EPA Issues Final Rule on Methane Reduction

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The U.S. Environmental Protection Agency (EPA) announced on December 2, 2023, a final rule that will sharply reduce methane and other harmful air pollutants from the oil and natural gas industry, including from hundreds of thousands of existing sources nationwide, promote the use of cutting-edge methane detection technologies, and deliver significant economic and public health benefits. The final action was announced by Administrator Michael S. Regan and President Biden’s National Climate Advisor Ali Zaidi at COP28 in Dubai, United Arab Emirates (UAE), advancing President Biden’s historic climate agenda and day-one commitment to restore the United States’ global leadership on climate change. 

Oil and natural gas operations are the nation’s largest industrial source of methane, a climate “super pollutant” that is many times more potent than carbon dioxide and is responsible for approximately one-third of the warming from greenhouse gases occurring today. Sharp cuts in methane emissions are among the most critical actions the U.S. can take in the short term to slow the rate of climate change.

EPA’s final rule leverages the latest cost-effective, innovative technologies and proven solutions to prevent an estimated 58 million tons of methane emissions from 2024 to 2038, the equivalent of 1.5 billion metric tons of carbon dioxide – nearly as much as all the carbon dioxide emitted by the power sector in 2021. In 2030 alone, the expected reductions are equivalent to 130 million metric tons of carbon dioxide – more than the annual emissions from 28 million gasoline cars. The rule would achieve a nearly 80 percent reduction below the future methane emissions expected without the rule. These reductions are greater than what was projected for the 2022 and 2021 proposals, thanks to changes that strengthen provisions to limit wasteful, polluting flaring of natural gas and analytical updates that better capture the impacts of this rulemaking.

EPA’s estimates show the final rule will also protect public health by avoiding 16 million tons of volatile organic compounds from 2024 to 2038, along with 590,000 tons of toxic air pollutants like benzene and toluene. In this same timeframe, the rule will prevent wasteful leaks and other releases of about 400 billion cubic feet of valuable fuel each year – enough to heat nearly 8 million American homes for the winter. 

“On day one, President Biden restored America’s critical role as the global leader in confronting climate change, and today we’ve backed up that commitment with strong action, significantly slashing methane emissions and other air pollutants that endanger communities,” said EPA Administrator Michael S. Regan. “We’ve crafted these technology standards to advance American innovation and account for the industry’s leadership in accelerating methane technology. Thanks to robust public feedback and engagement with states, Tribes, companies and organizations, we are finalizing this historic action to reduce climate pollution, protecting people and the planet.” 

“As the world gathers to tackle the climate crisis, the U.S. now has the most protective methane pollution limits on the books. EPA’s limits on oil and gas methane pollution are a vital win for the climate and public health, dramatically reducing warming pollution and providing vital clean air protections to millions of Americans. With other countries also zeroing in on methane as a key climate risk, it’s a signal to operators worldwide that clean-up time is here,” said Fred Krupp, President of the Environmental Defense Fund. “EPA has shown tremendous leadership in establishing these leading clean air standards and we look forward to working with states and EPA to move quickly on implementation. The communities who fought long and hard for these protections now need to begin to reap their benefits.” 

The final rule leverages innovative technologies and proven solutions that leading oil-and gas-producing states and companies are using — and have committed to use — to reduce dangerous air pollution. Building on two proposed rules issued in November 2021 and December 2022, the final requirements also incorporate feedback and information that EPA received through nearly 1 million public comments, as well as extensive engagement with a broad range of stakeholders. This public input helped the Agency develop rigorous and commonsense standards that will slash methane emissions and incentivize innovation, recover natural gas that otherwise would be wasted, and provide industry with adequate time and flexibility to comply in a cost-effective manner.

The final rule includes several important updates to requirements the agency had proposed in 2021 and 2022, both to secure additional methane reductions and to ensure industry has time to obtain the pollution control equipment needed to comply. It also provides additional flexibilities to encourage use of advanced technologies such as aerial screening, sensor networks, and satellites that help operators find and fix leaks more quickly.

The final rule includes a comprehensive suite of pollution reduction standards that address the largest sources of methane and other harmful pollutants at oil and gas facilities, including methane that leaks or is vented from equipment and processes. Among other things, the final rule will:

•  phase in a requirement to eliminate routine flaring of natural gas that is produced by new oil wells;

•  require comprehensive monitoring for leaks of methane from well sites and compressor stations, while giving oil and gas companies flexibility to use low-cost and innovative methane monitoring technologies; and

•  establish standards that require reductions in emissions from high-emitting equipment like controllers, pumps, and storage tanks.

In addition, the final rule includes a Super Emitter Program that will utilize third-party expertise in remote sensing to detect large methane releases or leaks known as “super emitters,” which recent studies have indicated account for almost half of methane emissions from the oil and gas sector.

The rule also clarifies how states can use their existing programs in plans for limiting methane emissions from existing sources and gives states two years to submit their plans for EPA approval.

EPA’s final rule will work hand in hand with the Methane Emissions and Waste Reduction Incentive Program in the Inflation Reduction Act to cut emissions of methane from the oil and natural gas industry.

EPA estimates that the final rule will yield total net benefits of $97 to $98 billion dollars from 2024-2038 ($2019), or $7.3 to $7.6 billion a year, after taking into account the costs of compliance and savings from recovered natural gas. These estimates account for climate benefits and some health benefits from reduced ozone exposure, but do not account for the rule’s full health benefits of reducing other forms of harmful air pollution. The rule will result in increased recovery of natural gas, valued at $7.4 to $13 billion from 2024-2038 ($2019), or $820 to $980 million a year.

These climate benefits are estimated using EPA’s most recent analysis of the social cost of greenhouse gases (SC-GHG), a metric that represents the monetary value of avoided climate damages associated with a decrease in emissions of a greenhouse gas. Following peer review in May 2023, EPA finalized its technical report on the updated SC-GHG estimates reflecting recent advances in the science on climate change. This report, which also addressed recommendations of the National Academies of Science, Engineering, and Medicine, was used to value emissions reductions in this final rule. 

Read the final rule and view the fact sheet.