On August 13, 2020 the U.S. Environmental Protection Agency (EPA) issued two final rules, completing the rollback of Obama-era methane emissions regulations in the New Source Performance Standards (NSPS) for the Oil and Gas Industry. Issued in response to the March 2017 Executive Order on Promoting Energy Independence and Economic Growth, the EPA’s new rules relax methane gas emissions requirements applicable to various segments of the oil and gas industry. Methane, the primary component of natural gas, is a greenhouse gas.
The two rules include policy and technical amendments to the NSPS for the Oil and Gas Industry:
The final policy amendments to the 2012 and 2016 NSPS:
Remove the NSPS requirements for the transmission and storage segment of the oil and gas industry altogether, including rescinding both volatile organic compounds (VOC) and methane emissions standards for transmission and storage sources. This final rule concludes that the oil and natural gas production source category only includes the production and processing segments of the industry. The policy amendments state that under section 111 of the Clean Air Act (CAA), the Obama-era EPA could have listed the transportation and storage segment for regulation only if it first found that emissions from the segment cause or significantly contribute to air pollution that may be reasonably anticipated to endanger public health or welfare. EPA never made such a cause-or-contribute-significantly and endangerment finding, and therefore regulation of the transmission and storage segment under the NSPS is improper.
Rescind the methane emission standards for the production and processing segment of the oil and gas industry. The production and processing segment will still be required to meet smog-forming VOC emissions limits, which EPA contends will also reduce methane emissions, making separate methane requirements unnecessary.
Finalize an interpretation of the CAA section 111 for newly regulating any air pollutant that EPA did not consider when listing or initially regulating a source category. The final rule states that in order to newly regulate such an air pollutant, in this case methane, EPA must make a finding that emissions of that air pollutant from the source category cause or contribute significantly to air pollution which may reasonably be anticipated to endanger public health or welfare.
Lexology, 20 August 2020