• March 3, 2022

    Smart Methane Regulations Will Reduce Emissions While Allowing for Growth

    Chad Whiteman

Over the past decade America’s shale energy revolution has provided affordable and reliable energy for consumers and businesses, driven significant economic growth and job creation, and helped strengthen global energy security. In addition, increased production and use of natural gas has resulted in dramatic reductions of U.S. greenhouse gas emissions. To continue that progress and reduce emissions even further, the oil and natural gas value chain is committed to reducing methane emissions through innovation and efficiency, and to partnering with government on sensible and durable regulation.  

Methane is a primary component in natural gas. It is also a greenhouse gas and when it escapes to the atmosphere, it contributes to climate change. Oil and natural gas producers have an incentive to capture methane because it is an increasingly valuable energy source and manufacturing feedstock around the world. The good news is that United States oil and natural gas production already has one of the lowest methane emissions intensity rates in the world. More can be done though, and both the U.S. Chamber and many in the oil and natural gas industry are ready to work with EPA. The Agency has released what it is calling regulations on methane emissions, although the actual regulatory requirements are not included in what was proposed. The details of those regulations are important, however, so let’s dive into some of the specifics. 

It is critical that methane regulations follow the requirements of the Clean Air Act. Doing so will ensure the viability and legal defensibility of any final rule. For example, while there is no question the oil and natural gas sector does emit methane, EPA still must follow the appropriate process to make those legal findings. This is especially important as EPA considers expanding its regulations to new segments of the oil and natural gas sector.    

Any new regulation must also encourage innovation. Methane detection and abatement are in the early stages of development and will invariably become more effective, efficient, and affordable. That requires allowing for continued development of technology and solutions by providing flexibility in the language. For instance, the requirements EPA has laid out are very prescriptive regarding monitoring of emissions and leak detection. However, advancements in the use of aircraft surveys, drones, and/or other remote sensing technologies are expected to speed up and improve leak detection and will serve to minimize the number of personnel associated with physical, on-site measurement, avoiding risks to safety and health.   

Therefore, EPA should provide flexibility in its monitoring requirements to reflect these new approaches. Many technologies are still to be developed and have yet to be reliably demonstrated. EPA should develop methane regulations that focus on performance in achieving the necessary reductions and should identify market-based solutions to meet that objective in the most cost-effective manner possible. 

A reasonable compliance date is also essential to ensure a smooth transition to stricter regulations and a legally sound rule. The Clean Air Act requires all new projects to meet the new regulation as of the day it was proposed—not when it will be adopted. The entirety of EPA’s initial proposal is preamble text, and includes no binding regulatory text, which is highly unusual. Given the complexity of these subjects and cost of compliance, making the regulation take effect now creates an unfair environment for producers who wish to invest in new projects. That’s the last thing we need given tight energy markets, higher prices and increasing demand. The compliance date should be delayed until EPA provides a complete set of regulatory text.   

EPA can create durable, cost-effective regulation that provides long-term certainty for the upstream and midstream segments of the oil and natural gas sector, while addressing critical economic, legal, and policy considerations. We will work with EPA as productive participants in the process to adopt new methane regulations that will allow us to meet energy demand at home and abroad while reducing emissions.