Carbon dioxide, by far the most ubiquitous greenhouse gas (GHG) by volume, has long been the primary target of regulatory efforts to limit GHG emissions. The most significant climate change regulations over the past decade have focused squarely on reducing carbon dioxide emissions, with reductions in other GHGs addressed secondarily or not at all. However, with the dramatic increase in the drilling for and use of methane for electricity generation (an increase driven, in part, by the lower carbon dioxide emissions from the combustion of natural gas compared to other fossil fuels), methane emissions – especially from the oil and gas industry – have found themselves in the crosshairs of regulators at both the federal and state levels.
Methane is a far more potent GHG than carbon dioxide on a per unit basis. However, because the total annual global emissions of carbon dioxide dwarf those of methane, lawmakers and regulators have historically focused their regulatory efforts on limiting CO2 emissions, which is undoubtedly a greater contributor to global climate change. But, the increased usage and extraction of methane brought about by the fracking boom, and the currently stalled efforts to nationally regulate carbon dioxide emissions from power plants after the Supreme Court’s stay of EPA’s Clean Power Plan, have reoriented climate change regulatory efforts to focus heavily on limiting methane emissions.
At the federal level, the clearest sign of this shift is EPA’s newly released standards limiting methane emissions from new oil and gas wells. This regulation, the first such standards directly restricting methane emissions from any industrial sector, limits methane emissions from new and heavily modified oil and gas drilling operations and associated equipment and are part of the Obama administration’s goal of cutting methane emissions from the oil and gas sector by 40 to 45 percent from 2012 levels by 2025. Taking this action paves the way for EPA to issue similar rules for existing oil and gas drilling operations, a rule that would have far broader impacts and scope. Although EPA is currently collecting information from existing oil and gas operations to support the creation of such regulations, any methane regulations applicable to existing oil and gas operations would be left to the next presidential administration.
In addition to EPA’s actions, the federal Bureau of Land Management (BLM) has proposed regulations restricting the venting, flaring and leaking of natural gas in oil and gas production activities on federal lands. If enacted, this proposed rule would prohibit the venting of natural gas under most circumstances, and would set increasingly stringent limits on the rate of flaring from individual wells. Operators could comply with these limits through the installation of gas capture technology or by reducing production until appropriate capture technology can be added to the well. The proposed rule would also require biannual leak testing and repair.
Like the federal government, states have also turned their regulatory attention to methane emissions. Following the Aliso Canyon disaster in California, which released an estimated 94,500 tons of methane into the air (the equivalent of the annual GHG emissions from 572,000 passenger cars), the California Air Resources Board has proposed a rule that would require all oil and gas extraction and storage facilities to test for and control methane leaks. The proposed rule would require facilities to test quarterly for leaks and then address these leaks through a variety of approved methods and technologies. The proposed rule would also place restrictions on the flaring of natural gas. Similarly, several other states including Ohio, Pennsylvania, North Dakota, and Colorado have implemented or proposed rules targeting methane emissions from the oil and gas industry.
A common thread linking almost all of the efforts to limit methane emissions is that they target oil and gas production, processing and storage. For political and practical reasons, it is unlikely that future methane emission regulations will wander much beyond the oil and gas sector. Other large sectors of methane emissions such as natural gas distribution systems and agriculture are prohibitively expensive to address on a large scale and have politically powerful constituencies that are able to resist meaningful regulation.
Does this trend of increased regulatory focus on methane emissions signal a shift in climate change policy away from CO2 emissions? Over the long-term, such a shift is unlikely. Given the vastly larger number of carbon emitting sources and industries, and the dominant role that carbon dioxide plays in driving climate change, the focus of efforts to combat climate change will almost certainly remain primarily on limiting carbon dioxide emissions. However, in the short term, methane emissions are likely to remain an area of significant interest for regulators, particularly in states with active oil and gas production operations.
Adam Riedel is an attorney in the Washington, D.C., office of Manatt, Phelps & Phillips. His practice focuses on the resolution of environmental enforcement matters, compliance counseling, climate change regulation, and the management and resolution of environmental issues in transactional contexts. Prior to beginning his career as an attorney, Mr. Riedel served as a staff member for a member of Congress where, among other duties, he advised on environmental and energy issues. He can be reached at 202-585-6522 or email@example.com.
This column is part of a series of articles by law firm Manatt, Phelps & Phillips, LLP’s Energy, Environment & Natural Resources practice. Earlier columns in the sixth edition of this series discussed EPA’s Chemical Data Reporting Rule, California’s Global Warming Solutions Act, Evaluating Traffic Impacts of Projects, California Water Bond Funding and Export of US Crude Oil.