On Tuesday, the Environmental Protection Agency (“EPA”) proposed regulations to reduce emissions of greenhouse gases and volatile organic compounds from the oil and natural gas industry.  The regulations are part of the Obama Administration’s plan to cut methane emissions from the oil and gas sector by 40 to 45 percent over the next ten years from 2012 levels.  Methane is the main component of natural gas and, according to the Agency, a potent greenhouse gas with a global warming potential more than 25 times greater than that of carbon dioxide.  The regulations will reduce methane emissions by 20 to 30 percent from 2012 levels by 2025.  The source of the remaining reduction needed to reach the overall goal of 40 to 45 percent is unclear.

The regulations will apply to new and modified natural gas and oil wells only, not existing wells.  The rules will require producers to: (1) find and repair leaks at wells, (2) capture gas from hydraulically fractured wells, (3) limit emissions from new and modified pneumatic pumps, and (4) limit emissions from compressors, pneumatic controllers, and other types of equipment used at natural gas transmission stations.

The proposed regulations are part of President Barack Obama’s broader Climate Action Plan aimed at addressing climate change and reducing greenhouse gas emissions.  The regulations come on the heels of the EPA’s recently-finalized Clean Power Plan requiring a 32% reduction in carbon dioxide emissions by 2030.

The EPA will take comments on the regulations for 60 days after publication in the Federal Register and will hold public hearings.  The Obama Administration expects the rules to be final sometime next year.  For more information, visit the EPA’s website.