EPA Can Enforce New Emissions Regulations
On Friday, October 4, 2024, the Supreme Court delivered a unanimous decision affirming the Environmental Protection Agency's (EPA) authority to regulate emissions. This ruling dismissed a challenge brought by nearly half of the states and industry groups against the new federal regulations. The high court declined to grant a stay on the EPA's measures pending further legal proceedings, with no dissenting opinions recorded.
The court’s decision unequivocally affirms the EPA's authority to enforce comprehensive new methane emissions regulations affecting numerous existing and new well sites and facilities, ultimately encompassing all sources in the Oil and Gas sector.
What is the “Methane Rule”?
The “Methane Rule” is a combination of several new regulations and laws rolled out by the Biden Administration as part of its “whole-of-government” approach to reduce emissions of greenhouse gasses (GHGs).
The main components of this approach include regulations published in the Federal Register and laws establishing the EPA’s Methane Emissions Reduction Program, include:
NSPS OOOOb. In March 2024 the EPA published its final rule with updated emissions regulations to 40 CFR part 60 subpart OOOOb (pronounced “quad-o b”). OOOOb contains sweeping new regulations for well sites and facilities placed into service after December 06, 2022. Some of the more notable requirements mandate operators must reduce emissions of methane and volatile organic compounds (VOCs) by 95%, eliminate routine flaring of associated gas, and demonstrate compliance with inspections, technology, and in some cases continuous emissions data collection.
EG OOOOc. Emissions Guidelines (EG) OOOOc is a model rule for states and tribal agencies to follow when developing their individual emissions plans. OOOOc is substantially similar to OOOOb and will apply to existing well sites and facilities placed into service before December 6, 2022. Essentially, OOOOc will supersede both OOOO and OOOOa by extending OOOOb rules to all well sites and facilities. Importantly, OOOOc requires state plans to be at least as restrictive as the model rule, but states can opt for even more restrictive regulations. States are to submit their plans to the EPA by March 2026 for approval by the agency and final plans will go into effect in 2029.
WEC. The Waste Emissions Charge (WEC) was passed as part of the Inflation Reduction Act (IRA) and is a law, not a regulation. The WEC for methane imposes a fee on facilities that emit more than 25,000 metric tons of CO2 equivalent annually. The WEC starts at $900 per metric ton for 2024 reported methane emissions, increases to $1,200 per metric ton for 2025 emissions, and reaches $1,500 per metric ton for emissions years 2026 and later. Since the term facilities includes all sites owned by a company in a basin, most medium and last E&P companies fall within the WEC jurisdiction and will be subject to Waste Emissions Charges on March of 2025 for their emissions during 2024.
Subpart W. In May 2024, the EPA amended the Petroleum and Natural Gas Systems source category (subpart W) of the Greenhouse Gas Reporting Program (GHGRP) to expand reporting requirements and close gaps in data reporting. For example, the final rule includes previously unreported sources such as other large release events, nitrogen removal units, produced water tanks, mud degassing, and crankcase venting
Implications for Operators
The practical implication of the court’s ruling is that the EPA can begin enforcing the new regulations on oil and gas well sites, production pads, and facilities. For operations that were placed in service after December 6, 2022, NSPS OOOOb went into effect on May 7, 2024. Later in 2029, OOOOc compliant state plans will go into effect. As a result, operators with active development drilling programs are subject to the new Methane Rule today.
But perhaps the most important implication is that the oil producers will be subject to Waste Emissions Charges for emissions they have already encountered in 2024. Those emission charges can result in fines in the millions of dollars. Furthermore, the fine will automatically increase in 2025 and 2026.
Pioneer Energy Emissions Control Treater is a zero emissions oil production facility that all but eliminate methane and VOC emissions from oil production sites. We can help you eliminate your WEC liability.
Contact us today to learn how Pioneer Energy technology can help you not just comply with the new emissions regulations, but also maximize the efficiency and profitability of your oil and gas producing operations.
About Pioneer Energy
Pioneer Energy is the leading provider of field equipment for processing natural gas at oil and gas production well sites and facilities. We are pioneering technology for decarbonizing oil & gas production with innovative technologies that offer operators the most reliable, rugged and easy-to-use solutions for reducing emissions and converting inefficiencies into profits.
Based in Colorado, our technologies are operating successfully in multiple oil and gas regions. Pioneer Energy’s engineering, field service, and remote operations teams provide best-in-class support for our domestic and international customers, and we offer custom engineering design and fabrication services in our state-of-the-art facility.