Regulations

The EPA has established minimum emissions standards and monitoring requirements. For existing facilities, states are responsible for implementing and enforcing these standards at a minimum. Some states have chosen to exceed the federal standards in their implementation plan.

The EPA recently updated these rules to establish a ​“Super Emitter Reporting Program” as an avenue for certified third parties to report large emissions. Any operator reported through this program is legally required to investigate the emission and fix any found leaks.

This program aims to track human-driven sources of greenhouse gas emissions across all industries in the US. Reporting requirements regarding methane emissions for oil and gas operators are outlined in Subpart W of the EPA mandatory reporting code.

As part of the GHGRP, the EPA produces an annual Greenhouse Gas Inventory (GHGI). The EPA recently proposed an update to its collection methodology for the GHGI that will require operators to not only report any emission greater than the threshold outlined in Subpart W, but also to provide a start and end date for each emission. If the operator cannot prove the start date, the EPA will assume a leak duration of 182 days. Leak duration is an important part of the fee calculation for Waste Emissions Charges.

While the rule is still being finalized, we believe it is prudent to assume the final rule will largely resemble the proposed rule with a few key changes that will allow greater flexibility in the technologies allowed to satisfy monitoring and reporting requirements.

The Inflation Reduction Act (IRA) established a Methane Emission Reduction program that levies fees against emissions that exceed sector-specific methane emission intensity targets. Facilities — defined as all sites within a region — reporting more than 25,000 mt CO2e of greenhouse gasses emitted per year to the Greenhouse Gas Reporting Program (GHGRP) are considered WEC-applicable facilities.

Fees begin at $900 per metric ton of methane over the threshold for emissions occurring in 2024. They will increase to $1,200 per metric ton for emissions occurring in 2025 and $1,500 per metric ton for emissions occurring in 2026 and beyond.

Operators can ​“net” emissions across their business — meaning higher-emitting facilities could offset emissions against lower-emitting facilities owned by the same company. When all State Implementation Plans (SIPs) have been approved and implemented (likely between 2025 and 2028), some facilities can qualify for exemptions by complying with the monitoring requirements outlined in EPA OOOOb/​c. 

Though Subpart W, OOOOa/​b/​c, and the Inflation Reduction Act are separate rules and regulations, understanding their interconnectivity is key to ensuring compliance and reducing fee exposure.

All known leaks must be reported under GHGRP Subpart W. Prior to 2023, the GHGI was based solely on operator-reported emissions data. With the newly established Super Emitter Reporting Program under the EPA OOOOb rule, operators are at risk of having their leaks detected and reported by third parties. Should this happen, and if the operator cannot prove when the leak started, they will be charged fees for the default maximum 182 day period.

The U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) is a sub-agency of the U.S. Dept. of Transportation. PHMSA is charged with developing and enforcing regulations for the safe and reliable transportation of energy and other hazardous materials. Midstream companies are subject to PHMSA regulations, in addition to EPA regulations.

The PHMSA ​“Mega Rule” is a collection of rules with a wide-reaching scope. There are two key provisions related to methane emissions detection: 
1) Annual incident (leak) reporting requirements 
2) Annual leak survey requirements for certain pipelines, including Class 1 Type C pipelines greater than 8.625”

While this rule is still in the proposed state, the final rule will mandate additional annual inspection requirements for Type C pipelines greater than 8.625” in diameter. The current proposal requires ground inspections using highly sensitive, impractical visual inspection equipment. Insight M and other advanced remote detection technology providers are advocating strongly for more choice in conducting these inspections, as the initial proposal would be extremely inefficient and costly to implement — and it would almost certainly result in less methane mitigation.

Our Regulations team is connected and engaged in the regulatory process. By sharing our deep knowledge of our customers’ realities in the field, we help shape regulations so that operators can achieve the aim of the regulation — mitigating emissions — using a detection strategy that is safe, efficient, and practical for their unique assets and goals.

We track regulations in real time, and we are always available to offer perspective and recommendations. You can consider Insight M your go-to resource for understanding the impact of regulatory changes on your operations.