The GPA Midstream Association said it opposes efforts by the U.S. Environmental Protection Agency (EPA) to collect a broad range of information from the oil and gas industry under the Clean Air Act (CAA), but that if the plan goes through the agency should streamline certain regulatory programs.
Meanwhile, the American Petroleum Institute (API) announced Wednesday that it has filed a lawsuit against the EPA over the three final rules governing methane emissions from new oil and gas wells the agency released in May (see Daily GPI, May 12).
The EPA also unveiled the first draft of an information collection request (ICR) in May. Under the ICR, oil and gas companies would be legally required to provide information on a broad range of topics, including the potential and actual configuration of emissions controls, and the details and costs associated with their deployment.
The EPA said the ICR was necessary because over the past year, it discovered that methane emissions from existing sources were higher than previously thought. The agency cited several sources, including its Greenhouse Gas Reporting Program (GHGRP), reports by industry organizations, other government studies and academic and industry researchers.
But in a 60-page response to the EPA on Tuesday, the GPA said the ICR should not proceed because the regulatory agency lacks the legal authority to issue rules under Section 111(d) of the CAA over methane emissions from oil and gas sources.
Specifically, the GPA argues that since the EPA has chosen to regulate emissions under Section 112 of the CAA, it may not also do so under Section 111(d). The GPA said the EPA also did not properly issue New Source Performance Standards (NSPS) rules under Section 111(b) of the CAA, which is a prerequisite for any regulations based on Section 111(d).
A coalition of states challenging the EPA's Clean Power Plan in the U.S. Court of Appeals for the District of Columbia Circuit has made a similar argument (see Daily GPI, May 18; Aug. 14, 2015).
"The ICR has no 'practical utility' to EPA, as required by the Paperwork Reduction Act, and should not be issued," the GPA said. "More simply, EPA should not seek to collect this information for regulations it cannot issue as a matter of law."
If the EPA were to move forward with its ICR plans, the GPA said the agency should change some of its regulatory programs and streamline the ICR, both of which could lighten the regulatory cost and burden to the oil and gas industry.
Topping the list of recommended changes, the GPA said the EPA should rescind the GHGRP because it would be gathering duplicative information. The association also argued that the regulatory agency had determined the GHGRP was insufficient in proposing the ICR.
The GPA also wants data provided under the ICR to be covered by the Confidential Information Protection and Statistical Efficiency Act of 2002, and for the EPA to extend the deadline to respond to Part 2 of the ICR by at least 120 days "to reduce unnecessary burdens and improve data quality." The deadline is currently next February, which overlaps with several existing state and federal reporting requirements.
Currently, operators would have 30 days to respond to an operator survey, and 120 days to respond to a more detailed facility survey. The EPA said its goal is to receive data from the operator survey later this year.
Other proposed changes by the GPA include extending the deadline for responses to Part 2 of the ICR, and for the EPA to clarify and revise inconsistent data requests and definitions within the ICR questionnaire. The GPA also wants the EPA to reconsider and revise its assumptions regarding the costs and burdens the ICR poses to the industry.
The midstream industry group has “a long history of working collaboratively with EPA and will work with them on this particular issue to lessen the regulatory burdens and minimize the costs this will have on the midstream industry," said GPA CEO Mark Sutton.
API filed its lawsuit in the U.S. Court of Appeals for the District of Columbia Circuit on Tuesday [No. 16-1270]. The association said it was challenging the EPA for its “failure to adhere to the specific limitations provided by the CAA on the way the agency can develop regulations.”
In a statement Wednesday, API Managing Counsel John Wagner said the oil and gas industry will continue to lead the way in reducing methane emissions, and that the reasoning behind such efforts were twofold: it’s good for the environment and it’s good for business.
"Even as oil and natural gas production has risen dramatically, carbon emissions have fallen, thanks to industry leadership and investment in new technologies,” Wagner said. “Greater use of clean, affordable natural gas has pushed carbon emissions from power generation to their lowest level in more than 20 years.”
When it unveiled the methane rules in May, the EPA revised its estimate for climate benefits in 2025 to $690 million (in 2012 dollars), with the benefits outweighing an estimated $530 million in costs. The agency estimates net climate benefits would total $170 million in 2025.
The three rules, collectively updates to the NSPS, are designed to reduce methane, volatile organic compounds (VOC) and toxic air pollutants. EPA said its actions would help the Obama administration meet its goal of slashing methane emissions from the oil and gas sector by 40-45% from 2012 levels by the year 2025.
The agency said it expects the NSPS would reduce 510,000 short tons of methane in 2025, which is the equivalent of reducing 11 million metric tons of carbon dioxide. The rules are also expected to reduce other pollutants, including 210,000 tons of VOCs and 3,900 tons of air toxics, in the year 2025.