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  • 14
  • March
  • 2017

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EPA Withdraws Request for Information About GHG Emissions From the Oil and Gas Industry

On March 2, 2017, EPA announced that it was withdrawing its information collect request (the “ICR”) asking owners and operators in the oil and natural gas industry to provide information on equipment and air emissions at existing oil and gas operations. The withdrawal is effective immediately, meaning owners and operators—including those who have received an extension to their due dates for providing the information—are no longer required to respond to the request. Unlike other actions taken by the prior administration’s EPA, such as final regulations promulgated in compliance with the Administrative Procedure Act (“APA”), the ICR could be withdrawn without notice and comment, because it was not a rule subject to APA procedures.

Background

Both methane and VOCs are constituents of natural gas, and methane is considered to be a greenhouse gas that is more potent than carbon dioxide. As a result, EPA has begun regulating these emissions from certain sources in the oil and gas industry.  For example, EPA promulgated a regulation—known as Quad Oa—limiting methane and VOC emissions from certain new, modified, and reconstructed facilities (including well sites and compressor stations).  EPA also announced plans to create an existing source performance standard program under Section 111(d) of the Clean Air Act.  As explained further in our October 2016 e-lert, EPA crafted this ICR under the Obama Administration as part of that effort.  The Obama Administration finalized the ICR last fall, and sent it to about 15,000 owners and operators in the oil and gas industry. The ICR required companies operating existing oil and gas facilities to provide information that EPA intended to use to develop comprehensive regulations requiring states to submit plans to reduce methane and VOC emissions from a broad range of existing oil and gas facilities. The ICR included two different surveys—one shorter survey for operators, and one longer survey specific to certain facilities.

Why Was The ICR Withdrawn?

In its announcement, EPA explained that it was withdrawing the ICR “because EPA would like to assess the need for the information that the agency was collecting through these requests, and reduce burdens on businesses while the Agency assesses such need.”  The Agency did not specify a timeframe for completing this assessment.  EPA also noted that the withdrawal follows  a March 1, 2017 letter that EPA received from nine state Attorneys General and the Governors of Mississippi and Kentucky, “expressing concern with the burdens on businesses imposed by the pending requests. EPA takes these concerns seriously and is committed to strengthening its partnership with the states.”

EPA previously estimated that 15,000 operators would have to fill out an operator survey, and that the entities representing almost 4,000 facilities will have to complete an additional and more lengthy facility survey that could require sampling and analysis. Owners and operators who received these letters were required to complete the surveys within the time periods set by EPA. EPA anticipated that responding to the ICR alone (operator and facility parts) would take a collective 245,481 hours to complete, at an estimated cost of $37,692,625 to the industry. EPA also estimated that completing the operator survey will cost $1,100 per operator, and that responding to the facility survey will cost around $5,600 per facility.

Why Does This Matter?

EPA already regulates methane and VOC emissions from certain new, modified, and reconstructed facilities in the oil and gas sector under regulations known as Quad O and Quad Oa. The Quad Oa rules were finalized this past year, and while they are expected to place a heavy financial burden on the oil and gas industry, they are at least limited to sources that are new, modified, or reconstructed after September 18, 2015, and do not impact existing (i.e., older) sources of emissions. Because there are far more existing facilities than new, modified, or reconstructed facilities in the oil and gas sector, expanding such requirements to these existing facilities would place a far greater economic burden on the industry.  Additional regulation for existing sources could place particular strain on operators of aging oil and gas assets operating at marginal profitability.  By withdrawing the ICR, the new Administration may be reconsidering the prior Administration’s plan to expand the regulation of methane and VOC emissions to existing facilities.

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Author

Andrew R. Stewart

Andrew R. Stewart Counsel