Regulatory Tracker

EPA VOC and Methane Standards for Oil and Gas Facilities

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Quick Take

Congress nullified a section of the Trump administration’s rollback of VOC and methane standards regarding transmission and storage facilities along with other operations (the “Review Rule”) in 2021 but left technical standards for Biden’s EPA to address through rulemaking. EPA published its proposed new performance standards and emissions guidelines for new and existing oil and gas facilities on November 15, 2021, and is continuing to consider options and hear comments from stakeholders for a supplemental rulemaking in progress.

Why it Matters

Methane is a powerful greenhouse gas released from oil and gas production, processing, transmission, and storage through equipment leaks, venting, and flaring.

During the Obama administration, EPA set standards for volatile organic compounds (VOCs) and methane emissions for new oil and gas production sources (which included production, processing, transmission, and storage). This was the first rule expressly targeting methane emissions. EPA also issued Control Technique Guidelines to states with moderate nonattainment areas for ozone, requiring them to amend their State Implementation Plans (SIPs) to address VOCs from existing sources via a set of controls that would also reduce methane emissions.

The Trump Administration revoked nearly all of these actions, leaving in place only some of the standards controlling VOCs in new sources. It entirely eliminated methane standards for all segments of the oil and gas industry and left in place some VOC standards only for production and processing facilities. It also rolled back the efforts to develop a rule covering existing sources, having eliminated the legal predicate for doing so. For more information, see our detailed analysis of the final Trump-era rules rescinding methane emissions standards: EPA’s Final Methane Emissions Rules Roll Back Standards and Statutory Authority; and a piece by Ari Sillman, JD 2021, Weighing the Risks of Using the CRA to Restore EPA’s Methane Standards.

The Biden administration and Congress have taken steps to reinstate the Obama-era methane standards for new oil and gas sources, as well as proposed new rules that are broader in scope and stringency for new and existing sources.

Current Status

On Jan. 20, 2021 President Biden signed Executive Order (EO) 13990 instructing the EPA to consider suspending, revising or rescinding the 2020 Policy Rule and to propose a rule for existing sources by September 2021. On June 30th, President Biden signed a Congressional Review Act resolution passed by Congress that revoked the 2020 Policy Rule. EPA published its proposed new performance standards and emissions guidelines for new and existing oil and gas facilities on November 15, 2021. The US also jointly announced a methane reduction pledge with the EU in September 2021, ahead of COP26.

See our recent analysis of EPA’s proposal here and our podcast discussing the proposal here.

Timeline of Events

OBAMA ADMINISTRATION
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Aug. 16, 2012 EPA finalizes New Source Performance Standards (NSPS) for VOC emissions (volatile organic compounds) from new wells and other oil and gas equipment. This rule reduces methane emissions indirectly and does not apply to existing oil wells, which also release VOCs and methane.

Sept. 23, 2013 and Dec. 31, 2014 EPA publishes amendments to the Aug. 16, 2012 NSPS amending and clarifying certain issues related to well completions and storage vessels, among others, and making technical corrections. 78 FR 58416 and 79 FR 79018.

June 3 and Aug. 2, 2016 EPA finalizes New Source Performance Standards (NSPS) for VOC and methane emissions from the oil and gas sector. Additional sources are covered under this rule. Notably, this rule triggers the obligation to regulate methane from existing wells and equipment. Industry petitions EPA to reconsider the rule.

Oct. 27, 2016 EPA publishes final “Control Techniques Guidelines for the Oil and Natural Gas Industry.” The document provides states with moderate ozone nonattainment areas information to help them determine reasonably available control technology (RACT) for VOC emissions. Publishing the guidelines in effect directs these states to amend their State Implementation Plans (SIPs) to address VOCs from existing sources via a set of controls that would reduce methane emissions occurring at those sources using RACT.

Nov. 10, 2016 EPA issues an Information Collection Request (ICR) to operators, asking them to identify ways to control methane from existing oil and gas sources; covered facilities and processes including “onshore production, gathering and boosting, gas processing, transmission, storage, and liquefied natural gas (LNG) import/export.” This is the agency’s first step towards regulating existing oil and gas infrastructure for methane leaks, venting, and flaring.

Jan. 5, 2017 The D.C. Circuit consolidates several challenges to EPA’s rule. American Petroleum Institute v. EPA, Case No. 13-1108 (D.C. Cir.).

TRUMP ADMINISTRATION
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March 1-2, 2017 Eleven states write EPA Administrator Pruitt asking him to cancel the ICR for existing oil and gas sources issued in November 2016 because it is too burdensome for industry. EPA cancels the ICR.

March 28 – April 7, 2017 President Trump issues the Executive Order on Promoting Energy Independence and Economic Growth, directing EPA to reconsider this rule (and many others). In response, EPA announces it is initiating a review of the 2016 NSPS to determine if it needs to initiate additional rulemaking proceedings. 82 FR 16332. EPA moves to suspend the case while it reconsiders the rule.

April 18, 2017 Administrator Pruitt sends a letter to industry representatives, informing them EPA will reconsider at least two parts of the 2016 methane rule: a provision for states to request permission to set alternative emission limits and treatment of low production wells.

May 18, 2017 The D.C. Circuit suspends the case and directs EPA to submit 60-day status reports.

June 5, 2017 EPA publishes a formal grant of reconsideration to reconsider the two provisions referenced in the April 18, 2017 letter as well as two professional engineer certification requirements. EPA delays key provisions of the rule, notably the leak detection and repair (LDAR) requirements, for three months. Environmental groups challenge the reconsideration and delayClean Air Council et al. v. Pruitt, Case No. 17-1145 (D.C. Cir.).

June 16, 2017 EPA proposes to delay key provisions of the methane rule for two years, acknowledging “associated climate and human health benefits” will be foregone as a result. The D.C. Circuit vacates EPA’s three-month delay of the methane rule on July 3, 2017.

June 29, 2017 States send EPA a notice of intent to sue over its failure to establish guidelines for standards of performance for methane emissions from existing oil and natural gas sources.

July 7-13, 2017 EPA asks the court not to require the agency to carry out the rule, at least until EPA can decide whether to ask the full D.C. Circuit to reconsider, or appeal to the Supreme Court. The D.C. Circuit grants a limited stay of 14 days.

July 31, 2017 Environmental groups ask the court to reissue its mandate and direct EPA to implement all provisions of the 2016 rule. The D.C. Circuit rules EPA must enforce the methane rule.

Aug. 28, 2017 Multiple environmental groups announce they will sue EPA over its failure to regulate methane emissions from existing oil and gas infrastructure.

Nov. 8, 2017 EPA issues two Notices of Data Availability to justify the proposed compliance delay of the rule and to solicit comments on certain proposed substantive changes.

March 9, 2018 EPA publishes a notice of proposed withdrawal of Control Techniques Guidance issued on October 27, 2016, which had provided recommendations for reducing VOCs from existing oil and gas sources that relied on data and conclusions made in the June 3, 2016 NSPS rule.

March 12, 2018 EPA publishes a final amendment to the 2016 NSPS rule that allows leaks to go unrepaired during unscheduled or emergency shutdowns.

April 5 and May 29, 2018 Fourteen states, the District of Columbia, and the City of Chicago sue EPA for its failure to regulate emissions from existing oil and gas operations. The suit, brought in the US District Court for the District of Columbia, argues that the Agency violated the Clean Air Act by unreasonably delaying the fulfillment of its mandatory obligation to issue guidelines for controlling methane emissions from existing oil and gas sources. NY v. Wheeler, 1:18-cv-00773 (D.D.C.). Environmental Defense Fund intervenes on behalf of the state plaintiffs.

Oct. 15, 2018 EPA publishes its proposed rule to revise the 2016 oil and gas NSPS. The proposal responds to petitions for reconsideration of the 2016 rule, and loosens requirements imposed by the Obama-era rule regarding fugitive emissions at new sources.

Aug. 29, 2019 EPA releases a proposal to rollback methane regulations finalized in 2016. The proposal rescinds emissions limits for methane on oil and gas production and processing. EPA also includes a proposal to remove transmission and storage from regulation altogether and requests comment on alternative interpretations of EPA’s legal authority to regulate pollutants under section 111(b)(1)(A) of the Clean Air Act. Once published in the federal register, it will be available for public comment for 60 days. A number of larger energy companies urged the administration not to rescind the regulations while smaller operators who have not yet significantly invested in methane reduction are supportive of rescission. This proposal is in addition to the smaller adjustments proposed in Oct. 2018.

July 6, 2020 Plaintiffs in the unreasonable delay lawsuit file a motion to compel EPA to move forward with regulating methane emissions from existing oil and natural gas operations under CAA Section 111(d). NY v. Wheeler, 1:18-cv-00773 (D.D.C.).

August 13, 2020  EPA releases its final rescission and revision of the 2012 and 2016 VOC and methane standards for oil and gas facilities. The two actions, referred to as the Reconsideration Rule and Review Rule, fully rescind VOC and methane standards for transmission and storage and methane standards for all segments, and revise standards for VOC emissions in the production and processing segments. The rule breaks with decades of EPA interpretation of the Clean Air Act to take a stance that could limit the ability of EPA to regulate GHG emissions from any source.

Sep. 14-15, 2020 EPA publishes the Review and Reconsideration Rules in the Federal Register, immediately removing regulatory requirements for the transmission and storage segments of the oil and gas industry (while the Reconsideration Rule will take 60 days to go into effect). A coalition of 24 states and municipalities file suit to challenge the Review Rule, arguing it violates the Clean Air Act. CA v. Wheeler, 20-1357 (DC Cir.). A coalition of environmental groups also sues EPA in the DC Circuit challenging both the Review Rule and the Reconsideration Rule. Consolidated under Environmental Defense Fund, et al v. Andrew Wheeler, et al, Docket No. 20-01359 (D.C. Cir.).

Nov. 13, 2020 The coalition of environmental organizations argues in the D.C. Circuit for review of the Reconsideration Rule. This challenge asks the D.C. Circuit to block EPA’s reduction in leak monitoring frequency. EDF v. Wheeler, No. 20-1360 (D.C. Circuit.

BIDEN ADMINISTRATION
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Jan. 20, 2021 President Biden signs EO 13990 that specifically instructs the EPA to consider suspending, revising or rescinding the Trump era rule for new sources by May 2021. It also instructs the agency to propose a rule for existing sources by September 2021.

Feb. 1-5, 2021  EPA files motions to hold the case challenging the Trump era methane rules in abeyance.  CA v. Wheeler, 20-1357 (DC Cir.); EDF v. Wheeler, 20-01359 (D.C. Cir.). It also files additional motions to hold cases in abeyance for case numbers 20-1360, 20-1364, 20-1367 in the D.C. Circuit.

Feb. 12, 2021 The D.C. Circuit agrees to hold the case brought by states and cities in abeyance and requires EPA to file status reports every 120 days beginning June 14, 2021. California v. Wheeler, No. 20-1357 (D.C. Cir.).

March 25, 2021 Congressional Democrats announce they will propose a resolution of disapproval under the Congressional Review Act for the Review Rule. This would nullify the rule that cut transportation and storage facilities and determined methane was duplicative for the remaining facilities but leave the Reconsideration Rule’s technical amendments on well completions, pneumatic pumps, storage vessels, fugitive emissions, inspections, etc. to the EPA to address through new rulemaking.

April 26, 2021 The U.S. Senate passes the Congressional Review Act resolution disapproving of the Review Rule, sending it to the House.

May 14, 2021 EPA opens a non-rulemaking docket for public input on reducing emissions of methane and other air pollutants from new and existing sources in the oil and natural gas sector.

June 25-30, 2021 The U.S. House votes for a Congressional Resolution Act resolution to revoke the Review Rule, sending the resolution to the President’s desk for signature. President Biden signs the resolution on June 30, 2021.

Sep. 13-15, 2021 OMB receives EPA’s proposed new source rule and proposed methane emissions guidelines for existing oil and gas sources for review.

Sep. 18, 2021 The US and EU jointly announce a pledge to reduce global methane emissions by at least 30 percent from 2020 levels by 2030. The announcement is also an invitation to other countries to join. By Oct. 11, 2021, thirty-two countries had joined.

Nov. 22021 EPA proposes new performance standards and emissions guidelines for new and existing oil and gas facilities. The proposed rule revises performance standards for new and modified oil and gas facilities and includes for the first time, emission guidelines for existing sources. EPA also makes clear that it intends to release a supplemental rulemaking based on additional comments from stakeholders and will finalize the regulations  by the end of 2022.

Dec. 22, 2021 Sixteen Democratic members of Congress write a letter to EPA asking for the final rule to include more rigorous restrictions on flaring and for inspection requirements for smaller well sites.

Jan. 31, 2022 On the last day for comments, 20 GOP lawmakers write a letter to EPA calling for an additional extension of the comment period and criticizing the proposed rule as “devoid of rule text.”

May 6, 2022 Bipartisan lawmakers write a letter to EPA Administrator Reagan urging EPA to adopt a “matrix approach” that allows for flexible implementation of emerging advanced emission detection technologies as an alternative to BSER without waiting for EPA to issue a new rule.

May 20, 2022 The US Government Accountability Office releases a report after reviewing methane emissions from oil and gas development on federal lands, and recommends that EPA provide greater flexibility for operators to use alternative technologies to detect methane emissions. EPA concurred with the recommendations.

June 8, 2022 The US House of Representatives Committee on Science, Space, & Technology holds a hearing on Detecting and Quantifying Methane Emissions from the Oil and Gas Sector to assess the challenge of oil and gas sector leaks and examine research gaps and opportunities for the federal government to support scientific research that will advance innovation to address the issue.

June 14, 2022 The House Select Committee on the Climate Crisis holds a hearing entitled “State Perspectives on Cutting Methane Pollution” featuring the governors of New Mexico and Wyoming.

Aug. 15, 2022 EPA sends its Proposed Supplemental Rule to OMB for inter-agency review. When OMB completes this review, EPA will publish the proposed rule in the Federal Register and seek comments before finalizing the rule.  

Aug. 16, 2022 President Biden signs the Inflation Reduction Act, which creates a backstop methane waste charge for large emitters. This fee applies until and unless all states have EPA-approved state implementation plans for the forthcoming methane rule. Read more about the IRA’s impacts on methane here.

Additional EELP Analysis: