The Legal Framework for Federal Methane Regulation

The Legal Framework for Federal Methane Regulation

Updated September 5, 2023
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 may also be regulated
Reg. 63,110. On November 22, 2022, EPA released a
pursuant to other statutory authorities.
supplemental proposed rule.
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 onshore oil and gas production facilities
sources is addressed primarily through voluntary programs
to stop venting and flaring methane—that is, releasing or
and is thus outside the scope of this In Focus.
burning methane as a waste byproduct of the production
process. Facilities would be required to capture the methane
Clean Air Act
and either route it to a pipeline that would deliver the gas
Section 111 of the CAA (42 U.S.C. § 7411) directs the
for commercial use or use it onsite as a fuel source. If
Environmental Protection Agency (EPA) to regulate
neither option were available, the rule would permit
emissions from certain categories of stationary sources that
continued flaring of methane but would require a 95%
emit any pollutant that EPA has determined “causes, or
emissions reduction and additional monitoring and
contributes significantly to, air pollution which may
reporting 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 supplemental proposal includes a matrix
Once EPA identifies a source category as contributing to
for periodic and continuous emissions screening with
pollution that may endanger public health and welfare,
varying detection thresholds and monitoring frequencies.
Section 111 requires EPA to develop New Source
Higher detection thresholds require more frequent
Performance Standards (NSPS) to regulate emissions from
monitoring.
newly constructed, modified, or reconstructed sources in
that source category. Section 111 also requires EPA to
The supplemental proposal also includes a “Super-Emitter
develop emissions guidelines for pollutants from existing
Response Program” for emissions of 100kg/hr or greater. If
sources in categories for which EPA develops NSPS so
such an event is detected, the owner or operator would be
long as the pollutant to be regulated is not already regulated
required to identify the cause of the leak within five days
pursuant to another provision of the CAA. NSPS and
and plug the leak within ten days.
emissions guidelines represent the level of emissions
reduction achievable by the application of the best system
The proposed rule would also promulgate emissions
of emission reduction (BSER) as determined by EPA.
guidelines for existing sources that largely track the
Sources may achieve emissions reductions any way they
limitations in the NSPS for new sources.
see fit so long as emissions reductions are equal to the
reductions achievable by the BSER identified by EPA.
Municipal Solid Waste Landfill Methane
Where individual states have EPA-approved State
Regulations Under the CAA
Implementation Plans (SIPs), states implement NSPS.
Landfills account for approximately 17% of methane
Otherwise, implementation of NSPS falls to EPA.
emissions in the United States. EPA promulgated a new
Individual states implement emissions guidelines through
NSPS for municipal solid waste landfills in 2016. 81 Fed.
SIPs that must be approved by EPA. In the event a state
Reg. 59,276. The 2016 rule amended an earlier NSPS
does not submit an emissions guideline SIP, EPA must
issued in 1996. The 2016 rule applies to landfills built,
develop one for the state. Performance standards and
modified, or reconstructed after July 17, 2014, with a
emissions guidelines are then included in an individual
design capacity of at least 2.5 million metric tons.
source’s CAA permit.
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The Legal Framework for Federal Methane Regulation
The rule reduced the threshold for when a landfill has to
Inflation Reduction Act of 2022
capture landfill gases from fifty metric tons per year of non-
Section 50263 of the IRA requires DOI to include in all oil
methane organic compounds to thirty-four metric tons. The
and gas leases issued after enactment of the IRA a provision
rule also altered monitoring requirements and expanded
requiring lease holders to pay royalties on all natural gas
approved uses for landfill gas.
produced on federal land and on the outer continental shelf,
including gas lost due to venting, flaring, or negligence.
Emissions guidelines for existing municipal solid waste
The statute displaces BLM guidance that permitted royalty-
facilities largely tracks the limitations in the NSPS for new
free venting and flaring of methane in certain
landfills with the notable exception that the guidelines kept
circumstances. The statute makes exceptions for
the threshold for capturing landfill gasses at fifty metric
emergencies, gas used on site, and gas that is unavoidably
tons for closed landfills.
lost. The statute effectively supersedes the federal district
court decision that vacated the BLM methane waste
Forty-two states have yet to submit a SIP. On May 21,
prevention rule discussed above.
2021, EPA issued a new final rule creating a federal
implementation plan for states that have yet to submit a SIP
Section 60113(c) of the IRA amended the CAA to direct the
and issuing new regulations for states to submit SIPs after
EPA to collect a charge from owners or operators of oil and
the federal plan is in place. 86 Fed. Reg. 27,756.
gas infrastructure (except distribution lines) for wasted
methane emissions. The provision applies to the following
Infrastructure Investment and Jobs Act
categories of covered facilities:
EPA estimates that coal mines (active, inactive, and
abandoned) account for about 8% of methane emissions
1. Offshore petroleum and natural gas production,
nationally. EPA does not currently regulate coal mine
2. Onshore petroleum and natural gas production,
methane emissions. The agency maintains an outreach
3. Onshore natural gas processing,
program to encourage the capture and use of methane
emissions from coal mines.
4. Onshore natural gas transmission compression,
5. Underground natural gas storage,
The Infrastructure Investment and Jobs Act appropriated
6. Liquefied natural gas storage,
$11.3 billion to reclaim abandoned mine lands. Reclaiming
abandoned mines includes filling in the mine to
7. Liquefied natural gas import and export
approximate the contour of the land prior to mining and
equipment,
replanting native vegetation, crops, or trees. According to
8. Onshore petroleum and natural gas gathering and
the White House, reclaiming abandoned mine lands may
boosting, and
help reduce methane emissions from abandoned mines.
9. Onshore natural gas transmission pipeline.
Mineral Leasing Act
The provision applies only to listed facilities that emit more
than 25,000 metric tons of carbon dioxide equivalent per
The Mineral Leasing Act (MLA) governs the development
year. Facilities are charged for emissions in excess of a
of oil and gas on federal lands. The MLA gives the
threshold set in the statute. The charge is initially set to
Department of the Interior (DOI) the authority to set royalty
$900 per metric ton of methane emitted above the relevant
rates for oil and gas produced on federal land. In 2016, the
threshold and rises to $1,500 per metric ton of methane
Bureau of Land Management (BLM), an agency within
after two years. Different thresholds are set for different
DOI, issued a regulation pursuant to Section 189 of the
categories of facilities. Facilities that comply with future
MLA that would have imposed royalties on all gas
CAA methane regulations, such as the proposed NSPS and
produced on federal land (including gas that was vented or
emissions guidelines for the oil and gas source category, are
flared) and would have thereby increased the amount of gas
exempt from the charge. The IRA directs EPA to determine
subject to royalty payments. That rule, however, was
whether facilities are exempt from the charge.
vacated by a federal district court in Wyoming. The court
found that BLM lacked the statutory authority to
Offshore Oil and Gas Methane Emissions
promulgate the rule because its purpose was to regulate air
The two IRA provisions mentioned above apply to offshore
pollution, but regulation of air pollution is committed to
oil and gas production. The Bureau of Ocean Energy
EPA. Although methane is therefore not currently regulated
Management and the Bureau of Safety and Environmental
under the MLA, Section 50263 of P.L. 117-169 (commonly
Enforcement, however, do not currently regulate methane
referred to as the Inflation Reduction Act of 2022 [IRA]),
emissions from offshore oil and gas production. Further, 42
largely mirrors the vacated BLM rule.
U.S.C. § 7627, which explicitly authorizes EPA to regulate
PIPES Act of 2020
offshore sources, does not apply to the North Slope
Borough in Alaska and in the Gulf of Mexico, except for
The PIPES Act imposes stricter standards for natural gas
the Florida Gulf Coast. Offshore oil and gas operations not
pipeline leak detection and repair, requiring repair of all
subject to EPA’s regulation will not be eligible for the
leaks hazardous to human safety or the environment or with
methane charge exemption in the IRA.
the potential to become hazardous. The Pipeline and
Hazardous Materials Safety Administration has initiated a
rulemaking process to implement the stricter leak detection
Benjamin M. Barczewski, Legislative Attorney
standards. The proposed rule has yet to be released.
IF12217
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The Legal Framework for Federal Methane Regulation

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