January 31, 2022
The U.S. Chamber of Commerce (the “Chamber”) appreciates the opportunity to comment on the U.S. Environmental Protection Agency’s (“EPA”) “Proposed Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources: Oil and Natural Gas Sector Climate Review,” dated November 15, 2021 (the “Proposal”).1 The Chamber supports the smart, balanced regulation, consistent with law, of methane emissions from the oil and gas sector, as an important element of the nation’s overall commitment to continue reducing its greenhouse gas (“GHG”) emissions. Affordable, domestically produced natural gas has been one of the primary driving forces behind significant reductions in carbon emissions achieved over the past decade, most notably from the power generation sector.
Accordingly, the Chamber offers the following comments to help refine EPA’s Proposal to create durable, long-term regulatory certainty for the upstream and midstream segments of the oil and gas sector, while maintaining a proper balance with key economic, legal, and policy considerations. As discussed more fully below, EPA’s proposed regulations should work to achieve additional progress in cost-effectively reducing methane, in accordance with law, while accounting for the key policy considerations described below.
In the anticipated supplemental proposal and in any final rule, EPA should also take into account all relevant legal and structural comments raised to ensure that the final rule is appropriately legally defensible, that the regulated community understands its future obligations, and that there are clear roles for the states that are likely to be the primary implementers of the regulations at the source level. The Chamber emphasizes that the supplemental proposal should contain full regulatory text, should be comprehensive, and should be based on robust reasoning and a strong factual record in all respects.
The Chamber provides here a summary of its comments on EPA’s Proposal:
- EPA’s Proposal must consider the importance of maintaining the nation’s energy security and continuing the development of our natural resources to maintain comparatively low energy prices.
- EPA’s Proposal must account for and maintain appropriate regulatory consistency across federal and state agencies.
- EPA’s Proposal should prioritize performance-based regulations, as this will help drive cost-effective solutions.
- EPA’s Proposal must consider and support the availability and growth of good-paying jobs in the oil and gas sector.
EPA’s Proposal must follow the appropriate Clean Air Act (“CAA”) process for development of new source performance standards (“NSPS”) regulations to provide certainty to the regulated community.
- EPA should explain the applicability of Quad O, Oa, Ob, and Oc and should do so in a manner consistent with the CAA.
- EPA should abandon its proposed position that state provisions that go beyond what EPA has determined to be the “Best System of Emission Reduction” (“BSER”) can be federally enforced.
- EPA should amend the applicability date for the NSPS to the publication date of the anticipated supplemental proposal, which will presumably include regulatory text sufficient to trigger applicability.
- EPA’s proposed BSER standard must allow for innovation and not limit compliance to certain technologies.
- EPA’s cost-benefit analysis should be completed only after the Interagency Working Group (“IWG”) on the Social Cost of Greenhouse Gases develops durable social cost of GHGs estimates that are established through a robust public stakeholder engagement process.
Setting nationwide methane regulations on a strong legal footing with efficient regulatory mechanisms will facilitate swifter implementation to achieve important emissions reduction goals and will create needed long-term certainty. The Chamber looks forward to commenting on EPA’s supplemental proposal, which is anticipated to provide the key regulatory text that would inform the regulated community of its potential legal obligations.