Public Hearings Announced For EPA’s Methane Leak Rule Impacting The Oil and Gas Industry
On August 18, 2015, the Obama administration proposed a rule regulating methane leaks from new and modified oil and gas wells. This rule is part of Obama’s Climate Action Plan to cut methane emissions from U.S. oil and gas production by 40 to 45 percent by 2025 (compared to 2012 levels). Part of the plan is a new rule cutting emissions from new and modified oil and natural gas wells including requirements to find and repair leaks at oil and gas wells and capture gas that escapes from fracking wells.
The rule would apply only to emissions from new or modified natural gas wells, which were not covered in EPA’s 2012 rules. EPA claims the rule will provide greater certainty about Clean Air Act permitting requirements for the oil and natural gas industry.
The following requirements are included in the proposed rule:
- Updates to New Source Performance Standards and Draft Control Techniques Guidelines;
- Proposed Source Determination Rule;
- Proposed requirements for natural gas well sites, oil well sites, natural gas production gathering and boosting stations, gas processing plants, and natural gas transmission compressor stations.
The rule requires that owners/operators of natural gas well sites use a technology known as optical gas imaging to conduct a leaks monitoring survey. Optical gas imaging equipment uses a special camera to “see” emissions of methane and VOCs. New well owners/operators would be required to conduct the survey within 30 days after the end of the first well completion or on the date the site begins production. Modified sites must have surveys within 30 days of the modification.
The survey would cover valves, connectors, pressure-relief devices, open0-ended lines, access doors, flanges, crank case vents, pump seals or diaphragms, closed vent systems, compressors, separators, dehydrators, and thief hatches on storage tanks, among others. Ongoing monitoring may be required depending on the number of leaks found. EPA is seeking public comment on whether to require a “corporate-wide” leak detection and repair program.
Officials estimate the new rule would cost industry from $320 million to $420 million in 2025. The administration is expected to finalize the rules next year shortly before Obama leaves office. The methane rule follows a recent regulation to cut carbon dioxide emissions from coal-fired power plants.
Methane is a key component of natural gas. It is a greenhouse gas more than 25 times the greenhouse gas potency than that of carbon dioxide. It is the second most prevalent greenhouse gas emitted in the U.S., accounting for 10% of all U.S. greenhouse gas emissions from human activities.
EPA also plans to extend VOC reduction requirements to existing oil and gas sources in ozone nonattainment areas and states in the Ozone Transport Region. The agency will do this by issuing Control Techniques Guidelines (CTGs) that provide an analysis of the available, cost-effective technologies for controlling VOC emissions from covered oil and gas sources. According to EPA, many controls to reduce VOCs also reduce methane as a co-benefit.
The proposed EPA rule was published in the Federal Register on August 27, 2015, at 80 FR 51991. Two hearings will be held on September 23, 2015, simultaneously—one in Denver, CO, and one in Dallas, TX. One hearing will be on September 29, 2015, in Pittsburgh, PA.