EPA final methane emissions rule broadens limits to low-producing wells

The US Environmental Protection Agency issued a final rule designed to limit methane emissions from new US oil and gas wells and storage tanks on May 12 that also expands restrictions to wells producing fewer than 15 b/d.

The US Environmental Protection Agency issued a final rule designed to limit methane emissions from new US oil and gas wells and storage tanks on May 12 that also expands restrictions to wells producing fewer than 15 b/d.

“These new rules will cripple stripper and marginal well owners and operators, and on top of historically low oil prices, we are looking at total disaster,” National Stripper Well Association (NSWA) Chair Darlene Wallace immediately responded.

Other oil and gas associations and their top officials were equally critical. EPA’s own statistics show US gas producers reduced emissions 15% since 1990 as production increased by more than 35%, the Natural Gas Supply Association said in a May 12 statement. “Unfortunately, these improvements and innovations could be stifled by regulations that force a cookie-cutter, inefficient, and costly approach,” it warned.

“It doesn’t make sense that the administration would add unreasonable and overly burdensome regulations when the industry is already leading the way in reducing methane emissions,” API Vice-Pres. of Regulatory and Economic Policy Kyle Isakower said. “Imposing a one-size-fits-all scheme on the industry could actually stifle innovation and discourage investments in new technologies that could serve to further reduce emissions.”

Independent Petroleum Association of America Executive Vice-Pres. Lee O. Fuller also cited the industry’s reduced methane emissions during a period when domestic production rose dramatically. “In light of this, parts of the EPA’s final rules appear to remove flexibilities for producers and could actually undermine industry’s progress,” he said on May 12.

“In particular, the fugitive emissions program largely locks in costly, hand-picked monitoring technologies and suppresses the development of other approaches that could be more cost-effective and efficient,” Fuller continued. “Significantly, the new monitoring program will now force this costly, ineffective fugitive emissions requirement to be perpetual—even when the wells become marginal producers.”

Severe financial stress

In Oklahoma City, NSWA’s Wallace noted that US President Barack Obama has committed the US to be “fossil-fuel free” by 2100, and made reaching that goal a top priority. But the administration’s focus would impose costly requirements when crude oil prices are badly depressed and small producers are under severe financial stress, she said.

NSWA fought for an exemption from the rules for its members, but EPA decided to eliminate it instead, Wallace said. “This plan is a direct attack on small producers with massive costs to the states and industry in exchange for little or no reduction in methane emissions,” she maintained. “Instead of finding ways to harm working Americans, the president should focus on supporting domestic industry and energy production, which create jobs.”

Other trade association officials responded cautiously.

Interstate Natural Gas Association of America Pres. Donald F. Santa said that while INGAA was disappointed with EPA’s decision to regulate methane emissions from new and modified facilities, it was pleased that the agency listened to the group’s concerns about the time frame for repairs at compressor stations.

“INGAA in its comments had argued that EPA’s proposed highly prescriptive repair criteria would have resulted in added methane emissions and decreased service reliability,” Santa said on May 12. “Still, we must review the 600-page final rule closely to determine whether, in practice, EPA’s changes to the proposed rule will effectively minimize the adverse consequences that concerned INGAA’s members.”

The final rule recognized ongoing work by gas utilities to curb methane emissions by not including distribution infrastructure or assets operated by local distribution companies in their service territories, the American Gas Association said in a statement.

EPA’s 2016 US greenhouse gas inventory showed gas utilities’ methane releases decreased by 74% from 1990 to 2014 following a substantial downward revision for the sector, it noted. This came from utilities’ continued work to replace pipelines no longer fit for service as well as upgrades at metering and regulating stations, AGA said.

Contact Nick Snow at nicks@pennwell.com.

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