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EPA Releases Energy Requirement Reductions

Tuesday, August 18, 2020

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Last Friday, U.S. Environmental Protection Agency Administrator Andrew Wheeler announced two final rules for the oil and gas industry that the EPA says “removes ineffective and duplicative requirements while streamlining others.”

Wheeler made the announcement at the Energy Innovation Center in Pittsburgh, with U.S. Department of Energy Deputy Secretary Mark W. Menezes, U.S. Congressman Guy Reschenthaler (PA-14) and EPA Mid-Atlantic Regional Administrator Cosmo Servidio.

The Rules

According to the EPA, these rulemakings will reduce regulatory burdens for oil and gas entities while protecting human health and the environment. Combined, the two final rules are estimated to yield net benefits of $750-850 million from 2021 to 2030, the annualized equivalent of about $100 million a year.

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Last Friday, U.S. Environmental Protection Agency Administrator Andrew Wheeler announced two final rules for the oil and gas industry that the EPA says “removes ineffective and duplicative requirements while streamlining others.”

“EPA has been working hard to fulfill President Trump’s promise to cut burdensome and ineffective regulations for our domestic energy industry,” said Wheeler. “Regulatory burdens put into place by the Obama-Biden Administration fell heavily on small and medium-sized energy businesses. Today’s regulatory changes remove redundant paperwork, align with the Clean Air Act, and allow companies the flexibility to satisfy leak-control requirements by complying with equivalent state rules.”

The two rules are referred to as “the policy package” and “the technical package.”

The policy package rule:

  • Determines that the Obama EPA’s addition of the transmission and storage segment was improper;
  • Removes it from the regulation while also rescinding emissions standards for that segment;
  • Makes clear that oil and gas operators will still be required to reduce emissions of ozone-forming VOCs in the production and processing segment of the industry;
  • Removes methane control requirements for the production and processing segments (because of redundancy); and
  • Establishes EPA’s position that the Clean Air Act requires EPA to make a finding that a pollutant contributes significantly to air pollution before setting requirements.

The technical package rule:

  • Exempts low-production wells from expending significant funds to monitor;
  • Reduces monitoring of leaks at gathering and boosting compressor stations from quarterly to twice a year a more cost-effective approach that also aligns with other monitoring requirements;
  • Improves cooperation with states by allowing industry to meet certain states’ requirements instead of complying with EPA’s requirements;
  • Removes burdens to utilize new and more efficient emissions reductions technologies to allow industry to innovate;
  • Updates the required schedule for repairing leaks to respect the realities of the oil and gas industry; and
  • Changes recordkeeping and removes certain reporting requirements.

According to the EPA, the rule changes were in response to President Donald J. Trump’s 2019 Executive Order: Promoting Energy Infrastructure and Economic Growth, which directed the EPA to review and, if appropriate, revise Oil and Natural Gas New Source Performance Standards.

Other Energy Changes

At the beginning of June, Wheeler announced a different rule in response to the EO, focused instead on the Clean Water Act.

“EPA is returning the Clean Water Act certification process under Section 401 to its original purpose, which is to review potential impacts that discharges from federally permitted projects may have on water resources, not to indefinitely delay or block critically important infrastructure,” said Wheeler at the time.

According to Wheeler, the final rule moves to “curb abuses of the Clean Water Act that have held our nation’s energy infrastructure projects hostage, and to put in place clear guidelines that finally give these projects a path forward.”

With the updated ruling, states are now no longer able to use the law to object to projects “under the auspices of climate change.”

The final rule now:

  • Specifies statutory and regulatory timelines for review and action on a Section 401 certification—requiring final action to be taken within one year of receiving a certification request;
  • Clarifies the scope of Section 401, including clarifying that 401 certification is triggered based on the potential for a project to result in a discharge from a point source into a water of the United States. When states look at issues other than the impact on water quality, they go beyond the scope of the Clean Water Act;
  • Explains EPA’s roles under Section 401;
  • Reaffirms the agency’s statutory responsibility to provide technical assistance to any party involved in a Section 401 water quality certification process; and
  • Promotes early engagement and coordination among project proponents, certifying authorities and federal licensing and permitting agencies.

Some believe that the EPA will have a difficult time should the ruling be legally challenged, as the Supreme Court explicitly affirmed states’ authority to impose conditions on projects based on state law in 1994.


Tagged categories: EPA; EPA; Good Technical Practice; Government; Laws and litigation; NA; North America; Oil and Gas

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