The plan offers some clues about how EPA may proceed with regulation of oil and gas related methane emissions, but many of the key details regarding the scope and requirements of these regulations are left unanswered. The strategy specifically mentions two sections of the CAA that EPA is considering using to regulate methane emissions. The first, Section 111 (New Source Performance Standards) gives EPA the authority to set emissions standards for new and modified stationary sources of emissions within a particular industrial category. Key to understanding the impact of any methane New Source Performance Standards is to what stationary sources in the oil and gas industry these standards would apply. Oil and gas wells seem to be a likely target for methane New Source Performance Standards; however, EPA could take a more expansive approach and promulgate standards for other segments of the oil and gas industry, such as pipelines, storage facilities, or refineries. If such standards are issued, it could lead to the required use of well-completion technologies, measures to prevent venting and flaring of methane, or enhanced technologies to detect and prevent leaks. It is worth noting that since natural gas is a valuable commodity, higher rates of capture could help offset some of the costs of compliance with any regulations.
The second section of the CAA put forth as a potential route for CAA regulation of methane is Section 182. This section gives EPA authority to require enhanced pollution prevention measures for areas of the country that are in nonattainment of ozone pollution standards. This section gives EPA the authority to issue Control Techniques Guidelines (“CTG”), which are documents that provide states with EPA’s technical recommendations on how to control Volatile Organic Compound (“VOC”) emissions from a specific type of product or category of emissions sources. While reductions in VOC emissions from oil and gas installations often results in a reduction in methane emissions too, it is unclear how EPA would use this section of the CAA to substantially reduce methane emissions from the oil and gas sector. This is due to the fact that these regulations would only apply in areas of the country that are in nonattainment for ozone pollution, a relatively small portion of the country.
The administration’s focus on methane emissions is not surprising and the Strategy to Reduce Methane Emissions provides valuable, if limited, insight into how the administration intends to reduce methane emissions through executive action during the remainder of Barack Obama’s presidency. While the strategy indicates that the administration will take a relatively modest and collaborative approach to reducing emissions from landfills, coal mines and agriculture, the oil and gas industry very well could be subject to new methane emissions regulations by 2016, at the latest.
