With some misinformation circulating in the industry about regulations, we held a rapid-fire ‘Fact or Fiction’ with our VP of Environmental Solutions, Brian Taylor. Brian has over 20 years of experience in the oil and gas industry focused on EHS, Air Quality, ESG, and driving environmental excellence in an evolving landscape. Tune in to the video here.
Statement: “My technology is already approved under OOOOb.”
Reality: Fiction.
There is no technology that’s approved under OOOOb. Technologies can’t even apply for that approval until 60 days after the rule is published in the Federal Register – which puts us at May 7th. From there, there will be a lengthy process to even get that approval working with the EPA. So, no, there are no approved technologies for OOOOb/c at this time.
Statement: The EPA will be hiring satellites and flyovers to look for super emitters.
Reality: Fiction.
The EPA’s Super Emitter Program (SEP) doesn’t have the authority or the budget to hire satellites and airplanes to go look for super emitter events. They will, however, allow approved third parties, using approved technologies, to submit data to the EPA to put on their website – and require the operators to go through the process to mitigate those emissions.
Statement: Operators will need to start reporting inventories well-site by well-site.
Reality: Fact, in 2025.
For the calendar year 2024– it’s still under the existing Subpart W rule, which just requires basin-wide reporting for the production and gathering & boosting segments. The proposed rule for 2025, which will go into effect January 1st, 2025, will require individual site-by-site reporting of those emissions under Subpart W. All emissions reported to the EPA are publicly available under the Subpart W Program or any greenhouse gas reporting program.
Statement: Operators will get fined for leaks found under the Super Emitter Program (SEP).
Reality: Fiction.
The Super Emitter Program is part of a performance standard. If a super emitter is discovered and reported, the company is obligated to mitigate those emissions and make sure they’re addressed. That doesn’t specifically mean that there’s going to be a fine. A fine indicates that something is wrong and needs to be addressed with an enforcement action.
If the company doesn’t perform those responsibilities within the prescribed timeframe or fails to fix the leak, then there could be an enforcement action and a fine/penalty. Otherwise, it could go into Subpart W reporting and potentially be part of a methane Waste Emissions Charge (WEC). The terminology and language is very important – it’s not a fine if the company is responding as required in the rule.
Statement: The Waste Emissions Charge doesn’t apply to operators under 0.2% Methane Intensity.
Reality: Fact.
For your 2024 emissions, if you maintain that intensity below 0.2 for upstream production, then yes, it’s unlikely that you will have to pay the Waste Emissions Charge. However, Subpart W is changing in a lot of cases; emissions will increase without any change on a site just because of the new emissions factors and methodologies for estimating those emissions. So, you might be under 0.2% today, but you might not be for 2025 when the revised Subpart W goes into effect. This is still a proposed rule, but that’s a realistic scenario for a lot of operators.
Statement: OOOOc will take years to finalize.
Reality: Fact
It will take years to finalize. From the federal perspective, OOOOb is a final rule that was recently published in the Federal Register. But OOOOc is the emissions guidelines for the states to implement those requirements – that part will take time. Each state has up to two years to get their plan into the EPA, then the EPA has 18 months to approve that plan and put it into effect. So, it’s going to take some time.
Statement: There’s no need to act until OOOOc and the Methane Emissions Charge fully play out.
Reality: Fiction.
It’s advisable to start thinking about these things now. The proposed rule does not allow for the regulatory exemption to take effect until the administrator has deemed that all the states have plans that are approved by the EPA and are in effect. So we’re thinking 2027-28, before that exemption would be applicable to a given operator.
Statement: The EPA will have the right to audit a well-site to confirm that the inventories are reported correctly.
Reality: Fact.
They do this now. It’s a little bit more complicated because it’s reported up by basin, so sometimes it might be more challenging to drill down. From a data perspective, the EPA always has the authority to go on any site, at any time, and evaluate data. Section 114 of the Clean Air Act allows them to ask for any data they want from an operator. This exists today and it will continue to exist going forward.
Statement: Measurement-informed inventories will be allowed under the proposed subpart W changes.
Reality: Fiction.
This is not allowed. There are prescribed emissions factors and methodologies for calculating emissions for all sources under the Subpart W program. None of those include using a methane-informed inventory as would be done under OGMP 2.0.
Statement: These rules are hastily done and therefore they can easily get rolled back under the Congressional Review Act.
Reality: Fiction.
Nothing is easy to get rolled back, given the time frame. So for OOOOb/c, it’s unlikely that the Congressional Review Act will have any impact. Now that it’s in the Federal Register, they’re not going to meet that time frame. That’s really like an August, or September timeframe where if a rule is not finalized by then, a new administration would have the opportunity under the Congressional Review Act to repeal any rules that were in effect or that were proposed.
Statement: Companies are not going to have to pay a methane fee in 2025.
Reality: Fiction.
They will have to pay a methane fee in 2025 based on 2024 emissions based on the Inflation Reduction Act and the Waste Emissions Charge proposed regulation. Congress enacted that and there isn’t any exemption other than lawsuits that could delay that (which is another topic for another day). But as it stands right now, they will be paying in 2025 for 2024 emissions.
Statement: An ‘Other Large Release Event’ must be coming from a piece of equipment not already included in GHGRP reporting.
Reality: Fact.
‘Other Large Release Events’ (events greater than 100 kilograms an hour or 250 metric tons of CO2E, under Subpart W, as proposed) must be from a source not otherwise accounted for in Subpart W reporting. So, blowdowns are already reported under Subpart W. If you have a compressor blowdown that exceeds that threshold, you would use that compressor blowdown methodology to calculate those emissions – it would not trigger or be classified as an ‘Other Large Release Event’. Those are meant to capture things more like a well blowout or some major failure that isn’t accounted for under Subpart W.
For more information, reach out – we’d love to dive deeper and answer any other lingering questions.
*information current as of April 3, 2024.