The Biden administration released its final rule Dec. 2 on stronger controls for methane from oil and gas production and storage and many processing and pipeline operations.
The Environmental Protection Agency (EPA) exercised its authority under the Clean Air Act to issue rules especially intended to minimize the routine flaring of natural gas and the size and frequency of gas leaks. The EPA will require state implementation plans to cover existing operations as well as new operations. All well sites, centralized production facilities, and compressor stations will have to be routinely monitored for leaks.
Methane is mentioned as the primary subject, but the heightened controls also will reduce emissions from the broader category of volatile organic compounds. Changes to minimize routine flaring will reduce the waste of a valuable resource, one of the factors in EPA’s calculation of net benefits from the new regulations. Minimized flaring also will mean reduced emission of carbon dioxide, the most common greenhouse gas.
While most rule’s focus is on wells and compressor stations, the rule specifies that its regulations go beyond such infrastructure “to the point of custody transfer to the crude oil transmission pipeline,” and to natural gas production, processing, transmission, and storage, up to a “city gate” point of transfer to a local distribution company.
The unveiling of the rule was timed to coincide with the twenty-eighth annual conference of the parties on climate change, or COP28, in Dubai, UAE, under the auspices of the United Nations.
EPA issued an initial proposed rule in 2021 and a supplemental proposal in November 2022 with much stress on reducing greenhouse gas emissions and protecting human health.
Industry associations filed comments in early 2023 warning of what they saw as impractical and overly expensive elements (OGJ Online, Feb. 14, 2023). In response to the final rule, industry groups issued cautious statements saying they would review the complex, 1,690-page rule to determine whether it provides the cost-effectiveness and flexibility they have been advocating.
Changes to the rule
Several changes in the final rule are intended to address the practical issues raised by industry, such as time needed to meet the new standards and to make repairs when needed.
The effective date for compliance at new, modified, and reconstructed operations will be Dec. 6, 2022, but with various qualifiers. For new oil wells, the provisions to minimize flaring of associated gas will be phased in over a 2-year period.
For process controllers—formerly called pneumatic controllers—the standard will be zero emissions, but there will be a 1-year phase-in period.
For existing wells—constructed prior to Dec. 6, 2022—there will be a longer transition. First, states will be given 2 years to submit state implementation plans for existing oil and gas operations, and states generally will be obligated to require compliance no later than 3 years after submission of the plan, which means a transition of as much as 5 years.
Routine flaring will be phased out for most operations while allowances are made for temporary flaring or venting for various reasons, such as safety during emergency work. In recognition of the more difficult cost-benefit balance of small operations, routine flaring will be allowed for a subcategory of wells emitting no more than 40 tons/year of methane.
There will be a “super emitter” program for large leaks, which will require operators notified of a leak detection to investigate and make repairs to meet EPA standards. Third parties will be allowed to report large leaks to EPA. To maintain quality control, EPA will have to certify third parties for that kind of work and will evaluate the data that third parties provide—an oversight role to keep the federal agency in control of enforcing federal standards.