Staying the Course on Reducing Emissions
Methane policy and regulations are in flux, but oil and gas companies continue to prioritize methane reductions as well as reporting of greenhouse gas (GHG) emissions. Regulatory changes were a key topic at the recent Energy Emissions Modeling and Data Lab (EEMDL) conference held at The University of Texas at Austin. Yet EEMDL—a joint research initiative of UT Austin, Colorado State University, and the Colorado School of Mines—is staying the course. A few consistent themes emerged from this gathering of companies, academics, NGOs, and others working on GHG reductions. These themes have been reinforced in ongoing discussions over the future of the Greenhouse Gas Reporting Program (GHGRP).
First, while policy change is inevitable, many oil and gas producers, midstream companies, and liquefied natural gas (LNG) sellers will not alter their measurement, reporting, and verification of greenhouse gas emissions. In both public talks and private discussions, companies stated that federal regulations are always subject to change, but companies plan for the long term across political cycles. Companies affirmed that they will continue applying lessons learned from measurement campaigns and quantification efforts to help cut emissions and “keep it in the pipe,” which in turn boosts operational efficiency and marketed production. Technical sessions on day three of the conference showcased the range of technical learning underway in areas including measurement informed inventories, lifecycle assessments and LNG value chains, flaring, and space-based monitoring of emissions. A poster session shared research findings from EEMDL-affiliated graduate students and researchers as well as other analysts. The EEMDL conference illustrated the robust research and applied analysis underway in academia and industry on GHG emissions. Panel discussions and workshops also noted the work remaining to share these research findings and build capacity outside North America, for example through academic partnerships and work with national oil companies.
Second, many companies noted the importance of continuing to report their GHG emissions. Much discussion centered on proposed regulatory changes at the U.S. Environmental Protection Agency (EPA). A workshop at the EEMDL event summarized proposed changes to EPA OOOOb and OOOOc regulations, as well as the effective end of the Inflation Reduction Act Waste Emissions Charge, the EPA reconsideration of the Endangerment Finding, and the EPA proposal to effectively end reporting requirements under the GHGRP. The latter proposal to end GHGRP reporting for 46 source categories, while eliminating reporting for the natural gas distribution segment under Subpart W and suspending all other Subpart W reporting requirements until 2034, has raised concerns in industry.
Discussions at the EEMDL event noted the unique significance of the GHGRP as a tool for companies to report data in a consistent and comprehensive manner and benchmark their performance. Workshop participants noted that GHGRP data are critical for other purposes as well, including reporting requirements associated with the 45Q tax credit for carbon sequestration and the 45V tax credit for low-carbon hydrogen.
Public comments on the EPA proposal to end the GHGRP closed on November 3, and the U.S. oil and gas industry largely supports retaining the program. In comments submitted to the EPA, the American Petroleum Institute (API) listed several industry uses of GHGRP data, including showcasing company and industry progress in reducing GHG emissions; serving as a basis for GHG emissions inventories that may be included in corporate sustainability reporting; providing data to support claims for tax credits; and fulfilling state-level statutory requirements. Notably, it stated “we do not expect that API member companies will realize substantial cost savings by the elimination of the GHGRP. Instead, they are likely to incur additional costs.” The API suggested that states or third parties could impose a patchwork of new requirements, while downstream customers will expect continued reporting of GHG emissions data and analysis of carbon intensity of supply chains. The Business Roundtable submitted similar comments, suggesting that “a sudden change to the current program could result in piecemeal, duplicative, incomplete, and more burdensome” reporting obligations. A brief review of other comments in the EPA docket suggests fairly strong alignment between the oil and gas industry and environmental organizations on these concerns.
Next steps on the GHGRP are uncertain. It will take time for the EPA to review public comments and decide whether to adjust its plans to effectively end the program. It is possible that concerns expressed by the oil and gas sector, other industries, and policymakers from both major parties will lead the agency to adjust its proposed policy.
The evolution of methane regulations is challenging for the oil and gas industry, which is demonstrating progress on methane reductions thanks to sustained research, technological innovation, and investment in better monitoring tools and operational practices. There is still a wide gap between best-in-class operators who have spent years conducting measurement campaigns, and those companies—mainly, but not exclusively, smaller or privately held companies—that are earlier in the methane journey. There are disagreements, of course, about the degree to which regulations drive change. Some believe that market forces and voluntary initiatives are sufficient to drive operational improvements. But judging from conversations at the EEMDL conference as well as subsequent public comments from companies and trade associations, it seems clear that the industry sees transparent, consistent reporting of GHG emissions as a priority.
About the Author
Ben Cahill is Director for Energy Markets and Policy at the Center for Energy and Environmental Systems Analysis, University of Texas at Austin.
