EPA Publishes Final Greenhouse Gas Reporting Requirements for Petroleum and Natural Gas Systems

On May 14, 2024, the U.S. Environmental Protection Agency (EPA) published the final amendments to the Petroleum and Natural Gas Systems source category (subpart W) of the Greenhouse Gas Reporting Program (GHGRP). The final Greenhouse Gas Reporting Rule requirements published by EPA will have far-reaching implications for businesses across industries and give facilities only limited time to prepare for compliance, necessitating a proactive approach to compliance.

EPA will phase in implantation of the revisions over reporting years 2024 and 2025. The final rule applies to a wide range of oil and gas facilities operated by the petroleum production, gas transmission, and utility industries.  According to EPA, the final amendments consist of four parts: revisions to reporting of emission data for specific sectors; revisions to add new emissions calculation methodologies; revisions to reporting requirements; and technical amendments, clarifications, and corrections.

Background

The GHGRP, requires reporting of greenhouse gas (GHG) data from certain large GHG emission sources, fuel and industrial gas suppliers, and CO₂ injection sites in the United States.

In August 2022, the Inflation Reduction Act (IRA) was signed into law. Section 60113 of the IRA amended the Clean Air Act (CAA) by adding section 136, “Methane Emissions and Waste Reduction Incentive Program for Petroleum and Natural Gas Systems.” CAA section 136(h) requires that EPA, within two years after the date of enactment of section 60113 of the IRA, revise the requirements of subpart W to ensure the reporting under subpart W is based on empirical data, accurately reflects the total methane emissions (and waste emission) from the applicable facilities, and allow owners and operators of applicable facilities to submit empirical emissions data.

Affected Industries and Applicable Facilities

Applicable facilities in the nine affected industry segments are required to report under subpart W if their annual emissions are more than 25,000 metric tons CO₂e from all applicable sources at the facility. The applicable facilities are within the following affected industry segments: 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, onshore petroleum and natural gas gathering and boosting, and onshore natural gas transmission pipeline. 

Notable Revisions

Under the revised rule, affected industries and applicable facilities must report CO² , CH⁴ , and N²O emissions from most oil and gas equipment and components such as equipment leaks, vented emissions, single well-pads and associated single well pads, reciprocating compressor venting, centrifugal compressor venting, flare stake emissions, and transmission storage tanks.

The revised rule requires reporting for previously unreported sources such as other large release events, nitrogen removal units, produced water tanks, mud degassing, and crankcase venting. It also includes reporting from additional industry segments for certain emissions sources (e.g., blowdown vent stacks, natural gas pneumatic device venting, dehydrator vents, acid gas removal units) that previously were only required to be reported for some, but not all, of the industry segments in which those sources exist.

The revised rule focuses on the use of empirical data, verifications, and transparency. The revisions include additional direct measurement calculation methodologies, including optional use of relevant new calculation methodologies for reporting year 2024, revisions to existing methodologies, and incorporation of data from remote sensing (e.g., satellite or high-flying aircraft) for “other large release events”.

Effective Date

Most revisions will become effective on January 1, 2025. One exception is the provisions on reporting of the quantities of natural gas, crude oil, and condensate produced that is sent to sale in the calendar year for each well permanently taken out of production (plugged and properly abandoned); those provisions also become effective on January 1, 2025, but reporters must include that information in their 2024 annual reports.

Some calculation methods become effective for the 2024 reporting year as optional methods. These optional calculation methods become effective July 15, 2024 and provide reporters with the option to use these newly available calculation methods for their 2024 annual reports that are submitted March 31, 2025.

If you have any inquiries regarding reporting obligations under the final rule, please feel free to reach out to one of our Environmental attorneys.