On September 11, 2018, the Environmental Protection Agency proposed modifications to the 2016 New Source Performance Standards, a series of regulations enacted by President Barack Obama that require the oil and gas industry to take strict precautions to reduce and avoid methane leaks due to drilling. While proponents argue that the new standards would save energy companies hundreds of millions of dollars, a vocal opposition slammed the proposed changes in the law as a public health risk and a danger to a much-needed environmental protection.
When the New Source Performance Standards were enacted by the Obama administration, the fundamental goal of the regulatory provision was to end harmful methane leaking. According to the Environmental Defense Fund, methane – which is the main component of natural gas – is 84 times more potent than carbon dioxide. It absorbs the sun’s heat and is more effective at preventing the escape of infrared radiation, potentially making it more harmful for the climate. To combat this, the New Source Performance Standards sought to require energy companies to capture methane that would otherwise escape into the atmosphere during drilling for oil on American and tribal lands. Under current regulations, energy companies are expected to inspect their drilling operations as often as every six months. If methane leaks are found, repairs must take place within 30 days. The New Source Performance Standards were projected to eliminate 175,000 tons of methane emissions, 150,000 tons of volatile organic compounds, and 1,860 tons of hazardous pollutants. Proponents of the New Source Performance Standards applauded the added protections for the environment, hopeful that the regulations would effectively reduce pollution. Opponents of the New Source Performance Standards felt it placed an undue burden on the oil and gas industry given the Environmental Protection Agency’s own estimates that energy companies would pay $530 million between 2019 and 2025.
In response to complaints about the costly effect of the New Source Performance Standards, the Trump administration seeks to modify or remove some of the regulations currently in place. For instance, the proposed changes would extend the timeline for energy companies to inspect their drilling operations from every six months to every year. Another amendment would extend the 30-day rule that required almost immediate repair of methane leaks to 60 days, allowing companies more time to remedy these leaks while still holding them accountable for repairs. The proposed revisions would also seek to diminish the federal government’s role in such regulation by allowing energy companies to follow state rules regarding methane standards rather than federal rules. It is anticipated that these revisions to the current regulations will save energy companies $484 million dollars by the end of 2025, should they be approved.
The proposed changes to the New Source Performance Standards have caused an uproar among Democratic leaders across the nation. The leading Democrat on the Senate Appropriations Subcommittee on the Interior, Environment, and Related Agencies, Senator Tom Udall of New Mexico, called the proposal “wasteful and outrageous.” California and a number of other states share the outrage. Mary Nichols, California Air Resources Board and Chair, states that repealing the rule is “an attack on public health and continues the administration’s dereliction of duty to protect air quality, taxpayer dollars and the environment.” Meanwhile, the Environmental Protection Agency refers to the proposed amendment as something that will “reduce EPA and state requirements, streamline implementation, and significantly decrease unnecessary burdens on domestic energy producers.”
What Is Next?
A 12-hour public hearing was held on the proposed rule titled, “Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources Reconsideration,” on November 14, 2018 in Denver, Colorado. The public was welcome to provide comments, feedback and concerns through December 17, 2018.
While the proposed revisions to the New Source Performance Standards still need to be enacted and codified, these revisions are one of many steps the Trump administration has taken to reduce environmental regulations. If these modifications are passed into law, environmental attorneys would be required not only to take note of the changes in federal regulations, but they would also be wise to revisit state regulations that in the past were trumped by federal law.