EPA Initiates Review of Methane Standards for Oil and Gas Sector

Date: April 4th, 2017

Explanation: Regulatory action

Agencies: EPA

The Environmental Protection Agency (EPA) published a notice in the Federal Register announcing that it is reviewing and, if appropriate, will initiate proceedings to suspend, revise or rescind the methane emission standards for new and modified oil and gas facilities. EPA is reviewing the rule pursuant to President Trump’s Executive Order on Promoting Energy Independence and Economic Growth. The notice states that EPA will consider the following issues in its review:

• Whether the rule and alternative approaches are appropriately grounded in EPA’s statutory authority and consistent with the rule of law
• Whether the rule or alternative approaches would appropriately promote cooperative federalism and respect the authority and powers that are reserved to the states
• Whether the rule and alternative approaches effect the Administration’s dual goals of protecting public health and welfare while also supporting economic growth and job creation
• Whether the rule or alternative approaches appropriately maintain the diversity of reliable energy resources and encourage the production of domestic energy sources to achieve energy independence and security
• Whether the rule and alternative approaches will provide benefits that substantially exceed their costs

New Source Performance Standard for Oil and Gas Sector

On June 3, 2016, EPA published a final rule setting NSPS for greenhouse gases (namely methane) and volatile organic compounds, applicable to new, modified, and reconstructed facilities in the oil and gas sector. Affected facilities include well sites, gathering and boosting stations, processing plants, and compressor stations.

• Final Rule (June 3, 2016) [Update 11-20-17]
  • List of Covered Facilities
  • Regulatory Impact Analysis
  • Fact Sheet
  • Technical Support Document
• Proposed Rule (Sept. 18, 2015)

Litigation: 

The methane emission standards were challenged in North Dakota v. EPA, No. 16-1242 (D.C. Cir. 2016). State and industry petitioners argued that the rule exceeded EPA’s statutory authority, was unconstitutional, and was arbitrary, capricious, an abuse of discretion, and not in accordance with law. On January 4, 2017 the case was consolidated with American Petroleum Institute v. EPA, No. 13-1108 (D.C. Cir. 2013) and Independent Petroleum Association of America, et al. v. EPA, No. 15-1040 (D.C. Cir. 2015). On January 24, 2017 state and industry petitioners filed a motion asking the D.C. Circuit Court of Appeals to delay the briefing schedule to “allow time for new administration personnel to be briefed on the rules, issues, and history of this litigation, and it would allow them to provide meaningful input on the parties’ discussions regarding the briefing schedule and format.”

Deregulatory Action: 

On March 28, 2017, President Trump issued an executive order instructing EPA to review the oil and gas rule and to rescind or rewrite the rule as needed to promote the President’s goals of energy independence and economic growth. EPA immediately submitted a motion to the D.C. Circuit Court of Appeals to hold the case in abeyance pending EPA’s reconsideration of the rule. The court granted EPA’s request on May 18, 2017.

On April 4, 2017, EPA published a notice in the Federal Register announcing that it is reviewing and, if appropriate, will initiate proceedings to suspend, revise or rescind the rule.

On April 18, 2017, EPA sent a letter to fossil fuel companies stating that it intended to reconsider the fugitive emission standards in the NSPS (the companies had petitioned EPA for reconsideration of those standards). On June 5, 2017, EPA issued a federal register notice stating that it is granting reconsideration of additional requirements in the NSPS, specifically the well site pneumatic pumps standards and the requirements for certification by professional engineer. The EPA indicated that it was staying the requirements for three months pending reconsideration. On June 16, 2017, EPA proposed a two-year stay of the NSPS requirements.

On July 3, 2017, the U.S. Court of Appeals for the District of Columbia Circuit vacated the initial three month stay of the rules, holding that the EPA lacked authority under the Clean Air Act to issue the stay. The court issued a mandate, requiring EPA to begin implementing the rules. The mandate was delayed for 14 days on July 13, 2017, “to give EPA time to determine whether to seek panel rehearing, rehearing en banc, or pursue other relief.” The 14 day period ended on July 28, 2017.

On July 31, 2017, a majority of the full court of the U.S. Court of Appeals for the District of Columbia Circuit ordered “the Clerk to issue the mandate . . . forthwith,” requiring EPA to begin implementing the rules.

On November 8, 2017, EPA issued a notice of data availability in support of its proposed two year stay of the NSPS requirements. The notice provides additional information on topics raised in comments on the stay, including challenges associated with implementing the NSPS requirements, and EPA’s authority to stay implementation.

Executive Order 13783: Promoting Energy Independence and Economic Growth

On March 28, 2017, President Trump issued an executive order aimed at at dismantling many of the key actions that have been undertaken at the federal level to address climate change.  The order directs EPA to review and potentially rescind or re-write important regulations such as the Clean Power Plan (CO2 emission standards for existing power plants), CO2 emission standards for new power plants, and methane emission standards for the oil and gas sector. It also revokes a number of executive orders and actions, including: guidance on calculating the social costs of greenhouse gas emissions, an imposing a moratorium on federal coal leasing, and guidance on how to account for climate change in environmental reviews. Finally, it directs all agencies to review existing regulations, orders, guidance documents, policies, and any other similar agency actions that potentially burden the development or use of domestically produced energy resources, with particular attention to oil, natural gas, coal, and nuclear energy resources, and to develop recommendations on how to alleviate or eliminate aspects of agency actions that burden domestic energy production.

A detailed summary is available on our Climate Deregulation Tracker here.

See also: OMB Guidance Document on Implementation of EO 13783 (May 8, 2017). This guidance focuses on implementation of Section 2, which requires agencies to review all existing regulations, orders, guidance documents, policies, and any other similar agency actions that potentially burden the development or use of domestically produced energy resources, with particular attention to oil, natural gas, coal, and nuclear energy resources, and to develop recommendations on how to alleviate or eliminate aspects of agency actions that burden domestic energy production.