Status of Methane Regulation in the United States

Patrick Parenteau
Professor of Law, Vermont Law School

Curbing methane is a key part of President Obama’s Climate Action Plan, which aims to cut emissions by 40 to 45% from 2012 levels by 2025. Methane is a very powerful greenhouse gas. Methane traps 86 times more heat than carbon dioxide over a 20-year period and is 34 times more potent as a greenhouse gas than CO2 over 100 years because methane doesn’t stay in the atmosphere methane imageas long as CO2. If the policy goal is to avoid the dangerous tipping points that have been identified by climate scientists the shorter timeframe is the more relevant for regulatory purposes.

The oil and gas industry is the second leading source of methane emissions in the US.[1]  In August, EPA proposed rules that, together with existing regulations, would curb emissions by 20 to 30 percent below 2012 levels by 2025.[2]  The proposed rules, issued under section 111(b) of the Clean Air Act,[3]  would amend the new source performance standards (NSPS) for the oil and natural gas source category by setting standards for both methane and volatile organic compounds (VOC) for certain equipment, processes and activities.[4]

These first ever federal limits on methane emissions from oil and gas operations would require operators of new or significantly modified facilities to reduce leaks from well sites, transmission pipelines, storage equipment and other facilities. More than half of the methane leakage from natural gas comes from drilling sites and gas processing plants (upstream emissions), with the remainder coming from pipelines and storage systems (downstream emission). There are conflicting studies on whether methane emissions are higher for hydraulic fracturing of shale gas than conventional natural gas production.[5]

Reaction to EPA’s proposal has been predictably mixed. The American Petroleum Institute has said the regulations are unnecessary, duplicative and would cost $1 billion by 2025. But according to a 2014 study commissioned by the Environmental Defense Fund sources in existence prior to 2012 are projected to be responsible for up to 90 percent of emissions in 2018. The study estimates that industry could cut methane emissions by 40 percent below projected 2018 levels at an average annual cost of less than one cent per thousand cubic feet of produced natural gas, which today sells for about $3.

Advocates for stronger action question why EPA did not at least signal that it would follow up with rules to cover existing sources. EPA’s reluctance to tackle the much tougher and costlier problem of retrofitting existing sources may be due in part to potential legal risks. Existing sources would have to be regulated under section 111(d), the same provision used to promulgate the Clean Power Plan, which has been challenged on the ground that, inter alia, section 111(d) does not authorize regulation of sources regulated under section 112. The same argument could be made with respect to the facilities subject to the proposed methane rule.

The Supreme Court has stayed the Clean Power Plan pending the outcome of the litigation currently underway in the DC Circuit and scheduled for argument on June 2. The stay could remain in effect until the Court has finally disposed of the case. The death of Justice Antonin Scalia has introduced yet another complication into the process, fueling speculation that there could be a 4-4 split should the case reach the Court before the vacancy is filled. The fate of rules regulating both carbon and methane under 111(d) may well hinge on the outcome of the November elections and who wins the White House.

EPA is also requiring operators to find and repair leaks which can be a significant source of both methane and VOC pollution. A recent study found that facilities that collect and gather natural gas from well sites across the United States emit about one hundred billion cubic feet of natural gas a year or roughly eight times the previous estimates by the EPA for this segment of the industry. The emissions identified in the study carry the same 20-year climate impact as 37 coal-fired power plants. Including these emissions in the GHG Inventory would increase it by 25 percent.

Methane leakage can vary greatly from site to site depending on the geology, the technologies and practices companies use to capture the methane, the age and condition of pipelines, and other factors. More research is needed to identify the true magnitude of these fugitive emissions and the corresponding climate risk.

Two types of studies have been done to estimate leaks. “Top down” studies using airplanes and satellites, have found extremely high leak rates of methane from oil and gas fields. For example a study of the Uintah Basin in Utah found that methane leaks were up to 11% higher than industry estimates. Bottom-up studies, done at the ground level, have found lower leak rates.

A recently published study that synthesizes both approaches concludes that emissions of methane from the oil and gas industry vastly exceed EPA estimates. The study finds that daily leaks of methane from oil and gas wells in Texas’ Barnett Shale equals the annual emissions of 8,000 cars. Data like this make a strong case that existing sources must be addressed sooner rather than later.

Reducing methane emissions from the oil and gas sector is of critical importance to climate mitigation strategies. The best available science indicates that leakage rates must be kept below 3.2% or gas plants will actually be worse for the climate than coal fired plants. Even under the best of circumstances, with virtually no methane leaks, natural gas is at best a stop gap measure that must peak by 2030 if the goal of climate stabilization is to be achieved.[6]


[1] EPA, Overview of Greenhouse Gases, (last visited December 7, 2015)

[2] 80 Federal Register 56593 (September 18, 2015); to be codified at 40 CFR Part 60, Subpart 0000

[3] Since methane is neither a criteria pollutant under section 108 nor a hazardous air pollutant under section 112, it must be regulated under the “catchall” provision of section 111.

[4] Both methane and VOC’s are reduced by using the same emission control strategies. EPA has proposed that the “best system of emission reduction” (BSER) is the same as the BSER for VOC’s under the 2012 NSPS for the oil and gas industry. 40 CFR Part 60, Oil and Natural Gas Sector: Reconsideration of Additional Provisions of New Source Performance Standards.

[5] See, Robert W. Howarth, Renee Santoro, Anthony Ingraffea, “Methane and the greenhouse-gas footprint of natural gas from shale formations,” Climatic Change (2011) 106:679–690; available at ; Argonne National Laboratory. “Analysis shows greenhouse gas emissions similar for shale, crude oil.” Science Daily (15 October 2015); available at

[6]. Darryl Banks and Gwynne Taraska, Center for American Progress, “U.S. Natural-Gas Use Must Peak by 2030,” (2013); available at


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