EPA Finalizes Landmark Rules Targeting Methane Emissions from New and Modified Facilities

On May 12, 2016, the U.S. Environmental Protection Agency (EPA) finalized new regulations that directly target methane emissions from the oil and natural gas sector. The new rules, which were the subject of more than 900,000 comments, cover new and modified oil and gas facilities and are a key component of the Obama administration’s climate change strategy to reduce methane emissions from the oil and gas sector by 40 to 45 percent from 2012 levels by 2025. Environmental groups are pushing for the issuance of rules covering existing facilities before the end of the Obama administration.  

Key aspects of the rule include emissions limits for methane and requirements to find and repair leaks. Sources covered include new and modified oil and natural gas well sites, production gathering and boosting stations, natural gas compressor stations (transmission and storage) and natural gas processing plants. In a change from the rules as originally proposed, the regulations will cover low-producing wells and include more frequent site inspections. The rules will become effective 60 days after publication in the Federal Register. A pre-publication version of the rules is available at https://www3.epa.gov/airquality/oilandgas/may2016/nsps-finalrule.pdf.

In tandem with the newly-released rules, the EPA has also published a proposed information collection request that would be used by the agency to formulate rules limiting methane emissions from existing oil and gas facilities, a move which would significantly expand covered sources and subject the oil and gas industry to increased costs at the same time that the industry is facing difficult market conditions.