18 August 2020

EPA Revises Oil and Gas Regulations, Spurring Divergent Reactions

On August 13, the U.S. Environmental Protection Agency (EPA) completed its reconsideration of the agency’s 2016 oil and gas regulations when Administrator Andrew Wheeler signed a pair of rulemakings that revise the new source performance standards  for new oil and gas sources. EPA describes the revisions as reducing undue regulatory burdens and providing substantial cost savings without increasing emissions. Several environmental groups argue the revisions unlawfully reduce regulation of methane emissions and immediately pledged to file suit to challenge the new rules.

In one rule, the policy amendments, EPA removes the transmission and storage segment from the regulation. For the production and processing segment, the policy amendments also remove direct federal limits on methane emissions. The agency explained that when the Obama administration EPA had promulgated the rule, it failed to show that “a pollutant contributes significantly to air pollution,” which serves as a predicate to regulating any air pollutant, and that this failure made the addition of the transmission and storage segment to the oil and gas category inconsistent with the law. The agency also found the regulation of methane from the production and processing segment was redundant, because pollution controls required to reduce volatile organic compound emissions also reduce methane emissions.

The second rule, originally proposed in September 2018, includes several technical amendments, including revising the timing and scope of certain monitoring, repairs, recordkeeping, and reporting requirements. The agency’s supporting regulatory impact analysis concluded that the two rulemakings will yield $750 million to $850 million in net benefits over the period of 2021-30. The amendments will take effect 60 days after publication in the Federal Register.

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