EPA sets new oil and gas methane reporting rules

Federal regulators have updated emissions reporting requirements for oil and gas facilities as they prepare to implement a methane "waste" fee for the industry.

The US Environmental Protection Agency (EPA) on Monday finalized new rules it says will improve the accuracy of data from the oil and gas sector under the federal greenhouse gas emissions reporting program. Oil and gas facility owners and operators will be required to estimate emissions from additional types of equipment under the rule, and they can draw on newer technologies, like remote sensing, to help estimate emissions.

"EPA is applying the latest tools, cutting edge technology, and expertise to track and measure methane emissions from the oil and gas industry," agency administrator Michael Regan said. "Together, a combination of strong standards, good monitoring and reporting, and historic investments to cut methane pollution will ensure the US leads in the global transition to a clean energy economy."

Data to support new fee

The revisions to the "Subpart W" reporting requirements will be used to determine the amount of methane that will be subject to a "waste emissions charge" created by the Inflation Reduction Act. Under the law, the charge will be calculated based on the annual data that about 8,000 oil and gas sources are now required to report.

The charge will begin at $900/t for 2024 methane emissions above a minimum threshold using current measurement data. It will then rise to $1,200/t in 2025 and $1,500/t in subsequent years.

Industry officials had raised "serious concerns" about several aspects of the original proposal, warning it could lead to inflated emissions data.

"We are reviewing the final rule and will work with Congress and the administration as we continue to reduce GHG emissions while producing the energy the world needs," American Petroleum Institute vice president of corporate policy Aaron Padilla said.

The industry group previously said it will ask Congress to repeal the fee, which is only likely to occur if Republicans win control of the White House.

Data collected since 2010

Oil and gas facilities have reported emissions under Subpart W since 2010. To simplify reporting, operators often count the equipment they have deployed, and use industry-wide averages to estimate emissions, in addition to other direct and indirect measurements.

The industry has argued the Subpart W data is not accurate enough to collect the methane charge, which is expected to cost operators more than $6bn over the next decade. Environmental groups have had their own criticisms of the data, which they say omits vast amounts of emissions such as those from "super-emitter" events and poorly maintained flares.

The final rule seeks to respond to some of those concerns by relying on updated emission factors, incorporating additional empirical data on emission rates, collecting data at a more granular level and relying on remote sensing technologies to detect large emission events.

EPA also revised Subpart W to include more types of sources, including produced water tanks, nitrogen removal units and crankcase venting. The final rule also sets a threshold of 100 kg/hr of methane for requiring the reporting of emissions from "other large release events."

The new data rules will take effect on 1 January 2025 and will first apply to reports submitted in early 2026 for next year's emissions. EPA is allowing the use of the new methodologies for calculating 2024 emissions, but operators can still use the existing rules.

By Michael Ball