EPA offers states chance to oversee methane rules

OREANDA-NEWS. June 03, 2016. US oil and gas companies bristling at the idea of the federal government overseeing their efforts to cut methane emissions could have another option, if states approve their own rules that are equally as stringent.

The US Environmental Protection Agency (EPA) tomorrow will formally publish rules requiring oil and gas companies to limit methane emissions from new and modified equipment. The rules, which the agency first released on 12 May, will set first-time national standards for how often companies have to search for leaks, along with the rate of methane emissions from new and modified equipment.

But EPA has left open the opportunity for oil and gas companies to instead comply with state rules, so long as they reduce at least the same amount of methane. This could avoid overlapping regulations and complement states that are "being proactive" in addressing methane from the oil and gas sector, EPA said.

Colorado in 2014 became the first state to adopt comprehensive methane regulations for oil and gas companies. Pennsylvania, Ohio and California this year proposed their own methane rules for the oil and gas industry. EPA and state regulators have started targeting methane leaks because it is a potent greenhouse gas that also contributes to local air pollution problems.

EPA said it has not found any existing state regulatory programs that are fully equivalent to its own methane standards, making it unlikely oil companies could rely entirely on state regulations to comply with EPA rules. But state officials are already considering modifying their own rules so they align with federal requirements.

Colorado's air pollution control division deputy director Chris Colclasure said it was possible the state would "look to reconcile" the state's regulations with the EPA requirements. But he said Colorado's rules as written "do a better job" than the federal rules because the state already regulates existing sources, whereas EPA's regulations only address new and modified sources.

EPA said before it approves a state compliance option, it wants oil and gas companies to submit applications demonstrating their state regulations are as stringent as federal regulations. EPA said it plans to take public comment on those applications and decide whether to approve them within a year.

Processing applications on this case-by-case basis could prove an obstacle to broad adoption, said oil industry attorney Sandra Snyder, who works at the law firm Bracewell. She said EPA might consider ways to review multiple applications at the same time, if multiple companies are seeking alternative compliance for the same state program.

Environmental groups have urged states to adopt their own methane regulations, particularly because EPA has just started developing regulations for existing oil and gas sources. But environmental groups might raise concerns with having a state take the lead role in implementing EPA's new methane regulations if that state lacks a robust enforcement program.

"From our perspective the most important thing is not who is doing it but to make sure it is done right, that the emission reductions are actually happening," Sierra Club attorney Andres Restrepo said.

EPA's methane standards for new and modified equipment will start to take effect on 2 August.