EPA Publishes Rule Significantly Limiting Methane Emissions from Crude Oil and Natural Gas Facilities

On March 8, 2024, the U.S. Environmental Protection Agency ("EPA") finalized multiple rulemakings to reduce air pollution emissions from the Crude Oil and Natural Gas category of emissions sources under the Clean Air Act ("CAA"). The actions finalized in this rulemaking were first proposed in a notice of proposed rulemaking published on November 15, 2021, and were later expanded in a supplemental notice of proposed rulemaking published on December 6, 2022.

Section 111 of the CAA requires the EPA to identify major sources of air pollution to be regulated, establish standards of performance for air pollutants emitted by new sources in identified source categories, and establish emission guidelines for states to establish standards of performance for certain pollutants emitted by existing sources in those categories. EPA's March 8th actions regulate greenhouse gases (GHGs) and volatile organic compounds ("VOCs") emitted from the "Crude Oil and Natural Gas" source category. Among other changes, the final rule revises performance standards under the CAA regulating GHG and VOC emissions from new and modified pollution sources in the Crude Oil and Natural Gas category, and promulgates emission guidelines under the CAA for states to follow in establishing state performance standards to limit GHG emissions from existing sources in the category.

In addition, the rule makes some regulatory amendments to fill gaps left by Congress's disapproval of a regulation passed late in the Trump Administration. On September 14, 2020, under the Trump Administration, EPA (the "2020 Policy Rule"), which rescinded a number of CAA regulations on Crude Oil and Natural Gas sources. On June 30, 2021, President Biden signed a joint resolution of Congress under the Congressional Review Act that rejected the 2020 Policy Rule. This prevented the 2020 Policy Rule from taking effect, but left some inconsistencies in the regulatory regime because some sources were subject to conflicting standards under another 2020 Trump Administration regulation that was not rejected by Congress.

Together, these new regulatory actions are expected to have a significant impact. Between 2024 and 2038, these new rules are expected to reduce approximately 58 million short tons of methane emissions (based on methane's 100-year global warming potential, the equivalent to reducing 1.5 billion tons of carbon dioxide emissions). This represents a 79 percent reduction in projected emissions from the sources covered by the final rule.

This final rule will go into effect on May 7, 2024.