On March 28, 2014, the White House released its “Climate Action Plan – Strategy to Reduce Methane Emissions.”  The plan summarizes the Administration’s strategy to reduce methane emissions from several sources.  The strategy includes proposing new standards, new rules, new voluntary strategies and programs and new regulations.   The plan outlines measures to reduce emissions and to improve measurement of sources and emissions.

According to the plan, Methane has a global warming potential more than 20 times greater than that of carbon dioxide, per metric ton.  On that basis, methane makes up almost 9% of all the greenhouse gases emitted as a result of human activity in the United States.  Although in the United States methane emissions have decreased by 11%, they are projected to increase from the current carbon dioxide equivalent of 560 million tons in 2012 to over 620 million tons in 2030 absent additional action to reduce emissions.  The main sources of human-related methane emissions are agriculture with 36%, natural gas systems with 23%, landfills with 18%, coal mining with 10%, petroleum systems with 6%, and wastewater treatment with 2%.

Reducing Emissions:

The plan anticipates a number of initial information gathering activities this spring and summer with the results being published in the fall.  Any final rulemakings would be completed by the end of 2016.

•     Landfills: The Environmental Protection Agency (EPA) will, in summer 2014, propose updates to existing standards intended to reduce methane emissions from new landfills and solicit public comment on whether to update standards for existing landfills.  EPA will continue its voluntary emission reduction programs through the Landfill Methane Outreach Program.

•     Coal Mines:  The Interior Department’s Bureau of Land Management (BLM) will release, in April 2014, an Advanced Notice of Proposed Rulemaking (ANPRM) soliciting public input on the development of a program for the capture and sale, or disposal, of waste mine methane, including preferred technology options for methane capture, on lands leased by the Federal government.  As with respect to landfills, EPA will continue to partner with industry through its Coalbed Methane Outreach Program to encourage recovery and beneficial uses of methane and to reduce institutional, technical, regulatory, and financial barriers to beneficial methane recovery and use at coal mines.

•     Agriculture: In June 2014, the US Department of Agriculture (USDA), EPA and the Department of Energy (DOE) will jointly release, in partnership with the dairy industry, a “Biogas Roadmap.” The roadmap will summarize voluntary strategies to reduce dairy sector greenhouse gas emissions by 25 percent by 2020 through adoption of methane digesters and other cost-effective technologies.  USDA and EPA will also continue to support biodigester technology deployment by providing financial and technical assistance through voluntary programs.

•     Oil and Gas:  Almost a third of the 2012 methane emissions in the US are attributable to the oil and natural gas sectors.  To reduce such emission, on April 17, 2012, the EPA issued final regulations to reduce the emissions of volatile organic compounds (VOCs), some of which are hazardous air pollutants, establishing, among other things, the first Federal air pollution standards for natural gas wells that are hydraulically  fractured, along with requirements for other sources, such as compressors, that were not previously regulated at the Federal level. Although these regulations targeted VOCs, they also reduced methane emissions.  The Administration intends to build on the existing regulations to encourage additional reductions.  Key steps include:

  •         In the spring of 2014, EPA will solicit input from independent experts through a series of technical white papers focusing on oil and co-producing wells, liquids unloading, leaks, pneumatic devices and compressors.  In the fall of 2014, EPA will determine what regulatory authorities, if any, apply to emissions from those sources, and if EPA decides to develop additional regulations, it will complete those regulations by the end of 2016.   Potential authorities are Section 111 of the Clean Air Act or issuing Control Techniques Guidelines under section 182 of the Act.  The public comment process will be important as EPA has not determined whether it will issue new regulations.
  •        Also in spring of 2014, EPA will begin to engage states, key stakeholders and industry on ways to enhance the voluntary Natural Gas STAR Program and will formally launch a new partnership by the end of 2014.
  •        Later in 2014, the BLM will propose revised standards and amendments of existing standards to reduce the loss of natural gas through venting and flaring of methane from oil and gas production on public lands.
  •        Through DOE-convened roundtables, the Administration will identify methane reduction opportunities in processing, transmission, storage and distribution and, in January 2015, it will release the first installment of the Quadrennial Energy Review with its recommendations.

Improving Methane Measurement:

The plan includes proposals for better data collection and measurement to improve understanding of methane sources and trends, and enable more effective management of opportunities to reduce methane emissions. Key steps under the strategy to improve data quality include:

•     Encouraging Development of Measurement Technologies:  DOE’s ARPA-E program will be seeking opportunities to fund technologies that significantly reduce the cost of methane sensing.

•     Enhancing and Updating the US Greenhouse Gas Inventory (GHGI):  EPA will enhance and update the GHGI through increased data collection, direct emission measurements, and research and analysis.  Earlier in March 2014, EPA proposed revisions to the Greenhouse Gas Reporting Program calculation methods and monitoring and data requirements.  The changes are intended to enhance the clarity and consistency of the reported data from petroleum and natural gas systems, such as for liquid unloading, completions and workovers, and compressors, and ultimately provide better data for the GHGI.

•     Expanding and Improving Methane Monitoring and Local/Regional and Global Modeling Capabilities:  The Administration’s plan includes budget requests for expanding and increasing the current monitoring capabilities as well as continued funding for local and regional methane monitoring programs.  Multiple government agencies will also continue their collection and publication of global measurements, estimates and projections of methane and greenhouse gasses emissions.

The plan is a mix of potential new regulations, support for new technologies and voluntary reduction proposals as well as continued support for existing reduction, measurement and monitoring programs.  Interested parties should be alert for the indicated solicitations of public comment.

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Photo of Scott A. Anthony Scott A. Anthony

Scott Anthony is a partner in the firm’s Silicon Valley office.  He advises public and private companies, investment funds and entrepreneurs on corporate governance, mergers and acquisitions, venture capital investments, strategic investments, joint ventures and other transactional matters.  Mr. Anthony’s practice focuses on…

Scott Anthony is a partner in the firm’s Silicon Valley office.  He advises public and private companies, investment funds and entrepreneurs on corporate governance, mergers and acquisitions, venture capital investments, strategic investments, joint ventures and other transactional matters.  Mr. Anthony’s practice focuses on companies with connections between China and the US.  It includes inbound and outbound cross-border acquisitions and strategic investments between US and China based companies, financing of venture backed companies based in China and the US and joint ventures with China based partners.