Oil and gas industry backs EPA's proposed fix to 2016 regulations

By Patrick C. Miller | September 11, 2018

The U.S. Environmental Protection Agency on Tuesday issued proposed improvements to the 2016 New Source Performance Standards for the oil and gas industry.

The agency said its targeted improvements would “streamline implementation, reduce duplicative EPA and state requirements and significantly decrease unnecessary burdens on domestic energy producers.” EPA estimates its proposal will save about $484 million in regulatory costs from 2019 to 2025 or around $75 million per year.

“These common-sense reforms will alleviate unnecessary and duplicative red tape and give the energy sector the regulatory certainty it needs to continue providing affordable and reliable energy to the American people,” said Andrew Wheeler, EPA acting administrator. “Removing these excessive regulatory burdens will generate roughly $484 million in cost savings and support increased domestic energy production—a top priority of President Trump.”

The proposed improvements include aligning requirements between EPA's rule and existing state programs; modifying the frequency for monitoring leaks (fugitive emissions) at well sites and compressor stations; and making it easier for owners and operators to use emerging measurement technologies in their leak monitoring surveys.

The EPA said it would continue to consider other policy issues in the 2016 rule. This includes the regulation of greenhouse gases in the oil and gas sector, which will be addressed in a separate proposal at a later date. The agency will take comment on the proposed rule for 60 days after its publication in the Federal Register and will hold a public hearing in Denver, Colorado. Details on the hearing will be announced soon.

The American Petroleum Institute (API) issued a statement saying it supports cost-effective, achievable regulations targeting the reduction of volatile organic compounds (VOC), which also reduces methane emissions.  The organization said EPA’s proposed changes could ensure that the rule is cost effective and based on the best engineering practices.

“Clean natural gas produced through advanced technologies like hydraulic fracturing has helped reduce carbon emissions to 25-year lows,” Howard Feldman, API senior director of regulatory and scientific affairs. “U.S. air quality continues to improve as the natural gas and oil industry remains committed to reaching our shared goals of protecting public health and the environment while meeting the nation’s energy needs.”  

Other industry-related organizations responded positively to the EPA’s proposed changes to the 2016 rule. Barry Russell, president and CEO of the Independent Petroleum Association of America (IPAA), said, “This proposal not only reassures America’s continued path toward global energy leadership, but also continues to protect the environment and communities where energy production is located. It is important for the states to play an important role in decisions that affect their citizens, industries and natural resources.”

Kathleen Sgamma, president of the Western Energy Alliance, said the group is pleased that the EPA is addressing a rule the Obama administration designed to keep the oil and gas industry mired in red tape.

“By fixing the numerous technical problems with the original rule, EPA will enable industry to continue its four-decade success record of reducing methane emissions,” she said. “This new rule encapsulates the energy dominance agenda that is leading to huge increases in American energy production and jobs with dramatically lower levels of imports from overseas, all while delivering environmental protection.”