EPA unveils plan on controls of greenhouse gases and VOCs from oil and gas upstream

Nov. 15, 2021

The Biden administration released a proposed rule Nov. 2 to increase controls on emissions of methane and other greenhouse gases and volatile organic compounds (VOCs) from new oil and gas exploration and production operations and associated storage and transportation.

The 577-page proposal from the Environmental Protection Agency (EPA) is first of all a strengthening and refinement of new source performance standards (NSPSs) issued by the Obama administration, standards that have been tied up in litigation or temporarily supplanted by Trump administration regulations.

The proposal also is meant to pave the way for nationwide controls on emissions of greenhouse gases and VOCs from existing oil and gas operations. EPA says it will set guidelines and require states to submit plans for controlling those emissions.

With a former state regulator, Michael Regan, now EPA administrator, it may not surprise people to see that the strategy for existing sources puts an emphasis on wanting state plans, albeit plans that meet federal guidelines.

The timing of the proposal’s release allowed President Biden to announce it in Glasgow, Scotland, at the 26th United Nations Conference of the Parties on climate change, or COP26. The EPA document and associated statements stress climate concerns extensively.

The proposed rule, not yet published in the Federal Register, calls attention to the well-known points of concern that have been discussed for years, notably venting, flaring, and fugitive emissions of natural gas from production sites; emissions during routine maintenance and system upsets; releases from pneumatic pumps; and monitoring (leak detection) strategies.

Industry cautious

An early reaction from the Independent Petroleum Association of America (IPAA) sounded cautiously optimistic about the new plan.

“IPAA is encouraged by its initial analysis of EPA’s proposed regulations—the agency has tried to be responsive to our concerns for improved cost-effective monitoring technology and recognizing the importance of addressing small business challenges,” said Barry Russell, IPAA president, in a Nov. 2 statement.

Russell added that IPAA will be reviewing the big document and awaiting the findings of an Energy Department study on marginal well emissions that will be completed ahead of the EPA’s comment deadline.

Frank Macchiarola, a senior vice-president at the American Petroleum Institute, issued a statement saying EPA “has released a sweeping proposal, and we look forward to reviewing it in its entirety. We will continue working with the agency to help shape a final rule that is effective, feasible and designed to encourage further innovation.”

Comments and costs

EPA is asking comments to be submitted within 60 days of the proposal’s publication in the Federal Register.

Monitoring was one of the points of contention in the Obama administration’s regulations, given the cost of infrared monitoring surveys to detect methane leaks. The new proposal includes a variety of quarterly and semiannual requirements for leak detection, depending on the type of site.

EPA says it “is seeking comment and information on alternative measurement technologies, which we are proposing to allow in the rule. We have heard strong interest from various stakeholders on employing new tools for methane identification and quantification.”

The agency’s regulatory impact analysis estimates the value of cumulative net climate benefits from the proposed rule is equivalent to about $4.5 billion a year from 2023 to 2035. EPA said the estimate uses a “social cost” of greenhouse gases and represents the monetary value of avoided climate damages associated with a decrease in emissions of greenhouse gases.

EPA also says it is requesting public comments and information to help it evaluate opportunities to achieve additional pollution reductions. The additional input is intended to help EPA issue a supplemental proposal in 2022 that may address ways to mitigate methane from abandoned wells, measures to reduce emissions from pipeline pigging operations and tanker truck loading operations, and better standards for control devices.