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EPA issues new rule requiring reporting of greenhouse gas emissions from the oil and gas industry

Amy Mall

Posted November 24, 2010

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Good news! Despite industry opposition, earlier this month the U.S. Environmental Protection Agency (EPA) went ahead and issued a rule that requires the oil and gas industry to join EPA's Greenhouse Gas Reporting Program--just like other major polluters. Producers will have to begin measuring their emissions in 2011 and reporting them in 2012.

Last month, I blogged about how oil and gas producers were opposed to federal regulations that would require them to report their annual greenhouse gas emissions to EPA.

They opposed these regulations, even though they also claim to already be successfully measuring these emissions, were given a one-year delay in complying by EPA, and can make money by capturing these emissions.

NRDC was very involved in providing public comment to the EPA on the substance of this rule, and we are pleased that EPA agreed with some of the points we made about how best to measure the greenhouse gas emissions from this industry.

What’s good about this new rule? EPA requires a comprehensive look at the industry’s emissions by requiring reporting from all equipment under common ownership or common control in a geographic area, known in the oil and gas world as a “basin” (such as the Los Angeles Basin, Denver-Julesburg Basin, etc). A comprehensive approach is critical to get accurate information on the greenhouse gas emissions from this industry.

EPA also included the emissions from contractors and portable equipment. This is essential, because the oil and gas industry outsources A LOT of its work to contractors and subcontractors, including drilling, hydraulic fracturing, waste management, pipeline construction, and more. While we are disappointed that the EPA exempted some sources from reporting pending additional analysis, we are hopeful that they will be included at some point down the road.

EPA included offshore operations in the reporting requirement, although it limited the reporting requirement to emissions from platforms and equipment physically attached to a platform, exempting support vessels and mobile offshore drilling units. Again, we hope these will be included at a later date.

There are a few provisions of the new rule that concern us – the exemption of certain equipment and the thresholds allow oil and gas producers to avoid reporting some emissions if they seem small, even if they would cumulatively add up to a lot. But we like how EPA provided for estimating emissions and collecting data, and overall we give this new rule a big “thumbs up!”

This new rule is essential because there is currently too much uncertainty about the magnitude of greenhouse gas emissions from the oil and gas industry. Some experts say the emissions could be twice as much as is currently thought. The industry emits a lot of methane during the exploration for and product of oil and natural gas.

The upside is that these emissions can be prevented, and the methane captured, which is a win-win for the environment and for the bottom line of companies that make money by selling methane. EPA's Natural Gas Star program makes clear all the solutions and the economic benefits. Methane is a very potent greenhouse gas and just venting it into the air, when we know such emissions can be prevented, is an inexcusable waste of a natural resource and threat to the climate. We look forward to seeing the reports from the oil and gas industry.

Thanks to Susan Harvey for her expert analysis of the new rule.

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DissentaNov 26 2010 11:17 PM

Amy, Obviously you've seen the abstract of preliminary Howarth report out of Cornell, now in peer review. Current low gas prices might be making capture and prevention of leaks and ventings of methane (as one especially potent GHG) less imperative financially to industry. Howarth told me privately at Binghamton that indeed, as Amy mentions, the estimate of overall methane leakage in shale gas lifecycle production could be more than twice the old estimate of 1.5% of total production, now seen as closer to 4%, giving the shale gas production lifecycle nearly as dark a greenhouse footprint as coal and possibly worse.

My question is why is EPA asking only for reporting of leakage and ventings of GHGs and not requiring control, capture and prevention to overcome the lack of financial incentive due to low gas prices?

Or does EPA issue a report on total GHG emissions from shale gas production (in say a year) and THEN there will be a rule requiring gas industry to capture, control and prevent methane and other GHG leaks and ventings? Is that the way it will work? Otherwise what good is all this gas industry "reporting"?

Amy MallNov 29 2010 03:37 PM

Thanks for the comment and questions. We agree that oil and gas producers should be required to prevent and capture their greenhouse gas emissions. We hope such a requirement will be established soon, but ensuring that we have a good inventory of how much greenhouse gases are being emitted, and the sources, is an important first step.

There is a lot of information in the Technical Support Document for EPA's reporting rule regarding EPA's reconsideration of inventory estimation methodologies and changes in estimates, which you can find here:

Ellen N. DuellDec 1 2010 03:44 PM

On Nov. 13 and 14 (Saturday and Sunday) the West Bay Geophysical Co., based in Traverse City, MI, undertook seismographic tests along Yellow Springs-Fairfield Rd., stopping traffic in one lane at a time. They had permission from the county Sheriff and Engineer. There had been no public notification. This is a private company doing testing on public roads and roadsides. We have been objecting to this via our newspaper and our Environmental Coalition. We will do all we can to prevent hydraulic fracturing in Greene County! It is enormously polluting and damaging to the earth, soil, rock layers, and water. We want to have renewable energy here.

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