Final Rule Issued to Cut Methane Emissions, Strengthen GHG Reporting for Oil and Gas Industry

On May 6, 2024, the EPA announced it issued its final Subpart W rule to strengthen, expand, and update methane emissions reporting requirements for petroleum and natural gas systems under its Greenhouse Gas Reporting Program (GHGRP), as required by President Joe Biden’s Inflation Reduction Act (IRA).

“The final revisions will ensure greater transparency and accountability for methane pollution from oil and natural gas facilities by improving the accuracy of annual emissions reporting from these operations,” an EPA news release says. “Oil and natural gas facilities are the nation’s largest industrial source of methane, a climate ‘super pollutant’ that is many times more potent than carbon dioxide and is responsible for approximately one third of the warming from greenhouse gases (GHG) occurring today.”

Recent studies reveal that actual emissions from petroleum and natural gas systems are much greater than what’s historically been reported to the GHGRP, according to the EPA. This rule addresses that gap and includes:

• Updates to facilitate the use of satellite data to identify super-emitters and quantify large emissions events
• Requirements for direct monitoring of key emissions sources
• Updates to the methods for calculation

Together, these changes support complete and accurate reporting and respond to Congress’s directive for the measurement of methane emissions to rely on empirical data.

“The final subpart W rule will dramatically improve the quality of emissions data reported from oil and natural gas operations, with provisions that improve the quantification of methane emissions, incorporate advances in methane emissions measurement technology, and streamline compliance with other EPA regulations,” the Agency news release adds. “For the first time, EPA is allowing for the use of advanced technologies such as satellites to help quantify emissions in subpart W. In addition, EPA is finalizing new methodologies that allow for the use of empirical data for quantifying emissions, including options added in response to public comments on the proposed rule. The final rule also allows for the optional earlier use of empirical data calculation methodologies for facilities that prefer to use them to quantify 2024 emissions. These changes will improve transparency and expand the options for owners and operators to submit empirical data to demonstrate their effort to reduce methane emissions and identify whether a Waste Emissions Charge is owed, based on thresholds set by Congress.”

This final rule is a key component of the IRA’s Methane Emissions Reduction Program, as designed by Congress to help states, industry, and communities implement recently finalized Clean Air Act (CAA) methane standards and slash methane emissions from the oil and gas sector.

“As we implement the historic climate programs under President Biden’s [IRA], EPA is applying the latest tools, cutting edge technology, and expertise to track and measure methane emissions from the oil and gas industry,” said EPA Administrator Michael S. Regan in the Agency news release. “Together, a combination of strong standards, good monitoring and reporting, and historic investments to cut methane pollution will ensure the U.S. leads in the global transition to a clean energy economy.”

The current administration is also mobilizing more than $1 billion in financial and technical assistance to accelerate the transition to no- and low- emitting oil and gas technologies as part of broad efforts to cut wasteful methane emissions.

The EPA recognizes that advanced measurement technologies, and their use for annual quantification of emissions, are evolving rapidly. The Agency says it “is committed to transparent and continual improvements to its programs to account for these advancements while ensuring reporting is accurate and complete.”

The following steps are planned for the Agency to gather further information about advanced measurement technologies and to inform potential regulatory changes or other standard-setting programs that encourage the use of more accurate and comprehensive measurement strategies:

• This summer, the EPA will solicit input on the use of advanced measurement data and methods in subpart W by issuing a request for information (RFI) and opening a nonregulatory docket, including specific questions and topics the EPA seeks input on from the public. The Agency intends to use the feedback to consider whether it’s appropriate to undertake further rulemaking addressing the use of advanced measurement technologies in subpart W beyond the role for these technologies that’s already provided in the new rule announced May 6.
• The EPA also seeks to continuously update its knowledge about new measurement and detection technologies and to elicit input from stakeholders and experts about how such advances should inform its regulations. To keep pace with this dynamic field, the EPA plans to undertake a solicitation or an engagement for information about advanced measurement and detection technologies (in the form of an RFI, a workshop, or a similar mechanism) on at least a biennial basis. The Agency believes these engagements will enable it to learn about technological advances and the extent to which there’s robust information about their accuracy, reliability, and appropriateness for use in a regulatory reporting program.

Methane Emissions Reduction Program background

In December 2023, the EPA issued a final rule to sharply reduce methane emissions and other harmful air pollution from new and existing oil and gas operations.

In addition, the EPA is working to implement the three-part framework of the IRA’s Methane Emissions Reduction Program:

1. The EPA is partnering with the U.S. Department of Energy to use resources provided by Congress in the IRA to provide over $1 billion in financial and technical assistance to accelerate the transition to technologies that reduce methane emissions and may include funds for activities associated with marginal (i.e., low-producing) conventional wells, support for methane monitoring, and funding to help reduce methane emissions from oil and gas operations.
2. As directed by Congress, the EPA is updating subpart W of the Greenhouse Gas Reporting Program to ensure reporting of methane emissions from oil and natural gas operations is based on empirical data and accurately reflects emissions.
3. In January 2024, the EPA proposed a rule to implement Congress’s requirement for a Waste Emissions Charge. To take advantage of near-term opportunities for methane reductions while the EPA and states work toward full implementation of the final oil and gas rule, Congress directed the Agency to collect a charge on methane emissions from large oil and gas facilities that are high-emitting and wasteful based on data submitted under subpart W.

Background: GHGRP requirements for the petroleum and natural gas sector

The GHGRP requires reporting of GHG data and other relevant information from large GHG emissions sources, fuel and industrial gas suppliers, and carbon dioxide (CO₂) injection sites in the United States. Approximately 8,000 facilities are required to report their emissions annually, and the reported data is made available to the public in October of each year.

Under the GHGRP, owners or operators of facilities that contain petroleum and natural gas systems and emit 25,000 metric tons or more of GHGs per year (expressed as CO₂ equivalents) report GHG data to the EPA. Owners or operators collect GHG data, calculate GHG emissions, and follow the specified procedures for quality assurance, missing data, recordkeeping, and reporting. Subpart W consists of emissions sources in 10 segments of the petroleum and natural gas industry. For more information, see the EPA website Subpart W—Petroleum and Natural Gas Systems.