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EPA’s Methane Testing and Inspection Performance Standards Final Rule
As our members know all too well, actions by the Environmental Protection Agency (EPA) that impact oil and gas operations in the United States, very much impact operations in the Permian Basin and are closely tracked by PBPA. Indeed, for the past three years, PBPA has been engaged with, and closely monitoring, the EPA’s multiple regulatory proposals regarding operations in the oil and gas industry. Among our greatest concerns have been the regulations focused on methane.
On Saturday, December 2, 2023, the EPA announced a regulatory rulemaking package intended to reduce and, to the maximum extent possible, eliminate emissions from oil and natural gas operations and delivery systems in the U.S. Specifically, EPA released a pre-publication version of the final Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources: Oil and Natural Gas Sector Climate Review.
However, as of December 20, the rules package had yet to be formally published in the Federal Register (we could see this happen in January), leaving an incomplete picture for the public of the full regulatory impact of the package. This is because several supporting documents related to the rule have yet to be released.
The methane rule is comprised of four separate elements proposed under sections 111(b) and 111(d) of the Clean Air Act (CAA). Those statutory provisions are the basis for EPA’s authority to regulate emissions of volatile organic compounds (VOCs) and methane from oil and natural gas facilities under 40 C.F.R. Part 60 Subparts OOOO and OOOOa.
The key components of the rule:
First, EPA will regulate oil and natural gas facilities constructed, modified, or reconstructed after December 6, 2022, under a new Subpart OOOOb. The requirements in OOOOb will apply to affected facilities 60 days after the rule is published in the Federal Register.
Second, under a new Subpart OOOOc, EPA finalized emissions guidelines that are intended to inform states in the development, submittal, and implementation of state plans to establish standards of performance for greenhouse gases (in the form of limitations on methane) from sources existing on or before December 6, 2022.
States and tribes must submit plans to EPA for review within 24 months of the publication of the final rule in the Federal Register, with a compliance deadline for existing sources that is no later than 36 months after the deadline to submit the plan to EPA.
Third, the Final Rule amends OOOOa in response to Congress’ June 2021 revocation of regulatory amendments made by EPA under the Trump administration.
Fourth, the Final Rule also includes an “Appendix K,” a protocol for determining leaks using Optical Gas Imaging (OGI) that EPA now requires at natural gas processing plants regulated by OOOOb or OOOOc.
The Final Rule comes more than two years after EPA published its initial proposal on November 15, 2021 – which included only explanatory, not actual regulatory, text and a “supplemental” proposal on December 6, 2022. According to EPA, the agency received over one million comments on the Proposals.
While PBPA continues our review of the nearly 1,700-page rule and is in favor of effective and efficient regulation of emissions with beneficial results, our initial sense is the new OOOOb/c follows the harmful contours and effects of the proposed rule. It is yet another example of the draconian approach to methane emissions which reflects the Biden Administration’s continued use of the bureaucracy to weaponize the federal regulatory process against oil and gas.
This looming regulatory morass of complex mandates and requirements regarding methane emissions from every operator no matter the size, type of operation, or location of operation – with little or no measurable benefit to the environment – will bring costly burdens throughout the energy production and delivery system in such a way as to all but guarantee a loss of jobs, increased prices to consumers, expanded dependence on foreign energy sources, further upward pressures on inflation, with a decreased reliability for power delivery in this country.
For a more detailed analysis of some of the issues in the Final Rule that have initially caught PBPA’s attention, please reach out to Stephen Robertson (stephen@pbpa.info).
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