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EPA Reconsidering Methane Rules Covering Oil and Gas Industry

The U.S. Environmental Protection Agency (EPA) announced Wednesday that it will reconsider proposed rules governing new sources of methane emissions from the oil and natural gas industry, and it said it would delay by three months a compliance deadline for the rules.

The move comes less than two weeks after the Trump administration asked an appellate court to delay a series of lawsuits over three final rules -- collectively updates to the New Source Performance Standards (NSPS) that are designed to reduce methane, volatile organic compounds (VOC) and toxic air pollutants -- that EPA unveiled in May 2016, during the Obama administration.

An executive order (EO) issued by Trump on March 28 includes a directive for EPA to immediately review regulations on energy sources, and then to either suspend, revise or rescind them.

"EPA is continuing to follow through with President Trump's Energy Independence EO," said EPA Administrator Scott Pruitt. "American businesses should have the opportunity to review new requirements, assess economic impacts and report back, before those new requirements are finalized."

EPA said it will stay a June 3 compliance date for the rules for 90 days. In the interim, the agency will take public comments on the matter. EPA sent a two-page letter, which was signed by Pruitt, to petitioners that objected to the rules, including the American Petroleum Institute (API), the Texas Oil and Gas Association and the GPA Midstream Association.

According to Pruitt, the petitioners "raised at least one objection to the fugitive emissions monitoring requirements included in the final rule that arose after the comment period or was impracticable to raise during the comment period, and that is of central relevance" under rules governing the federal Clean Air Act.

"Among the issues raised...are objections regarding the provisions for requesting and receiving alternative means of emissions limitations and the inclusion of low-production wells," Pruitt wrote. "These provisions, or certain aspects of these provisions, were not included in the proposed rule so the public could not have raised objections to these provisions during the public comment period."

On April 7, Acting Assistant Attorney General Jeffrey Wood asked the U.S. District Court of Appeals for the District of Columbia Circuit to hold the lead case in the dispute, API et al v. EPA et al, No. 13-1108, in abeyance until 30 days after the EPA completed the review called for in the EO. Thirteen states, API and several other industry groups oppose the rules, while at least nine states and a coalition of environmental groups is in support.

Under the EO, Pruitt has 45 days to submit a review plan to the White House's Office of Management and Budget. A draft report on the EPA's actions is due within 120 days of the EO being enacted, and a final report is due within 180 days.

The rules were designed to help meet a goal by the Obama administration to slash by 2025 methane emissions from the oil and gas sector by 40-45% from 2012 levels.

EPA built NSPS upon VOC emission reduction requirements for new oil and gas wells that the agency first unveiledin April 2012. Those requirements called for a two-phase process to reduce VOCs: requiring flaring followed by "green completions," a term that means deploying equipment to capture and sell natural gas emissions that are otherwise lost.

EPA previously said it expected NSPS to reduce 510,000 short tons of methane in 2025, which is the equivalent of reducing 11 million metric tons of carbon dioxide. The rules were also expected to reduce other pollutants, including 210,000 tons of VOCs and 3,900 tons of air toxics, by 2025.

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