The Legal Framework for Federal Methane Regulation

Updated September 5, 2023

The Legal Framework for Federal Methane Regulation

Methane is a greenhouse gas with 25 times the warming

capacity of carbon dioxide. Methane makes up about 11%

of all greenhouse gas emissions in the United States.

Primary sources of methane include oil and gas production,

transportation and storage (methane is the main component

of natural gas), landfill gases, coal mines, and agricultural

practices. Methane emissions are primarily regulated under

the Clean Air Act (CAA) but may also be regulated

pursuant to other statutory authorities.

Oil and Gas Industry Methane Regulations Under

the CAA

Gas and oil production, transportation, and storage account

for about 32% of methane emissions in the United States.

On November 15, 2021, EPA released a proposed rule that

would establish NSPS and emissions guidelines for the oil

and gas source category for methane emissions. 86 Fed.

Reg. 63,110. On November 22, 2022, EPA released a

supplemental proposed rule.

This In Focus summarizes existing federal authority to

regulate methane emitted from all sources except

agricultural sources. Methane emitted by agricultural

sources is addressed primarily through voluntary programs

and is thus outside the scope of this In Focus.

If EPA promulgates the proposed rule without changes, it

would regulate methane in two significant ways. First, it

would require most onshore oil and gas production facilities

to stop venting and flaring methane—that is, releasing or

burning methane as a waste byproduct of the production

process. Facilities would be required to capture the methane

and either route it to a pipeline that would deliver the gas

for commercial use or use it onsite as a fuel source. If

neither option were available, the rule would permit

continued flaring of methane but would require a 95%

emissions reduction and additional monitoring and

reporting requirements.

Clean Air Act

Section 111 of the CAA (42 U.S.C. § 7411) directs the

Environmental Protection Agency (EPA) to regulate

emissions from certain categories of stationary sources that

emit any pollutant that EPA has determined “causes, or

contributes significantly to, air pollution which may

reasonably be anticipated to endanger public health or

welfare.” EPA has identified methane as an air pollutant,

and it has listed oil and gas production, transportation and

storage facilities, and municipal solid waste landfills as

source categories that emit methane.

Once EPA identifies a source category as contributing to

pollution that may endanger public health and welfare,

Section 111 requires EPA to develop New Source

Performance Standards (NSPS) to regulate emissions from

newly constructed, modified, or reconstructed sources in

that source category. Section 111 also requires EPA to

develop emissions guidelines for pollutants from existing

sources in categories for which EPA develops NSPS so

long as the pollutant to be regulated is not already regulated

pursuant to another provision of the CAA. NSPS and

emissions guidelines represent the level of emissions

reduction achievable by the application of the best system

of emission reduction (BSER) as determined by EPA.

Sources may achieve emissions reductions any way they

see fit so long as emissions reductions are equal to the

reductions achievable by the BSER identified by EPA.

Where individual states have EPA-approved State

Implementation Plans (SIPs), states implement NSPS.

Otherwise, implementation of NSPS falls to EPA.

Individual states implement emissions guidelines through

SIPs that must be approved by EPA. In the event a state

does not submit an emissions guideline SIP, EPA must

develop one for the state. Performance standards and

emissions guidelines are then included in an individual

source’s CAA permit.

Second, the rule would impose expanded methane leak

detection standards on oil and gas production equipment

and compressor stations by expanding the number of

components checked for leaks and increasing the frequency

of monitoring. The supplemental proposal includes a matrix

for periodic and continuous emissions screening with

varying detection thresholds and monitoring frequencies.

Higher detection thresholds require more frequent

monitoring.

The supplemental proposal also includes a “Super-Emitter

Response Program” for emissions of 100kg/hr or greater. If

such an event is detected, the owner or operator would be

required to identify the cause of the leak within five days

and plug the leak within ten days.

The proposed rule would also promulgate emissions

guidelines for existing sources that largely track the

limitations in the NSPS for new sources.

Municipal Solid Waste Landfill Methane

Regulations Under the CAA

Landfills account for approximately 17% of methane

emissions in the United States. EPA promulgated a new

NSPS for municipal solid waste landfills in 2016. 81 Fed.

Reg. 59,276. The 2016 rule amended an earlier NSPS

issued in 1996. The 2016 rule applies to landfills built,

modified, or reconstructed after July 17, 2014, with a

design capacity of at least 2.5 million metric tons.

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The Legal Framework for Federal Methane Regulation

The rule reduced the threshold for when a landfill has to

capture landfill gases from fifty metric tons per year of nonmethane organic compounds to thirty-four metric tons. The

rule also altered monitoring requirements and expanded

approved uses for landfill gas.

Emissions guidelines for existing municipal solid waste

facilities largely tracks the limitations in the NSPS for new

landfills with the notable exception that the guidelines kept

the threshold for capturing landfill gasses at fifty metric

tons for closed landfills.

Forty-two states have yet to submit a SIP. On May 21,

2021, EPA issued a new final rule creating a federal

implementation plan for states that have yet to submit a SIP

and issuing new regulations for states to submit SIPs after

the federal plan is in place. 86 Fed. Reg. 27,756.

Infrastructure Investment and Jobs Act

EPA estimates that coal mines (active, inactive, and

abandoned) account for about 8% of methane emissions

nationally. EPA does not currently regulate coal mine

methane emissions. The agency maintains an outreach

program to encourage the capture and use of methane

emissions from coal mines.

The Infrastructure Investment and Jobs Act appropriated

$11.3 billion to reclaim abandoned mine lands. Reclaiming

abandoned mines includes filling in the mine to

approximate the contour of the land prior to mining and

replanting native vegetation, crops, or trees. According to

the White House, reclaiming abandoned mine lands may

help reduce methane emissions from abandoned mines.

Mineral Leasing Act

The Mineral Leasing Act (MLA) governs the development

of oil and gas on federal lands. The MLA gives the

Department of the Interior (DOI) the authority to set royalty

rates for oil and gas produced on federal land. In 2016, the

Bureau of Land Management (BLM), an agency within

DOI, issued a regulation pursuant to Section 189 of the

MLA that would have imposed royalties on all gas

produced on federal land (including gas that was vented or

flared) and would have thereby increased the amount of gas

subject to royalty payments. That rule, however, was

vacated by a federal district court in Wyoming. The court

found that BLM lacked the statutory authority to

promulgate the rule because its purpose was to regulate air

pollution, but regulation of air pollution is committed to

EPA. Although methane is therefore not currently regulated

under the MLA, Section 50263 of P.L. 117-169 (commonly

referred to as the Inflation Reduction Act of 2022 [IRA]),

largely mirrors the vacated BLM rule.

PIPES Act of 2020

The PIPES Act imposes stricter standards for natural gas

pipeline leak detection and repair, requiring repair of all

leaks hazardous to human safety or the environment or with

the potential to become hazardous. The Pipeline and

Hazardous Materials Safety Administration has initiated a

rulemaking process to implement the stricter leak detection

standards. The proposed rule has yet to be released.

Inflation Reduction Act of 2022

Section 50263 of the IRA requires DOI to include in all oil

and gas leases issued after enactment of the IRA a provision

requiring lease holders to pay royalties on all natural gas

produced on federal land and on the outer continental shelf,

including gas lost due to venting, flaring, or negligence.

The statute displaces BLM guidance that permitted royaltyfree venting and flaring of methane in certain

circumstances. The statute makes exceptions for

emergencies, gas used on site, and gas that is unavoidably

lost. The statute effectively supersedes the federal district

court decision that vacated the BLM methane waste

prevention rule discussed above.

Section 60113(c) of the IRA amended the CAA to direct the

EPA to collect a charge from owners or operators of oil and

gas infrastructure (except distribution lines) for wasted

methane emissions. The provision applies to the following

categories of covered facilities:

1.

2.

3.

4.

5.

6.

7.

Offshore petroleum and natural gas production,

Onshore petroleum and natural gas production,

Onshore natural gas processing,

Onshore natural gas transmission compression,

Underground natural gas storage,

Liquefied natural gas storage,

Liquefied natural gas import and export

equipment,

8. Onshore petroleum and natural gas gathering and

boosting, and

9. Onshore natural gas transmission pipeline.

The provision applies only to listed facilities that emit more

than 25,000 metric tons of carbon dioxide equivalent per

year. Facilities are charged for emissions in excess of a

threshold set in the statute. The charge is initially set to

$900 per metric ton of methane emitted above the relevant

threshold and rises to $1,500 per metric ton of methane

after two years. Different thresholds are set for different

categories of facilities. Facilities that comply with future

CAA methane regulations, such as the proposed NSPS and

emissions guidelines for the oil and gas source category, are

exempt from the charge. The IRA directs EPA to determine

whether facilities are exempt from the charge.

Offshore Oil and Gas Methane Emissions

The two IRA provisions mentioned above apply to offshore

oil and gas production. The Bureau of Ocean Energy

Management and the Bureau of Safety and Environmental

Enforcement, however, do not currently regulate methane

emissions from offshore oil and gas production. Further, 42

U.S.C. § 7627, which explicitly authorizes EPA to regulate

offshore sources, does not apply to the North Slope

Borough in Alaska and in the Gulf of Mexico, except for

the Florida Gulf Coast. Offshore oil and gas operations not

subject to EPA’s regulation will not be eligible for the

methane charge exemption in the IRA.

Benjamin M. Barczewski, Legislative Attorney

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IF12217

The Legal Framework for Federal Methane Regulation

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