The following blog is part one of a two-part series authored by BlueGreen Alliance Associate Policy Advisor Sean Gordon.
With the threat of catastrophic climate change looming on the horizon, policymakers in the United States are making a concerted effort to mitigate methane pollution. Methane is a greenhouse gas (GHG) that is nearly 80 times more potent than carbon dioxide in the short term. The oil and natural gas industry is one of the largest emitters of this powerful GHG in the United States.
Methane mitigation from the oil and gas industry is an example of how our environmental challenges can also be economic opportunities. Proven, low-cost technologies are already available to cut methane emissions from the oil and gas sector. An ICF report from 2014 found that methane emissions from the energy sector could be cut by 40% just through the adoption of available emissions-control technology and operating practices. The United States can create tens of thousands of good-paying jobs manufacturing and installing the technology needed to stop wasteful and unnecessary fugitive emissions. The Biden administration’s methane mitigation actions present a win-win-win situation. Reducing methane leaks from the oil and gas sector will reduce energy waste, spur quality job creation, protect workers and communities, and help to combat climate change.
Under the Biden administration, action is being taken to directly reduce methane emissions while supporting and creating good union jobs. Most notable among these actions are the U.S. Environmental Protection Agency’s (EPA) standards for methane pollution from the oil and gas industry and the passage of the Methane Emissions Reduction Program (MERP) in the Inflation Reduction Act.
In this blog series we will first provide an overview of the proposed EPA rule and the MERP. Blog two will then examine how the policies work together to strengthen our economy and protect our planet.
EPA Rule Overview
Given the potency of methane and volatile organic compounds (VOCs) emitted from the oil and gas industries, the EPA took action pursuant to its authorities under the Clean Air Act to regulate emissions from the industry. One iteration of these standards came in 2016, when the EPA finalized its rule creating new source performance standards (NSPS) for methane and VOCs from new, modified, and reconstructed sources in the oil and gas industry. When the EPA released its 2016 rule, the BlueGreen Alliance released its report Plugging the Leaks which examined the employment outcomes as the result of new standards on the oil and natural gas industry. At the time the report found that compliance with the new requirements would lead to 50,000 new jobs created directly and indirectly over the first decade. Since then the methane mitigation industry has grown rapidly, nearly doubling since 2017, with many firms in the industry being small businesses. This rule was weakened during the Trump administration when the EPA introduced a series of amendments to the 2016 NSPS, referred to as the “2020 Policy Rule” and “2020 Technical Rule.” While Congress was able to repeal the 2020 Policy Rule with a CRA resolution in 2021, the 2020 Technical Rule remains in place.
On November 15, 2021 the Biden EPA released a proposed rule that would not only restore and strengthen the NSPS for new and reconstructed sources, it would institute the first nationwide emissions guidance for existing sources within the industry. After a period of feedback from constituent organizations, advocates, and industry groups, the EPA released its supplemental methane rule in November 2022, which seeks to refine elements of the standard to produce a more functional rule. The EPA’s 2022 rule, referred to as the supplemental rule, requires the oil and natural gas industry to reduce fugitive methane emissions. The primary mechanism for this reduction is in the creation of new requirements for leak detection and reporting. This would include quarterly inspections for all wellsites, with additional optical gas imaging (OGI) inspections regularly required for the largest sites. The rule would also accelerate the deployment of cost-effective technologies by requiring zero-emissions pneumatic pumps, updating and strengthening emissions standards on compressor stations, and permitting the use of continuous monitoring technologies. Additionally, the supplemental rule creates the Super Emitter Response Program (SERP), which would allow qualified third parties to remotely monitor for “super emitter events,” classified as emissions of 220.5 pounds of methane per hour or larger, and make direct notification to the public and the operator for immediate repair. Lastly, the program creates new standards to reduce routine flaring and orphaned wells, which are each responsible for a significant portion of methane emissions in the oil and gas sector.
The EPA’s analysis of this supplemental rule finds that the standards would reduce up to 87% of methane emissions from covered sources. That would include cutting 36 million tons of methane emissions, which is the equivalent of 810 million tons of carbon dioxide, and recover nearly $4.6 billion in wasted gas by 2035.
In addition to the proposed EPA rule, the federal government took a major step in mitigating methane emissions with the passage of the Inflation Reduction Act. Among the historic funding for programs to address climate change was the inclusion of the new MERP, which targets methane and VOCs from the oil and gas industry. The program tackles these emissions through a two-pronged approach:
- First, MERP provides $1.5 billion in funding to mitigate emissions. The $1.5 billion will fund a variety of activities through grants and technical assistance aimed at preventing fugitive leaks. This includes funding for the owners and operators of oil and gas facilities to increase their monitoring of methane leaks and accelerate the deployment of advanced industrial equipment that can reduce emissions. Additionally, the program allows for funding to be used to plug certain wells on non-federal land, for ecosystem restoration, and to address the harmful effects of legacy pollution on frontline communities.
- Second, MERP imposes a charge on wasted methane emissions that rises over time. The fee—officially the “waste emissions charge”—imposes a charge on each excess ton of methane an operator emits above threshold levels that are based on the oil and gas industry’s targets for controlling pollution. The charge will be implemented starting in 2024 and incrementally increasing in the years after. Facilities that meet or beat these pollution thresholds will not pay the charge.
Methane pollution poses a serious risk to the health of workers, communities, and the environment. The actions taken by Congress and the EPA not only take action to reduce this pollution, but unlocks the economic potential of methane mitigation to create good-paying jobs in frontline communities. The EPA’s Methane Rule and the Methane Emissions Reduction Program together serve as the foundation of a complementary effort to protect workers and communities, address climate change, and create jobs by driving the deployment of cost-effective, available technology and practices to reduce methane leaks.
The second blog in their series explores how these two efforts compliment each other.