On January 14, 2015, the Obama administration and the Environmental Protection Agency ("EPA") announced plans to propose new standards to control methane emissions from new and modified—but not existing—oil and natural gas production sources. The future regulation is projected to reduce methane emissions by up to 45 percent by 2025, as compared to 2012 levels, and is modeled on a series of peer-reviewed white papers that EPA released last year. EPA is scheduled to issue the proposed regulation in the summer of 2015, with the rule to be finalized by 2016.
After proposing the Clean Power Plan to limit carbon emissions
from existing electric generating units ("EGUs"),
EPA's proposed methane standard will serve as the Agency's
next step in reducing overall
greenhouse gas ("GHG") emissions. EPA estimates that
methane emissions accounted for nearly 10 percent of GHG emissions
in the United States in 2012, while noting that methane possesses
25 times the heat-trapping potential of
carbon dioxide over a 100-year period. Without new measures to
control methane emissions, it is projected that methane emissions
will increase by more than 25 percent by 2025. EPA projects this
increase in methane emissions despite the fact that methane
emissions within the oil and natural gas sector have dropped by 16
percent since 1990, during which time natural gas production has
risen by 37 percent.
The proposed rule will add to the existing portfolio of regulatory
measures that comprise the administration's Climate Action Plan
Strategy to Reduce Methane Emissions. The Climate Action Plan
includes a variety of strategies that are or will be carried out by
various agencies and departments, including EPA, the Departments of
Energy and Transportation, and the Bureau of Land Management. Such
reforms focus on implementing requirements in areas deemed to have
poor air quality, as well as repairing and improving upon different
facets of the oil and natural gas production, processing, and
transmission infrastructure.
EPA intends to propose its future methane standards under §
111(b) of the Clean Air Act ("CAA")—a section under
which methane emissions from oil and natural gas wells have not
previously been regulated. Notably, CAA § 111(d) requires
states to establish standards of performance for any source for
which EPA has adopted New Source Performance Standards
("NSPS") under § 111(b). EPA relied on § 111(d)
to justify its authority to regulate CO2 from existing EGUs when it
promulgated the Clean Power Plan. Thus, it appears that a methane
regulation for new and modified sources could lead to EPA proposing
a subsequent measure to address existing methane sources.
Further information regarding the proposal can be found in our
Jones Day Commentary, "Obama Administration Seeks to Cut Methane
Emissions."
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