Methane Emission Controls: Toward More Effective Regulation
41 Pages Posted: 8 Jun 2021
Date Written: June 4, 2021
In the United States, emissions to the air from the oil and natural gas sector are regulated by the Environmental Protection Agency New Source Performance Standards (NSPS). Unfortunately, the pace of emission reductions has been slow. In 2016, the Obama administration pledged to reduce methane emissions from the oil and gas sector by 40-45% by 2025, representing a compound annual decline rate of roughly 6%. However, the rate of methane emissions has changed slowly since the promulgation of natural gas emission control rules in 2012 and 2016, resulting in a compound annual decline rate of about 0.3%. This disappointing outcome is mainly the result of a narrow scope of regulation that has not confronted the realities of oilfield operations. Devised at a time when the technology for the measurement of natural gas emissions was relatively immature, performance-based regulations could not be implemented effectively. Therefore, NSPS regulations are either prescriptive or, if performance-based, lack means of verifying performance. Amendments promulgated in 2020 did little to change this situation. Thus merely reverting to the status quo ante, either by use of the Congressional Review Act or by conventional regulatory processes, will do little to improve the industry's environmental performance. Instead of proposing patchwork amendments to the current rules, which are outdated and ineffective, EPA should entirely rethink natural gas emission control. This paper analyzes why the rules were constructed as they were, examines the data that highlights the inadequacies of present regulations, explores the new technologies that have improved the prospects for effective regulation, and proposes a new, more efficient and effective regulatory regime.
Keywords: methane, greenhouse gas, regulation, Environmental Protection Agency
JEL Classification: K23, K32, Q35, Q54
Suggested Citation: Suggested Citation