Green Energy Institute Charged Debate: EPA and BLM Methane Rules are Now in Effect for Oil and Gas Operations. Now What?

By Lev Blumenstein, Energy Law Fellow

Image Credit: Wild Earth Guardians (2014)

Methane is a potent greenhouse gas (GHG). Over a hundred-year-period, it has twenty-five times the global warming potential of carbon dioxide (CO₂). Both the United States Environmental Protection Agency (EPA) and the federal Bureau of Land Management (BLM) recently issued rules regulating fugitive methane emissions generated during oil and gas operations. The rules have the potential to meaningfully reduce GHG emissions from America’s energy sector, but an uncertain regulatory environment threatens to undercut the anticipated reduction in GHG emissions.

EPA’s Methane Rule

On June 3, 2016, EPA issued a rule regulating methane emissions from new, reconstructed, and modified oil and gas operations. Additionally, the rule directs well operators to inspect existing well sites for methane leaks and repair any leaks they discover. EPA estimates that the avoided emissions will total 6.9 million metric tons of CO₂equivalent (CO₂e)in 2020 and 11 million metric tons of CO₂ein 2025.[1]

The regulations went into effect on August 2, 2016, and an initial survey to discover leaks was to have been completed by June 3, 2017. In April 2017, the new EPA Administrator, Scott Pruitt, announced his intent to reconsider provisions of the rule and issue a ninety-day stay of the June 3, 2017, compliance date.[2] On June 5, 2017, EPA issued an official notice of reconsideration of the regulation and a retroactive ninety-day stay of the compliance date. EPA then announced its intention to stay the entire rule for two years while it reconsidered the rule. Environmental groups sued.[3] On July 3, 2017, the United States Court of Appeals for the District of Columbia vacated EPA’s stay during the pendency of its reconsideration of the final rule.

BLM’s Natural Gas Rule

On November 18, 2016, BLM promulgated a rule regulating natural gas that is lost during oil and gas operations on federal and Indian land. BLM estimated that 114 billion cubic feet of natural gas was vented, flared, or leaked in 2014, which is enough to supply 1.5 million households with natural gas for a year.[4] BLM anticipates that the rule will avoid up to 4.5 million tons of CO₂eemissions per year.[5] In May, the regulation unexpectedly survived a Senate vote to repeal it under the Congressional Review Act. On June 15, 2017, BLM announced that it is postponing the compliance deadline for many provisions of the rule during the pendency of litigation concerning the rule.[6] A number of states and environmental groups filed a lawsuit challenging BLM’s stay in the United States District Court for the District of Northern California.[7]

An Uncertain Future for Federal Methane Rules?

The methane rules are now in effect, but their future effectiveness is uncertain in three key respects. First, through notice and comment rulemaking, the agencies may rescind or modify the rules in the next few years. Both EPA and BLM have announced their intent to revisit their rules. Operators may postpone rectifying sources of fugitive emissions in anticipation of a regulatory rollback. Second, courts could find the rules invalid. Third, the agencies may deprioritize enforcement of the rules. This is a more serious issue if BLM deprioritizes enforcement. There is no applicable citizen suit provision that would allow private citizens to directly sue emitters who violate BLM’s methane regulations.

EPA’s methane rule is different. Private citizens may directly sue emitters of fugitive methane emissions covered by EPA’s regulation. However, private citizens are not as effective as EPA in ensuring widespread compliance with regulations for two important reasons. First, private citizens may not leverage the threat of criminal prosecution. Second, private citizens lack the administrative, financial, legal, scientific, and technical resources available to the federal government. Nevertheless, the threat of a potential citizen suit should prompt most emitters to comply with EPA’s regulations for now, even if the Administration sends clear signals that it will not prioritize enforcement of EPA’s methane rule.

The regulatory uncertainty and the difficulty in challenging a possible decision by BLM to deprioritize enforcement of its methane rule threaten to undercut the potential gains from EPA and BLM’s rules.