Successful methane strategy with the new EPA Methane Rule

Oil and gas upstream and midstream companies are dealing with an increasingly complex landscape of environmental regulations, combined with numerous other business challenges including major gas price fluctuations—hitting lows we haven’t seen since 1990. It has never been more important to think strategically about your methane monitoring program to ensure maximum value while complying with EPA’s new regulations.

The EPA published its final Methane Rule for the oil and natural gas industry in the Federal Register in early March 2024. Part of this rule adds monitoring and reporting requirements, as well as an avenue for third parties to report ​“super emitters,” to the existing reporting required by the Greenhouse Gas Reporting Program (GHGRP) Subpart W. All of these emissions could be subject to fines under the separate, but related, Waste Emissions Charge (WEC) rule — the EPA regulation implementing part of the Inflation Reduction Act. 

With these regulations now final, oil and gas companies need to rethink their methane program to account for these intertwined requirements. The key insights below — gathered from conversations with customers, regulators, and industry-leading researchers — explain how the Methane Rule, WEC fees, and other regulations will work together and how oil and gas companies can go beyond compliance to create a successful methane strategy. 

The basics of the Methane Rule

The Methane Rule is broken into two sets of new standards:

• Subpart OOOOb defines New Source Performance Standards (NSPS) applicable to facilities that are constructed, modified, or reconstructed after December 6, 2022.
• Subpart OOOOc lays out the presumptive standards for the state implementation plans (SIPs) that will apply to older facilities that have not been modified or reconstructed since December 6, 2022. 

All facilities — including those not covered by OOOOb or OOOOc — reporting more than 25,000 mt CO2e of greenhouse gasses emitted per year to the Greenhouse Gas Reporting Program (GHGRP) are also subject to WEC fees.

Compliance timeline

The clock is officially ticking for subpart OOOOb affected facilities. With certain exceptions, compliance requirements will come into effect for these facilities on May 7, 2024. 

Older facilities will be covered under subpart OOOOc, which lays out the process for creating State Implementation Plans (SIPs). While SIPs will likely not go into effect until 2029, 2025 Waste Emissions Charge (WEC) fees will be calculated for emissions that occur this year on all assets — not just those subject to OOOOb.

One of the biggest changes from previous methane rules to this rule is the allowance of alternative detection technologies to satisfy monitoring requirements. Under the final rule, operators may use a combination of technologies to reach compliance. 

Alternative monitoring technology providers are required to submit an application for EPA approval before their services can qualify for compliance. Insight M has prepared our application, and we expect approval as soon as possible.

Operators need the flexibility to choose the right strategy for their business in today’s complex financial and regulatory environment. Compliance is a top priority, but it’s not the only consideration. Factors like crew safety, inspection costs, exposure to WEC fines, brand safety, and more should play a role in any operator’s approach, though the optimal path may vary across asset portfolios — including assets not subject to OOOOb. 

The Super Emitter Program

In addition to finalizing requirements for monitoring technologies, the final EPA rule establishes the process for third-party aerial and satellite surveillance of ​“super emitters,” or emissions ≥ 100 kg/​hr. 

When an EPA-approved third party detects a suspected super emitter, they will need to report it to the EPA within 15 days of detection. The EPA will review each case and notify operators of any reports they deem accurate within reason. They will also make the report publicly available on the Super Emitter Program website with most details included except the name of the suspected source owner. 

Companies are required to initiate an investigation within five days of receiving a notification from the EPA of a suspected emission and submit the results of the investigation within 15 days. The name of the suspected source owner will be published when the emission is confirmed or if the EPA does not receive a response proving otherwise.

There is no guarantee that third-party watchdogs will correctly attribute each detected emission. This program makes it more important than ever to have verified data to prove an erroneous report as false. 

That said, things break, and sometimes the source is on your site. If you can find and fix super emitters before any third party detects them, your team can avoid the entire process. In the event a third party does correctly attribute an emission to your site, frequent surveys can still save you hundreds of thousands in WEC fees by proving a detected emission’s short duration.

Flexibility and frequency beats surface-level simplicity

Not only does a high-frequency approach help you prioritize the most impactful emissions, it also mitigates exposure to WEC fees. The Super Emitter Program allows third parties to report any ≥100 kg/​hr emissions they identify — even if the suspected source is not subject to OOOOb monitoring requirements. Emissions detected under the Super Emitter Program from non-OOOOb sources may still be subject to large fines under the WEC rule. Smaller emissions below 100 kg/​hr that persist long enough to emit at least 500 MCF would also trigger proposed Subpart W reporting requirements and, thereby, subject to WEC fees. 

Frequent surveys at the appropriate sensitivity are a cost-effective method for finding and fixing emissions before they are detected by third parties or accumulate to the point of triggering a fine.

Your partner for compliance and long-term success

These new rules represent a daunting shift in the regulatory environment for our customers. Insight M is ready to help you craft a methane program that ensures compliance, minimizes fee exposure, and maximizes profits.