Oil and Gas Industry Concerned about EPA’s Proposed Methane Emissions Rules

Environmental Update

Client Alert

On August 18, 2015, the EPA released proposed rules aimed at reducing methane and other volatile organic compound (VOC) emissions in the oil and natural gas industry. In January 2015, the EPA stated its goal to decrease methane emissions from the oil and gas industry by nearly 45% by the year 2025. These proposed changes appear to be a lofty step toward achieving the administration’s goal.

The rules would amend new source performance standards (NSPS) to expand standards for equipment, processes, and activities relevant to companies in the oil and natural gas industry. For example, the rules would expand the NSPS by regulating methane and VOCs in the following categories, not contemplated by the current rules: pneumatic pumps, hydraulically fractured oil well completions, and fugitive emissions from compressor stations or well sites. Furthermore, it would expand the NSPS by regulating methane emissions for the following categories, currently regulated only as to VOCs: hydraulically fractured gas well completions and equipment leaks at plants that process natural gas. Ultimately, the rules endeavor to empower the EPA to regulate equipment not covered or contemplated by the current rules.

It is important to note that the EPA’s proposed best system of emission reduction (BSER) in the new rules is the same for methane emissions and VOC emissions. Therefore, for those clients who have already complied with EPA rules for VOC emissions that the proposed rules expanded to include methane emissions, no changes would be required. Also helpful for several of the would-be newly regulated categories, the EPA has promulgated summaries of the proposed requirements. These summaries include those for natural gas well sites, oil well sites, natural gas production gathering and boosting stations, gas processing plants, and natural gas transmission compressor stations.

The expansive proposal includes a 591-page update to NSPS for new and modified sources of methane and VOC emissions, a 310-page Draft Control Techniques Guideline for existing emissions sources in certain states and areas, and a 54-page Source Determination Rule to clarify permitting requirements in the oil and gas industry.

These emissions standard changes will likely be of interest to the firm’s clients involved in construction, real estate, oil and natural gas, or environmental matters. The EPA accepts written comments for 60 days following the publication of these proposed rules in the Federal Register. Since the proposed rules were published on September 18, 2015, the comment period ends on November 17, 2015. For additional information on how these changes might affect you or to submit comments, please contact the following Bradley Arant attorneys: for Environmental Law issues, Sid Trant, (205) 521-8479, strant@bradley.com; for Construction and Procurement issues, Jim Archibald, (205) 521-8520, jarchibald@bradley.com; for Real Estate issues, Mike Brown, (205) 521-8462, mbrown@bradley.com; and for Governmental Affairs, David Stewart, (205) 521-8368, dstewart@bradley.com.