15 April, 2016

Update on Air Emission Regulations Affecting the Oil and Gas Industry

President Obama praised the industry's success in delivering more energy while reducing emissions but plans another costly regulation


In January the President announced additional regulations that are intended to help reduce oil and gas industry methane emissions 40 to 45 percent from 2012 levels by 2025.

The good news is that the regulation cannot take effect before President Obama leaves office.

In January the President announced additional actions to help reduce oil and gas industry methane emissions 40 to 45 percent from 2012 levels by 2025. In the same announcement, the President acknowledged that the industry’s methane emissions are down 16 percent from 1990 levels — oil production is up 28 percent and natural gas production is up 52 percent since 1990, which we know is no small feat.

The tally of recently implemented or announced air emission regulations affecting the oil and gas industry, prior to the January announcement:

  • Low-emission or green completions required for gas wells by 2015. (Environmental Protection Agency, EPA)
  • EPA reduced ozone standards to 70 parts per billion in 2015. EPA published separate guidelines for reducing emissions from oil and gas operations in non-attainment areas.
  • The Clean Power Plan (EPA) efforts to cut greenhouse gas emissions target natural gas-fired as well as coal-fired power generation. (The Supreme Court stayed implementation of the rule in February.)
  • The Bureau of Land Management (BLM) 2015 hydraulic fracturing rule. (The U.S. District Court for Wyoming is blocking enforcement of the rule.)
  • BLM “waste reduction” rule that would severely restrict methane venting and flaring is open for comment until April 22.
  • Methane and VOC requirements for additional new and modified sources in the oil and gas industry (proposed August 2015).
  • Now the President’s proposes to regulating methane and VOC from existing oil and natural gas facilities — including wells, gathering lines, processing facilities, transmission and storage facilities.

The good news: The newest proposed rule will, by EPA’s own admission, not be completed during the Obama Administration.

As the first step, EPA announced that they will issue an Information Collection Request (ICR) to collect "data on existing sources of methane emissions, technologies to reduce those emissions and the costs of those technologies in the production, gathering, processing, and transmission and storage segments of the oil and gas sector."

The procedural review of the ICR that is required by Paperwork Reduction Act of 1995 (designed to reduce the burden of government paperwork on businesses and individuals) will significantly delay and limit the size of the data collection.

However, new data on facility emissions is certainly needed. The EPA bases its oil and gas equipment emission factors, in part, on emissions from oil and gas equipment gathered by the Gas Research Institute, GRI, in 1992.

In addition, there were almost no systematic field monitoring studies published before 2012, and the relatively small number of new studies tends to produce more questions than answers.