane emissions from oil and gas operations and continue to be a voice of reason and restraint to attempt to bring about in an acceptable, cost-effective outcome.
The Pennsylvania Initiative
DEP has traditionally considered oil and gas production facilities as exempt from the plan approval and permitting requirements of the Pennsylvania Air Pollution Control Act. It listed these facilities as "sources of minor significance," thereby allowing them to be exempt from permitting under the state law.8 These exemptions are authorized by the DEP's regulations at 25 PA Code § 127.16.
In its current list of exemptions,9 Exemption No. 38 covers oil and gas exploration, development and production facilities. DEP’s current proposal would eliminate this exemption, and instead, issue a General Permit that such existing oil and gas sources would be required to achieve.
The DEP also proposes to revise its current General Permit (GP-5) covering compressor stations, updating best available technology (BAT) and applying more stringent leak detection and repair to minimize methane leaks. It will also require use of Tier 4 diesel engines to reduce emissions of particulate matter and nitrogen oxides at these facilities.10
The regulations will also cover production, gathering, transmission and distribution lines wherein the DEP will develop best management practices including leak detection and repair programs. As part of this proposal, DEP is also promising to streamline the permitting process to prevent unnecessary delays.
It appears likely that the Pennsylvania process will proceed more rapidly than the federal process, so that there is a risk that the two programs ultimately adopted would not be consistent with each other. Accordingly, close cooperation between the DEP and EPA regulators should be encouraged, so that any DEP requirements would be delayed until EPA finalizes its program. A lack of coordination between the two agencies could result in creating a competitive disadvantage for the Pennsylvania gas industry, as well as imposing excessive or duplicative requirements
EPA and DEP consider methane as a potent greenhouse gas. Even though it has been found to persist in the atmosphere for only about ten years (carbon dioxide, for example, persists for a much longer time), it absorbs more energy than carbon dioxide. The agencies assert that this gives it a high global warming potential. These conclusions, and resulting regulatory actions, should be carefully reviewed and investigated by industry.
Currently, Pennsylvania and many other states are determined to reduce methane by mandating best available technology to control emissions from the oil and gas industry. Industry vigilance in following the regulatory process that is rapidly taking shape, including active, fact-based participation in the process, will help strike a balance between costs to the consumer and to industry, versus potential benefits to the environment. Potential legal challenges should also be considered as the regulatory process continues to develop.
1See EPA Connect, the Official Blog of the EPA Leadership; https://blog.epa.gov/blog/?s=methane
2127 S.Ct. 1438 (2007).
34 USC § 7401- et seq.
444 USCA § 3501- et seq.
5Sierra Club v. EPA, 2011 WL 181097 (D.D.C. 2011) [not reported in F.Supp.2d].
6EPA paper "Reducing Methane Emissions from Oil and Natural Gas Industry," https://www.epa.gov/natural-gas-star-program/methane-challenge-program-best-management-practice-bmp-commitment-framework
7See EPA Connect, the Official Blog of the EPA Leadership; https://blog.epa.gov/blog/?s=methane
835 P.S. § 4001- et seq.
9DEP Document No. 275-2101-003, "Air Quality Permit Exemption," effective July 26, 2003, and effective August 10, 2013 for Category No. 33 and Category No. 38 Exemptions.
10DEP web site, http://www.dep.pa.gov/Business/Air/Pages/Methane-Reduction-Strategy.aspx#.VytKcmTD_cs