September 20, 2022
The Legal Framework for Federal Methane Regulation
Methane is a greenhouse gas with 25 times the warming
Oil and Gas Industry Methane Regulations Under
capacity of carbon dioxide. Methane makes up about 11%
the CAA
of all greenhouse gas emissions in the United States.
Gas and oil production, transportation, and storage account
Primary sources of methane include oil and gas production,
for about 32% of methane emissions in the United States.
transportation and storage (methane is the main component
On November 15, 2021, EPA released a proposed rule that
of natural gas), landfill gases, coal mines, and agricultural
would establish NSPS and emissions guidelines for the oil
practices. Methane emissions are primarily regulated under
and gas source category for methane emissions. 86 Fed.
the Clean Air Act (CAA) but also may be regulated
Reg. 63,110. The Office of Management and Budget
pursuant to other statutory authorities.
received the final rule for review on August 15, 2022.
This In Focus summarizes existing federal authority to
If EPA promulgates the proposed rule without changes, it
regulate methane emitted from all sources except
would regulate methane in two significant ways. First, it
agricultural sources. Methane emitted by agricultural
would require most oil and gas production facilities to stop
sources is addressed primarily through voluntary programs
venting and flaring methane—that is, releasing or burning
and thus outside the scope of this In Focus.
methane as a waste byproduct of the production process.
Facilities would be required to capture the methane and
Clean Air Act
either route it to a pipeline that would deliver the gas for
Section 111 of the CAA (42 U.S.C. § 7411) directs the
commercial use or use it onsite as a fuel source. If neither
Environmental Protection Agency (EPA) to regulate
option were available, the rule would permit continued
emissions from certain categories of stationary sources that
flaring of methane but would require a 95% emissions
emit any pollutant that EPA has determined “causes, or
reduction and additional monitoring and reporting
contributes significantly to, air pollution which may
requirements.
reasonably be anticipated to endanger public health or
welfare.” EPA has identified methane as an air pollutant,
Second, the rule would impose expanded methane leak
and it has listed oil and gas production, transportation, and
detection standards on oil and gas production equipment
storage facilities and municipal solid waste landfills as
and compressor stations by expanding the number of
source categories that emit methane.
components checked for leaks and increasing the frequency
of monitoring. The rule proposes to use optical gas imaging
Once EPA identifies a source category as contributing to
to detect leaks. The proposed rule also sought comment on
pollution that may endanger public health and welfare,
the use of other leak detection technology, such as sensor
Section 111 requires EPA to develop New Source
networks, unmanned aircraft, mobile detection equipment,
Performance Standards (NSPS) to regulate emissions from
and satellite imagery.
newly constructed, modified, or reconstructed sources in
that source category. Section 111 also requires EPA to
The proposed rule would also promulgate emissions
develop emissions guidelines for pollutants from existing
guidelines for existing sources that largely track the
sources in categories for which EPA develops NSPS, so
limitations in the NSPS for new sources.
long as the pollutant to be regulated is not already regulated
pursuant to another provision of the CAA. NSPS and
Municipal Solid Waste Landfill Methane
emissions guidelines represent the level of emissions
Regulations Under the CAA
reduction achievable by the application of the best system
Landfills account for approximately 17% of methane
of emission reduction (BSER) as determined by EPA.
emissions in the United States. EPA promulgated a new
Sources may achieve emissions reductions any way they
NSPS for municipal solid waste landfills in 2016. 81 Fed.
see fit, so long as emissions reductions are equal to the
Reg. 59,276. The 2016 rule amended an earlier NSPS
reductions achievable by the BSER identified by EPA.
issued in 1996. The 2016 rule applies to landfills built,
Where individual states have EPA-approved State
modified, or reconstructed after July 17, 2014, with a
Implementation Plans (SIPs) states implement NSPS.
design capacity of at least 2.5 million metric tons.
Otherwise, implementation of NSPS falls to EPA.
Individual states implement emissions guidelines through
The rule reduced the threshold for when a landfill has to
SIPs that must be approved by EPA. In the event a state
capture landfill gases from 50 metric tons per year of non-
does not submit an emissions guideline SIP, EPA must
methane organic compounds to 34 metric tons. The rule
develop one for the state. Performance standards and
also altered monitoring requirements and expanded
emissions guidelines are then included in an individual
approved uses for landfill gas.
source’s CAA permit.
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The Legal Framework for Federal Methane Regulation
Emissions guidelines for existing municipal solid waste
Inflation Reduction Act of 2022
facilities largely tracks the limitations in the NSPS for new
Section 50263 of the IRA 2022 requires DOI to include in
landfills with the notable exception that the guidelines kept
all oil and gas leases issued after enactment of the IRA
the threshold for capturing landfill gasses at 50 metric tons
2022 a provision requiring lease holders to pay royalties on
for closed landfills.
all natural gas produced on federal land and on the outer
continental shelf. The royalties apply to gas lost due to
During the Trump Administration, EPA delayed the
venting, flaring, or negligence. The statute displaces BLM
implementation of the emissions guidelines, which delayed
guidance that permitted royalty-free venting and flaring of
the submission and approval of SIPs. Forty-two states have
methane in certain circumstances. The statute makes
yet to submit a SIP. On May 21, 2021, EPA issued a new
exceptions for emergencies, gas used on site, and gas that is
final rule creating a federal implementation plan for states
unavoidably lost. The statute effectively supersedes the
that have yet to submit a SIP and issuing new regulations
federal district court decision that vacated the BLM
for states to submit SIPs after the federal plan is in place. 86
methane waste prevention rule discussed above.
Fed. Reg. 27,756.
Section 60113(c) of the IRA 2022 amended the CAA to
Infrastructure Investment and Jobs Act
direct the EPA to collect a charge from owners or operators
EPA estimates that coal mines (active, inactive, and
of oil and gas infrastructure (except distribution lines) for
abandoned) account for about 8% of methane emissions
wasted methane emissions. The provision applies to the
nationally. EPA does not currently regulate coal mine
following categories of covered facilities:
methane emissions. The agency maintains an outreach
program to encourage the capture and use of methane
1. Offshore petroleum and natural gas production,
emissions from coal mines.
2. Onshore petroleum and natural gas production,
3. Onshore natural gas processing,
The Infrastructure Investment and Jobs Act appropriated
$11.3 billion to reclaim abandoned mine lands. Reclaiming
4. Onshore natural gas transmission compression,
abandoned mines includes filling in the mine to
5. Underground natural gas storage,
approximate the contour of the land prior to mining and
6. Liquefied natural gas storage,
replanting native vegetation, crops, or trees. According to
the White House, reclaiming abandoned mine lands may
7. Liquefied natural gas import and export
help reduce methane emissions from abandoned mines.
equipment,
8. Onshore petroleum and natural gas gathering and
Mineral Leasing Act
boosting, and
The Mineral Leasing Act (MLA) governs the development
9. Onshore natural gas transmission pipeline.
of oil and gas on federal lands. The MLA gives the
The provision only applies to listed facilities that emit more
Department of the Interior (DOI) the authority to set royalty
than 25,000 metric tons of carbon dioxide equivalent per
rates for oil and gas produced on federal land. In 2016, the
year. Facilities are charged for emissions in excess of a
Bureau of Land Management (BLM), an agency within
threshold set in the statute. The charge is initially set to
DOI, issued a regulation pursuant to Section 189 of the
$900 per metric ton of methane emitted above the relevant
MLA that would have imposed royalties on all gas
threshold and rises to $1,500 per metric ton of methane
produced on federal land (including gas that was vented or
after two years. Different thresholds are set for different
flared) and thereby would have increased the amount of gas
categories of facilities. Facilities that comply with future
subject to royalty payments. That rule, however, was
CAA methane regulations, such as the proposed NSPS and
vacated by a federal district court in Wyoming. The court
found that the main purpose of BLM’s rule was to regulate
emissions guidelines for the oil and gas source category, are
exempt from the charge. EPA’s proposed NSPS and
air pollution, but Congress delegated regulation of air
emissions guidelines cover the same categories of facilities
pollution to the EPA pursuant to the CAA. BLM,
as those listed in the IRA 2022. The IRA 2022 directs EPA
accordingly, lacked the statutory authority to promulgate
to determine whether facilities are exempt from the charge.
the rule. Although methane is therefore not currently
regulated under the MLA, Section 50263 of P.L. 117-169
Offshore Oil and Gas Methane Emissions
(commonly referred to as the Inflation Reduction Act of
The Bureau of Ocean Energy Management and the Bureau
2022 [IRA 2022], discussed below) largely mirrors the
of Safety and Environmental Enforcement do not currently
vacated BLM rule.
regulate methane emissions from offshore oil and gas
PIPES Act of 2020
production. EPA’s proposed methane emission regulation
and the two IRA 2022 provisions, however, apply to
The PIPES Act imposes stricter standards for natural gas
emissions from offshore oil and gas production.
pipeline leak detection and repair, requiring repair of all
leaks hazardous to human safety or the environment or with
the potential to become hazardous. The Pipeline and
Benjamin M. Barczewski, Legislative Attorney
Hazardous Materials Safety Administration has initiated a
IF12217
rulemaking process to implement the stricter leak detection
standards. The proposed rule has yet to be released.


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The Legal Framework for Federal Methane Regulation


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