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POLICY

US, Canada Unveil New Methane Restrictions at Gas, Oil Sites

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COP27 in Egypt

The US and Canada this week unveiled long-awaited plans to further slash methane emissions from oil and gas operations, in keeping with last year’s pledges to rein in releases of the climate-warming gas by 2030.

The US Environmental Protection Agency (EPA) rolled out its new draft regulations Friday, saying the rules are expected to total net climate benefits valued at $34 billion to $36 billion from 2023 to 2035, highlighting part of that is savings from recovered natural gas due to less venting and flaring.

The proposal fills in regulatory details of previously announced standards targeting emissions from both new production and processing as well as older operations, which environmentalists long argued should have the same requirements.

Methane, the primary component of natural gas, has more than 80 times the warming power of carbon dioxide over the first 20 years after it reaches the atmosphere.

US President Joe Biden, speaking at the COP27 Friday in Sharm el-Sheikh, Egypt, referenced last year’s COP26 Global Methane Pledge, in which 130 countries have vowed to cut at least 30% of emissions globally by 2030, calling it “our best chance” to keep a 1.5 degrees Celsius target within reach.

And the Canadian government’s proposed framework aims to cut at least 75% of emissions from the oil and gas sector from 2005 levels by 2030, following the pledge Ottawa made at last year’s COP in Glasgow, Scotland.

Both proposals include more rigorous requirements for routine leak monitoring at production sites, including an effort to address leaks from legacy wells, and stepped-up restrictions for flaring of associated gas from oil production like that prominent in the Permian Basin.

Oil and gas lobby groups in both countries said they were still reviewing the proposals but sought to underscore the sector’s methane reductions already achieved to date, a mix of voluntary and regulatory efforts.

“Our industry is taking action, and as a result, methane emissions relative to production fell 60% from 2011 to 2020,” said Frank Macchiarola, American Petroleum Institute’s vice president for policy, economics, and regulatory affairs.

And Elisabeth Besson, a spokeswoman for the Canadian Association of Petroleum Producers. said recent reports show Canada’s oil and gas sector is on track to meet the initial 45% methane reduction target by 2025 set by Ottawa.

Canada’s proposed framework would expand current regulations to include a wider swath of oil and gas facilities and equipment. Greens have for years complained that Canada’s methane governance is rife with loopholes and carveouts.

The proposed framework would require all pneumatic pumps and controllers at oil and gas facilities to be zero-emissions or include capture technology. And all facilities would have to have a fugitive emissions management plan with monthly inspections — including single wellhead sites, which is stricter than the EPA proposal.

EPA Targets Leak Detection, Flaring

The EPA draft rule takes several significant steps to tighten the proposal from last November. The 2021 plan laid out general mandates for oil and gas operators to enact emissions control equipment for hydraulic fracturing, liquids unloading, tanks, pneumatic controllers and other sources across the value chain.

The EPA estimates that the new draft rule, which fills in details of how operators should be complying with last year’s mandate, could slash the sector’s emissions as much as 87% by 2030, compared to an earlier EPA estimate of 74%, both from 2005 levels.

The agency’s draft regulations specifically include more stringent leak detection and repair requirements, something environmentalists pushed for in the rulemaking. The EPA previously suggested monitoring requirements be based on emission thresholds that may not have captured the entire universe of operations.

The draft adopts a tiered approach that ties the frequency and type of inspections to the level of operation. For example, a production site with multiple wellheads and compressors must use optical gas imaging quarterly, whereas a single well owner must only perform audio-visual checks.

Another notable change: the EPA raised the bar for when companies may flare off associated gas. The 2021 proposal did not prohibit flaring unless there is a sales line available. In a change welcomed by environmentalists, the new regulations permit flaring only if the owner or operator can show efforts to get access to a sales line or facilitate alternative off-site transport of associated gas.

Green groups generally praised the draft rule and the changes the EPA made. “As well-intentioned as last year’s proposal was, it essentially exempted too many wells,” said Darin Schroeder with the Clean Air Task Force. The new proposal includes some “really important improvements,” he said.

The EPA is taking comment on the rulemaking until Feb. 13, 2023.

Topics:
Low-Carbon Policy, Policy and Regulation, Methane Emissions
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