EPA Proposes New Standards To Reduce Methane Emissions From Oil & Gas Operations

The U.S. Environmental Protection Agency Tuesday announced proposed standards to reduce emissions of greenhouse gases and volatile organic compounds from the oil and natural gas industry.

The proposal is a part of the Administration’s strategy under President Obama’s Climate Action Plan to cut methane emissions from the oil and gas sector by 40 to 45 percent from 2012 levels by 2025.

Methane, the key constituent of natural gas, is a potent GHG with a global warming potential more than 25 times greater than that of carbon dioxide. Methane is the second most prevalent greenhouse gas emitted in the United States from human activities, and nearly 30 percent of those emissions come from oil production and the production, transmission and distribution of natural gas.

“Today, through our cost-effective proposed standards, we are underscoring our commitment to reducing the pollution fueling climate change and protecting public health while supporting responsible energy development, transparency and accountability,” said EPA Administrator Gina McCarthy. “Cleaner-burning energy sources like natural gas are key compliance options for our Clean Power Plan and we are committed to ensuring safe and responsible production that supports a robust clean energy economy.”

The proposed standards for new and modified sources are expected to reduce 340,000 to 400,000 short tons of methane in 2025, the equivalent of reducing 7.7 to 9 million metric tons of carbon dioxide.

EPA estimates the rule will yield net climate benefits of $120 to $150 million in 2025. Those standards are also expected to reduce 170,000 to 180,000 tons of ozone-forming VOCs in 2025, along with 1,900 to 2,500 tons of air toxics, such as benzene, toluene, ethylbenzene and xylene.

Ozone is linked to a variety of serious public health effects, including reduced lung function, asthma attacks, asthma development, emergency room visits and hospital admissions, and early death from respiratory and cardiovascular causes. Air toxics include chemicals that are known or suspected to cause cancer and other serious health effects.

The proposed standards will complement voluntary efforts, including EPA’s Methane Challenge Program, and are based on practices and technology currently used by industry. To cut methane and VOC emissions, the proposal requires:

— Finding and repairing leaks;

— Capturing natural gas from the completion of hydraulically fractured oil wells;

— Limiting emissions from new and modified pneumatic pumps; and

— Limiting emissions from several types of equipment used at natural gas transmission compressor stations, including compressors and pneumatic controllers.

EPA’s Methane Challenge Program that was proposed earlier this year expands on the successful Natural Gas STAR Program, which serves as a platform for companies who want to make an ambitious and transparent commitments to address methane emissions.

This flexible program has the potential to foster significant cost-effective emission reductions across the oil and gas sector and to provide transparency on the progress partner companies are making to reduce emissions.

As part of the proposal announced today, the agency is updating the 2012 New Source Performance Standards to address methane as well as VOC emissions for sources covered in that rule.

EPA’s proposal would also require that industry reduce VOC and methane emissions from hydraulically fractured and refractured oil wells, which can contain significant amounts of natural gas along with oil.

In addition, the proposal means methane and VOC reductions “downstream” from wells and production sites, covering equipment in the natural gas transmission segment of the industry that was not regulated in the agency’s 2012 oil and natural gas rules.

Additionally, the agency proposes to clarify and streamline Clean Air Act permitting requirements in states and Indian country.

The proposal includes proposed guidelines for states to reduce VOC emissions from existing oil and gas sources in certain ozone nonattainment areas as well as mid-Atlantic and Northeast states, like Pennsylvania, that are part of the Ozone Transport Region.

EPA will take comment on the proposals for 60 days after they are published in the Federal Register. The agency will hold public hearings and will announce details soon.

DEP/PA Industry Reaction

The Department of Environmental Protection said it would review the proposal and look at what other gas-producing states are doing.

“We are working to develop a robust approach to limiting methane emissions in Pennsylvania,” said DEP Secretary John Quigley. “DEP has compiled data on methane emissions and has started research into possible methods of identifying sources of methane emissions from abandoned oil and gas wells, among other sources.”
“It cannot be lost on anyone that shale-related methane emissions continue to steeply drop as natural gas production sharply climbs,” said Dave Spigelmyer, president of the Marcellus Shale Coalition. “These positive results are a function of the industry's widespread use of operational best practices and continuous investments aimed at protecting and enhancing our environment, especially air quality.”

For more information, visit EPA’s Regulatory Actions webpage.

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