Stage set for EPA rollback of Obama methane rules

By Jean Chemnick | 08/11/2020 01:16 PM EDT

Methane flare at Pawnee National Grassland in Colorado.

Methane flare at Pawnee National Grassland in Colorado. WildEarth Guardians/Flickr

EPA is on the verge of releasing rules rolling back Obama-era standards on a powerful greenhouse gas and replacing them with weaker alternatives.

The White House Office of Management and Budget has completed its reviews of a pair of methane rules and returned them to EPA yesterday. Administrator Andrew Wheeler is expected to sign and release them later this week.

The timing might be related to a court order requiring EPA to file a response brief in U.S. District Court by Friday in a case involving states and environmentalists suing EPA to regulate methane for existing oil and gas operations.

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The 2016 Obama rule is a prerequisite for an existing-source standard, and EPA has said it will no longer be obligated to regulate methane from operations that came online prior to 2016 once it rescinds the rule. So the agency is likely to finalize the rule before it misses that court deadline — probably Thursday or Friday.

Both rules relax different aspects of the same 2016 standard. EPA moved its fix for Obama-era requirements for monitoring and repairing leaks in a 2018 "technical rule" that proposed changes sought by industry to monitoring frequency and technologies that can be used.

Separately in 2019, EPA proposed scrapping direct methane regulation in favor of a rule that focused only on volatile organic compounds, or VOCs. The ozone precursor is abundant in oil and gas production and processing, and EPA argued that methane would be controlled as a byproduct of capturing VOCs, making a separate rule for methane unnecessary. But by focusing on VOCs instead of methane, EPA avoids regulating transmission and storage — segments of the supply chain that are rich in methane and poor in VOCs.

Industry experts who have followed the rulemaking say EPA is right to move the two rules on the same day but separately. That ensures the rules will move through the courts separately and their fates won’t be intertwined.

"Given the fact that both of these rules were going to be litigated, I think from our standpoint we wanted to see them separated because we didn’t want these technical issues that are purely structural around the way the rule functions getting caught into a larger debate over whether it’s appropriate to regulate VOC or methane," said Lee Fuller, vice president of government relations for the Independent Petroleum Association of America.

The spotlight has been mostly on what EPA calls the "policy" rule — trading climate-forcing methane for regulation of VOCs.

But during the two months the rules were under review at OMB, sources say, the White House and EPA faced off about an aspect of the technical rule. At issue was whether producers would be compelled to monitor their operations for leaks once or twice a year. IPAA and the smaller producers it represents have pressed for annual reviews, saying that twice-annual monitoring was overly burdensome.

The proposal made inspections semiannual. But the White House wanted to pare that back to once a year, according to records of interagency discussion that were published after the rule was proposed in 2018.

The Wall Street Journal first reported yesterday that the White House renewed that call during review of the final rule in June and July. But EPA political and career staff warned that would increase methane emissions so much that it might make the rule harder to defend in court.

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