The EPA has proposed updates to the prior administration's national standards for the oil and natural gas industry.
The proposal would remove regulatory duplication and save the industry millions of dollars in compliance costs each year, while maintaining health and environmental regulations on oil and gas sources that the agency considers appropriate.
The new proposal is the result of EPA's review of the 2016 New Source Performance Standards (NSPS) for the oil and natural gas industry, which was conducted in response to President Trump's Executive Order 13783 -- Promoting Energy Independence and Economic Growth. That order directs agencies to review existing regulations that potentially "burden the development or use of domestically produced energy resources," including oil and natural gas.
EPA's regulatory impact analysis estimates the proposed amendments would save the oil and natural gas industry $17 million-$19 million a year, for a total of $97 million-$123 million from 2019 through 2025.
"EPA's proposal delivers on President Trump's executive order and removes unnecessary and duplicative regulatory burdens from the oil and gas industry," said EPA Administrator Andrew Wheeler. "The Trump administration recognizes that methane is valuable, and the industry has an incentive to minimize leaks and maximize its use. Since 1990, natural gas production in the United States has almost doubled, while methane emissions across the natural gas industry have fallen by nearly 15 percent. Our regulations should not stifle this innovation and progress."
EPA is co-proposing two actions, both of which would remove unnecessary regulatory duplication in the 2016 rule. In its primary proposal, the agency would remove sources in the transmission and storage segment of the oil and gas industry from regulation. The primary proposal would also rescind emissions limits for methane from the production and processing segments of the industry but would keep emissions limits for ozone-forming VOCs. The controls to reduce VOC emissions also reduce methane at the same time, so separate methane limitations for that segment of the industry would be redundant.
In an alternative proposal, EPA would rescind the methane emissions limitations without removing from regulation any sources from the transmission and storage segment of the industry. This proposal is in addition to a September 2018 technical action that proposed targeted improvements to help streamline implementation, reduce duplication of EPA and state requirements, and significantly decrease unnecessary burdens on domestic energy producers.
In response to EPA's draft revisions to the NSPS for the oil and gas sector, Independent Petroleum Association of America (IPAA) Executive Vice President Lee Fuller said, "IPAA endorses the change because it would be far more cost-effective with regard to the breadth of emissions sources. IPAA has consistently believed and recommended that a VOC-based program is an appropriate pathway for regulating natural gas and oil production emissions. American producers are committed to managing their greenhouse gas emissions and continue to invest in the development of new technologies to mitigate and reduce emissions. These actions have and will continue to reduce methane emissions from natural gas and oil production operations."
API issued a similar endorsement: "The oil and natural gas industry is laser-focused on cutting methane emissions through industry initiatives, smart regulations, new technologies and best practices," said API Vice President of Upstream and Industry Operations Erik Milito. "We welcome smart regulations that protect public health and the environment, and provide the flexibility to develop and deliver affordable and reliable American energy.
"We support EPA's efforts to adhere to its statutory obligations under the Clean Air Act. Under this proposal, the oil and natural gas sector will continue to be effectively regulated. The regulation of volatile organic compounds drives down methane emissions and allows for innovation and technological advancements that help environmental performance and strengthen industry's actions to reduce emissions."
According to API, U.S. methane emissions are down even as Americans produce more affordable, reliable and cleaner natural gas. In the Permian Basin, production surged 100 percent from 2011 to 2017, but methane emissions relative to production fell nearly 40 percent. Industry initiatives, including efforts like The Environmental Partnership, underscore the industry's commitment to leveraging new technologies and innovative practices that reduce emissions and establish clear pathways for continuous environmental improvement.
For more information, visit www.epa.gov, www.ipaa.org or www.api.org.
