Watchdog says New Federal Rules Needed to Address Oil and Gas Methane Leaks

June 15, 2022

Federal agencies need to improve monitoring methods and institute more rules regulating leaks to reduce methane pollution from oil and gas development on federal land leases in Indiana and other states, according to a watchdog report.

The Government Accountability Office report recommended that the U.S. Environmental Protection Agency and the U.S. Department of the Interior’s Bureau of Land Management work harder to detect methane emissions and set rules requiring leaseholders to capture methane released through leaks in order to prevent methane pollution and wasted federal revenue.

“Large oil- and gas-producing states are taking steps to regulate methane that go beyond what BLM demands, such as requiring operators to submit gas capture plans prior to drilling and to establish and meet goals for gas capture,” the report states. “Without BLM taking steps to institute similar requirements for operators on federal lands, operators will continue to vent or flare methane that contributes to pollution and greenhouse gas emissions, and the federal government will continue to lose revenues from the production of oil and gas.”

Methane is a greenhouse gas at least 25 times more potent than carbon dioxide at trapping heat in the atmosphere, a driver of human-caused climate change that has altered the average temperature, rainfall distribution, amount of extreme weather events and other dangerous and expensive global changes.

Here in Indiana, the average annual temperature has risen 1.2 degrees Fahrenheit over the last century and is projected to rise about a total 5 degrees or more by mid-century. Rainfall has increased by 5.6 inches since 1895 and is falling in shorter, heavier rain events, leading to an increased risk of flooding that has cost communities millions of dollars to cope with and prevent.

Most methane in the U.S. comes from the agricultural sector, but oil and gas production and transmission are responsible for about 37% of total methane emitted in the U.S.

Natural gas, which is supplanting coal as the main fuel for electric power plants in the U.S., is mainly made up of methane. It is transported across the U.S. through a 3-million-mile network of underground pipelines, including at least 5,101 miles of natural gas distribution pipeline and 3,470 miles of hazardous liquid distribution across Indiana.

Map of U.S. interstate and intrastate natural gas pipelines. EIA

Methane is emitted not only during oil and gas production, but throughout every step of a fuel’s journey from its source underground to where it is burned as fuel.

The EPA estimated in 2018 that for every cubic foot of natural gas extracted, 1.4% is lost through leaks. Subsequent independent studies have found that the amount may be up to 9%.

The leaks, known as fugitive emissions, contribute to global climate change, and, when the leaks happen on land leased from the federal government, it denies the federal government potentially billions of dollars in revenue.

In addition to rent, oil and gas companies pay the federal government 12.5% of the value of the resource they extract from onshore sources. Fugitive emissions reduce corporate profits and deny the government funding while making climate-changing pollution worse.

As of 2021, there are two leases of federal land in Indiana for resource production covering 68 acres.

The GAO found that outdated EPA regulations are preventing the oil and gas industry from taking voluntary actions to reduce overall methane emissions.

The Clean Air Act allows anyone to submit applications to the EPA to request approval of an “alternative means of emission limitation,” including the adoption of new technologies to detect fugitive emissions of methane and other pollutants.

The process requires data collection and modeling analyses at each site where the technology will be used, a resource- and time-intensive requirement that has discouraged the widespread adoption of proven technologies like optical gas imaging cameras, aircraft with gas-detecting sensors, satellite technology and ground-based sensors.

“While EPA and BLM have taken steps in an array of rules to reduce methane emissions, administrative and legal challenges have hindered their implementation,” the GAO report states. “In the midst of federal uncertainty, the oil and gas industry is voluntarily taking actions to reduce methane emissions, but federal regulations can impede adoption of alternative technologies for detecting methane emissions. Without greater flexibility in its process for approving alternative technologies, EPA may hinder the adoption of innovative approaches by operators for detecting and reducing methane emissions.”

The EPA said it has already incorporated technology flexibility in several rule proposals making their way through the regulatory process, including allowing the use of “advanced methane detection technologies” bimonthly and for continuous monitoring.

The GAO said BLM should follow the lead of several states by regulating methane directly or indirectly through the regulation of toxic chemicals called volatile organic compounds.

According to the GAO, California, Colorado, North Dakota, New Mexico, Pennsylvania, Wyoming and Texas have some regulations governing existing sources or have requirements on equipment or leak detection, but BLM does not.

The GAO also recommended BLM should make new rules that minimize the waste of natural resources, in effect preventing fugitive emissions.

The agency previously required companies leasing federal land for natural resources to submit plans to “minimize waste” of natural resources, but the rule was scrapped by the Trump administration.

The Bureau of Land Management said it is considering requiring operators to submit waste minimization plans for all drilling permits.

Watchdog says New Federal Rules Needed to Address Oil and Gas Methane Leaks