Oil and Gas New Source Performance Standards (NSPS)
Notices of Data Availability on Proposed
3-Month Stay and 2-Year Stay
Update: Delay and Reconsideration of Oil and Gas Methane Rule
The Trump EPA has proposed to delay and is reconsidering key elements of standards to cut methane, smog-forming pollutants, and toxic air pollution from new, reconstructed and modified facilities in the oil and gas sector. Administrator Scott Pruitt on February 23, 2018, signed a notice amending two provisions addressing fugitive emissions requirements in the 2016 rule in response to comments on the proposed stays. As of March 1, the agency continued to consider the proposed delays; for updates see the agency's web page. The Fall 2017 Unified Agenda of Regulatory and Deregulatory Actions calls for a proposed rule on reconsideration of the standards in August 2018, and a final rule in September 2019.
Notices of Data Availability on Delay Proposals
Public Comment Closed December 8, 2017
Find the NODAs and the new cost estimate here:
NODA concerning the three-month stay: EPA-HQ-OAR-2017-0346
NODA concerning the two-year stay: EPA-HQ-OAR-2010-0505
What’s at Risk, Talking Points and What You Can Do
In June 2017, the Trump Administration proposed to delay certain air pollution control requirements for the oil and natural gas industry while the EPA reconsiders issues associated with these requirements. The standards at risk, called New Source Performance Standards or (NSPS), would control methane emissions and some related toxic air pollutants at new, reconstructed and modified oil and gas sources. EPA finalized these requirements in May 2016.
The Trump Administration proposed two alternative delays -- a two-year stay, and a three-month stay, of the NSPS’s requirements. These proposed delays (or stays) would apply to the fugitive emissions requirements, well site pneumatic pump standards, and requirements that closed vent systems be certified by a professional engineer. The public comment period on the proposed stays closed on August 9, 2017; many of you may have commented on that proposal. (For more information, see Defending Air Pollution Standards for the Oil & Gas Sector(Methane and VOCs).
In November 2017, EPA issued two notices of data availability, “NODAs,” inviting additional public comment on the two proposed stays. The NODAs identify concerns and suggestions from certain industry stakeholders. Public comment was invited in three categories:
- EPA’s legal authority to issue the stays
- Stakeholder concerns about the challenges of meeting the requirements of the 2016 NSPS within the timeframe of the stays
- An updated economic analysis that provides the costs and benefits of the two-year stay
We offer talking points for categories 2 and 3 below. We do not address EPA’s legal authority to issue the stays.
About the Methane Standards
In May 2016, EPA issued final New Source Performance Standards, or NSPS for the oil and natural gas sector to control methane emissions and some related toxic air pollutants at new reconstructed and modified sources. EPA finalized these requirements in May 2016.
The new standards are designed to achieve significant reductions in methane emissions from new, reconstructed and modified processes and equipment used in oil and natural gas extraction and production. (For regulatory geeks: the rule applies to well site pneumatic pump standards; fugitive emissions; and requires that closed vent systems be certified by a professional engineer.)
The rule will also reduce smog-forming and toxic emissions of volatile organic compounds (VOCs) from sources such as fracking (hydraulically fractured oil wells) that were not covered by earlier standards.
This EPA rule to control methane emissions from the new sources in the oil and gas industry nationwide is similar to the BLM’s rule to control methane emitted from new and existing oil and gas operations on federal and Indian lands. The public comment period on the Trump Administration’s proposal to delay implementation of the BLM rule closed on November 6, 2017. For more information see Defending the Methane and Waste Prevention Rule
Summary of the Notices of Data Availability (NODAs)
The NODAs offer additional arguments to bolster the Trump Adminstration’s case that the agency has legal authority to stay the 2016 rule. The agency is seeking public comments on feedback it received from certain stakeholders in the earlier comment period, as well as comments on the arguments advanced in the NODAs.
When EPA proposed to stay the rule, certain requirements were stayed and others were left in place. During the comment period, a number of stakeholders commented about the challenges of meeting certain requirements within the allotted time. In response to these concerns, EPA is asking for comments on whether to establish or extend phase-in periods instead of a stay. The phase-in periods would be timed to ensure that adequate trained personnel and equipment are in place to meet the new requirements.
The NODA also includes a new economic analysis. When the 2016 rule was issued, EPA estimated that the annual cost of the rule, $530 million, was outweighed by the estimated annual climate benefits of $690. EPA’s analysis pointed out that other pollutants, including air toxics and volatile organic compounds would also be reduced, (yielding additional benefits), but that EPA was not able to estimate the value of those additional benefits. The economic analysis contained in the Trump Administration’s June proposal to delay this rule included estimated cost savings (mostly to industry) from ing implementation, but did not include climate benefits that would be lost due to emissions continuing during the 3 months to two years that the rule would be stayed.
In the new economic analysis discussed in the NODA, total cost savings from the two-year delay are calculated to be $270 million to $280. The NODA also has included a new calculation of the forgone benefits due to continued emissions during this two year period. In its calculation of foregone benefits, the Trump Administration counts only the climate benefits that would occur in the United States. However, U.S. emissions affect the climate worldwide, and only a fraction of the resulting benefits occurs in the United States. The result of considering only domestic benefits is that the forgone benefits, estimated at $11 million to $37 million, are presented to be less than the costs that would accrue to industry. This is a misleading result because if all countries were to make climate pollution control decisions based on comparing domestic benefits with costs, dangerous climate change would proceed largely unabated and all countries – including the U.S. -- would suffer serious harm.
Talking points on the proposed delays which underlie the NODAs
Summary: The delay in implementation of the 2016 rule will result in more pollution and wasted energy even if after the delay is over, the rule is allowed to be implemented. The 2016 rule had significant net benefits (estimated benefits that exceeded the estimated costs). By staying the 2016 NSPS the public will give up significant benefits.1
The oil and gas industry is a significant source of emissions of methane, a potent greenhouse gas with a global warming potential more than 25 times that of carbon dioxide.2
It also is the largest industrial source of emissions of volatile organic compounds (VOCs), a group of chemicals that contribute to the formation of ground-level ozone (smog). Exposure to ozone is linked to a wide range of health effects, including aggravated asthma, increased emergency room visits and hospital admissions, and premature death. In addition, many VOCs are toxic to humans.
Methane leaks are expensive. Total methane emissions across the oil and gas sector are said to be worth $1.8 billion.3
Fixing methane leaks is not expensive. In a survey done in Colorado gaging the industry’s reaction to that state’s methane rule most (seven in ten) thought the benefits outweighed the costs and only one in ten thought that the cost was a lot more than the benefit to the company.4
Efforts to cut methane waste has also put American entrepreneurs to work creating innovative, cutting-edge technologies to make it economically feasible for the oil and gas companies achieve reductions. There are at least 76 American firms in the methane mitigation industry at 531 locations in 46 states with 102 manufacturing sites.5
Talking points on the new economic analysis contained in the NODAs
In its new economic analysis, EPA estimates the foregone benefits that would result from delay of the 2016 rule. But in doing so, EPA only considers climate benefits that would occur in the United States. EPA ignores the damage our pollution causes around the globe. This approach is both wrong-headed and contrary to American values.
EPA’s new economic analysis fails to recognize a basic fact about greenhouse gases such as methane: that a ton of methane emitted from any location or source in the world causes harm across the globe.
As a result, our future depends on action taken by all countries. We need other countries to account for the damage their pollution causes to our country, and so we must account for damage our pollution does abroad. If other countries count only the domestic benefits of cutting climate-changing emissions, their leaders will likely decide to make only modest emission reductions, and all countries – including the U.S. -- will suffer serious harm from climate change.
Considering only the domestic benefits of climate change is akin to what economists call a “tragedy of the commons,” in which individual users of a shared resource – in this case, the limited capacity of the earth to handle climate pollutants – take actions that are in their own self-interest, but are contrary to the common good because they collectively deplete the resource. Under a domestic-only benefits approach, individual countries acting only in their own perceived self-interest would fail to require sufficient action to safeguard the collective good of the whole. Only when countries recognize that their own interest depends on the good of the whole can the tragedy of dangerous climate change be mitigated.
Finally, ignoring international impacts is foolhardy because the effects of climate change are potentially destabilizing, making the world more dangerous and harming U.S. national security. Similarly, our national economies are independent; for example, if climate change makes other nations poorer, they will have less money to buy U.S. goods.
What You Can Do
It would be great if well-reasoned, fact-based comments were enough to win the day, but in today’s deregulatory environment, raising the political stakes of regulatory rollbacks is crucial to stopping or slowing them down. Submitting comments is a good first step. For rules that are particularly important to you, please consider taking one or more of the following steps, too.
- Write to your members of Congress and other elected officials. Let them know your concerns and ask them to weigh in with the agency proposing the rollback.
- Write letters to the editor and even op-eds in your local papers.
- Organize or participate in letter-writing campaigns.
- Join or organize demonstrations.
- Talk to your friends, colleagues and neighbors and encourage them to comment and otherwise join in this effort. Voicing your concerns on social media can be a very effective way to spread the word.
Links for More Information
Original 2015 EPA methane rule: https://www.epa.gov/controlling-air-pollution-oil-and-natural-gas-industry/2012-final-rules-oil-and-natural-gas-industry
- Regulatory Impact Analysis of the Final Emission Standards for New and Modified Sources in the Oil and Natural Gas Sector. May 2016.
- https://www.regulations.gov/document?D=EPA-HQ-OAR-2010-0505-7630 Different greenhouse gases (GHGs) can have different effects on the Earth's warming. Global Warming Potential (GWP) was developed to allow comparisons of the global warming impacts of different gases. These metrics may differ based on timeframe, the climate endpoint measured, or the method of calculation. The metric used here is over a 100 year period but scientists have other metrics as well. Another commonly used metric is that methane 86 times more potent than CO2 over a 20-year period. See https://www.epa.gov/ghgemissions/understanding-global-warming-potentials#Learn%20why for a discussion.
- Datu Research, The Emerging U.S. Methane Mitigation Industry, October 2014. Based on EPA’s 2014 emissions inventory of 7.7m metric tons, multiplied by the 12-month average Henry Hub gas price from August 2013-September 2014 per the EIA of $4.38/mcf.
- Memo from Chris Keating, Keating Research, for the Center for Methane Emissions Solutions, The Colorado Case Study on Methane Emissions: Conversations with the Oil and Gas Industry, April 10, 2016. https://mail.google.com/mail/u/0/#inbox/15d5c6748d609a6e?projector=
- Datu, op.cit., p.23