The Trump administration's rollback of Obama-era methane regulations is technically aimed at new and modified oil and gas facilities, but it could also limit federal oversight of the industry's largest source of methane emissions: existing operations.

On Aug. 13, the U.S. Environmental Protection Agency released two final rules that eased methane regulations for the oil and gas sector. The rules rescinded methane regulations for new and modified oil and gas facilities established under the Obama administration.

The Trump administration's rules also exempted transmission and storage facilities from regulations on volatile organic compound but left them in place for production and processing sources. The regulations exempted low-producing wells from some requirements and tweaked leak monitoring regulations for the industry.

Under the Obama administration, the EPA set performance standards in 2016 under Section 111(b) of the Clean Air Act designed to control planet-warming methane emissions from new and modified oil and gas facilities. That provision of the statute also requires the EPA to regulate existing sources under Section 111(d) when new sources in the same source category come under regulation.

By lifting the Obama EPA's regulations for new and modified sources, the EPA effectively rescinded its authority to regulate existing oil and gas facilities for methane emissions under Section 111(d), said Ellen Kurlansky, a former policy advisor and analyst in the EPA's Office of Air and Radiation.

"It's those existing sources that really need to be controlled," Kurlansky said in an interview. "New sources can eventually be a problem, but one of the things about methane is that it doesn't stay in the atmosphere nearly as long as CO2. If you want to do something about climate change in the near-term, methane is really key."

Debate over methane regulation

In November 2016, the Obama EPA issued an information request to gather data on existing oil and gas facilities in preparation for a final Section 111(d) methane rule. However, the EPA withdrew the request months after President Donald Trump was sworn into office. In 2018, the agency proposed amendments to the Obama-era regulation and then, in 2019, a rule to roll back the 2016 standards.

Meanwhile, a coalition of 14 states and the District of Columbia sued the EPA in April 2018 over its failure to address methane emissions from existing sources. In the lawsuit, which was placed on hold, the petitioners cited a study conducted by ICF International projecting that sources in existence prior to 2012 would account for up to 90% of emissions in the oil and gas sector in 2018.

U.S. natural gas systems in 2018 accounted for the second-largest share of anthropogenic methane emissions in the country behind livestock farms, releasing the equivalent of approximately 140 million tonnes of planet-warming carbon dioxide into the atmosphere, according to the EPA's latest data.

In its final policy amendments, however, the EPA said an absence of regulation for existing sources will have limited impact, citing market incentives for the oil and gas industry to capture as much gas — and, by extension, methane — as is cost-effective. The agency also said maintaining a "social license to operate" has become increasingly important and noted that some companies are now participating in voluntary programs to mitigate methane emissions.

The agency said the Obama administration violated the Clean Air Act because before finalizing its 2016 rule, it failed to make a finding that methane contributes significantly to air pollution. The industry said existing controls for volatile organic compounds in the processing and production segments capture methane from those sources.

"Every single molecule of methane from new oil and natural gas wells will be captured by this revised rule," Western Energy Alliance President Kathleen Sgamma said. "Methane leak detection and repair, tank and pneumatic controls, and controls from the wellhead to the gas plant remain."

But while the controls for volatile organic compounds and methane are the same, the implications for regulating them are not, given that the Aug. 13 rules remove a pathway for regulating methane from existing sources, according to Darin Schroeder, an attorney with the environmental organization Clean Air Task Force. In addition, methane emissions will likely increase overall because the rule eliminates regulations from the transmission and storage segments, reduces monitoring requirements and exempts low-producing wells, Schroeder said.

Paul Seby, an attorney with Greenberg Traurig LLP who has counseled clients in the energy sector, countered that a federal methane regulation is unnecessary so long as states are regulating emissions from oil and gas operations.

"I think that you'd be hard-pressed to find any oil and gas state — that is, any state that's got any reasonable-sized oil and gas development going on — [that does not] have a strong suite of regulations already in place," Seby said. "So, it's not as though this regulation is doing anything but respecting what the states are doing, versus telling them what to do, one-size-fits-all from Washington, D.C."

The regulation also will help smaller producers by ensuring that they only have to report to one governmental entity rather than two, given the significant cost that comes with monitoring and reporting methane emissions, Seby said. Such environmental regulations require companies to add employees and invest in expensive cameras and equipment, financial burdens that disproportionately hinder smaller oil and gas companies compared with the majors, Seby said.

Potential steps of a future administration

With the rules, the Trump administration is allowing 850,000 wells across the country to continue polluting communities, according to Peter Zalzal, special projects director and lead attorney with the Environmental Defense Fund. And the way the administration implemented the rule is "deeply flawed and unlawful," Zalzal said.

"We think that [the regulatory action] is quite vulnerable and doesn't hamstring a future corrective action," Zalzal said. "Our hope is that any future administration would recognize that and act swiftly to put in place standards that are consistent with legal obligations and science."

A future administration could seek federal regulation of methane emissions from existing oil and gas sources, but the Aug. 13 rules add more steps to such a process. The Environmental Defense Fund already announced its intent to sue the Trump administration over the rules.

"Essentially, it's just creating inefficiencies," the Clean Air Task Force's Schroeder said of the rules. "Like Obama did in 2016, a possible future administration can also regulate methane, and therefore they can regulate existing sources. It just adds time and effort to a process."