At 8 AM this morning, the Obama administration unveiled its multi-pronged strategy to control methane emissions from the oil and gas sector. The plan will involve proposals from the Interior Department, the Department of Transportation, the Department of Energy, and the EPA. This post focuses on what EPA intends to do.
It is being widely reported that EPA’s regulatory mandate will be limited to new and modified sectors within the oil and gas industry, pursuant to Clean Air Act §111b (“new source performance standards”). This is seen as a major loss for environmental special interests, which had pushed for the regulation of existing sectors in the oil and gas industry, pursuant to Clean Air Act §111d (“existing source performance standards”). THIS MEDIA NARRATIVE IS INNACURATE!
In fact, EPA snuck in a de facto nation-wide regulation of methane from the oil and gas sector. Here’s how: A press release from the White House lists as the second administration action to mitigate methane emissions the following:
New Guidelines to Reduce Volatile Organic Compounds
EPA will develop new guidelines to assist states in reducing ozone-forming pollutants from existing oil and gas systems in areas that do not meet the ozone health standard and in states in the Ozone Transport Region. These guidelines will also reduce methane emissions in these areas. The guidelines will help states that are developing clean air ozone plans by providing a ready-to-adopt control measure that they can include in those plans.
These standards are known as “control technique guidelines,” pursuant to Clean Air Act Part D, and they would establish rules for existing sectors of the oil and gas industry within areas of the country that fail to achieve national ambient air quality standards for ozone, known as “nonattainment” areas. So, if you live in an area that runs afoul of the ozone standard, then you would be subject to these regulations for existing sectors of the oil and gas industry.
Here’s the catch: The Obama administration will in October promulgate a draconian ozone standard that would subject virtually the whole country to “nonattainment” rules. Below, I’ve reposted a map of the U.S. of areas that would be fall into ozone “nonattainment” as a result of the rule.
According to the map, many major oil and gas production areas (i.e. Texas, Oklahoma, Colorado, New Mexico, Pennsylvania) would fall into a non-attainment and thereby be subject to the rules. Nor is the Bakken in the clear; its ozone emissions have been increasing, for obvious reasons. And because of the interconnectedness of the industry (i.e., the oil and gas logistics infrastructure sprawls across the country) the VOC/methane rules, in practice, would extend to virtually the whole country.
With this “trick”–i.e., relying on its powers pursuant to Clean Air Act Part D–the agency can empower itself to give the greens what they want–de facto §111d existing source performance standards for the oil and gas industry.
[UPDATED 12:39 PM, 1.16.2015: Politico was one of the subjects of this post, having mistakenly reported on Wednesday morning that the nonattainment rule described above would have a very limited geographic applicability. Here’s what Politico reported:
EPA will also issue guidelines for VOC controls on some pieces of new and existing oil and gas equipment. That won’t apply nation-wide though – only in about a dozen counties violating ozone standards – not all of which even produce oil and gas.
Yesterday morning, Politico Morning Energy issued the following correction:
THAT ONE’S ON ME: Some information about EPA’s methane-related plans in yesterday’s edition fell short. EPA plans to issue guidelines for volatile organic compound (a precursor to smog) controls on some pieces of new and existing oil and gas equipment. The guidelines won’t be nationwide, but will apply to well more than our original estimate, according to the EPA. The guidelines will apply to oil and gas operations in the 127 counties that are not meeting ozone air quality standards, if they have oil and gas sources, and also in the 11 northeast states (plus Washington, D.C. and parts of northern Virginia) that make up the Ozone Transport Region, according to EPA spokeswoman Liz Purchia. The number of counties could change over time.