The U.S. Environmental Protection Agency (EPA) today released proposed regulations that would set performance standards for emissions of methane and volatile organic compounds (VOCs) from new and modified sources in the upstream and midstream oil and natural gas sectors.

Section 111 of the Clean Air Act charges the EPA with developing standards of performance based on the “best system of emission reduction which . . . has been adequately demonstrated.”  In 2012, EPA promulgated standards of performance under Section 111 for VOCs for the oil and gas sector including hydraulically fractured gas well completions and equipment leaks at natural gas processing plants.

The proposal adds standards for methane and expands the scope of emission sources subject to both the methane and VOC standards to hydraulically fractured oil well completions, fugitive emissions from well sites and compressor stations, and pneumatic pumps. Sources already subject to the 2012 requirements that would also be covered by the proposed 2015 requirements would not have to install additional controls because the controls to reduce VOCs also reduce methane emissions. In other words, EPA determined that the “best system of emission reduction” for methane for these sources is the same as the “best system of emission reduction” for VOCs.

Under the Clean Air Act, the proposed standards would apply to sources that commence construction or undergo a modification after the date on which the proposal is published in the Federal Register. EPA proposes, in some instances, what would constitute a “modification.” For example, EPA proposes that for purposes of the fugitive emissions standards, a modification would occur when a new well is added to a well site (regardless of whether the well is fractured) or an existing well on a well site is fractured or refractured.

Separately, EPA is seeking public comment on two proposed approaches for defining the term “adjacent,” one of three factors used to determine whether oil and gas equipment and activities are considered separate sources, or rather part of a major source that would be subject to major source permitting requirements under Clean Air Act air permitting programs.

In January 2015, the administration announced a goal to cut methane emissions from the oil and gas sector by 40 to 45 percent from 2012 levels by 2025. EPA claims that today’s proposal will be a key part of the administration’s action plan for achieving that goal. EPA will accept public comment on the proposals for 60 days following their publication in the Federal Register. EPA is also accepting comments through September 1 on its proposed voluntary Natural Gas STAR Methane Challenge Program, where owners of existing natural gas operations can voluntarily commit to reducing methane emissions.

Ballard Spahr’s Environment and Natural Resources Group has extensive experience preparing public comments on national rulemakings. The Group also advises on national and regional compliance, permitting, relevancy, development, business planning, and contamination matters arising in connection with environmental and natural resources laws and claims, and includes a particular focus on climate change and sustainability. For more information, please contact Harry Weiss at 215.864.8129 or weiss@ballardspahr.com, or Lorene L. Boudreau at 215.864.8245 or boudreaul@ballardspahr.com.


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