GPA Midstream pushes back on EPA’s proposed methane fee

GPA Midstream filed comments with the U.S. Environmental Protection Agency March 26, proposing 10 key changes to the agency’s pending rules on charging oil and gas industry companies for methane emissions.

The extensive comments in the 37-page filing come after a successful petition for an extension to file comments on the EPA’s “Waste Emissions Charge for Petroleum and Natural Gas” proposed rule released Jan. 26.

GPA Midstream told EPA that it needs to recognize that not all emissions from using natural gas for beneficial purposes should be considered waste emissions. We suggested language that would provide a more specific definition of methane waste emissions and exclude emissions from combustion engines in machinery used in gas processing. The distinction is one that can be made easily because it's a provision in state gas capture programs in New Mexico and North Dakota.

We also contend that the rule works against the intent of the Clean Air Act because it doesn’t make more flexible allowances for a “netting” of emissions from sites under the control of a single company. The most effective way to achieve EPA's goal to reduce emissions is combine total emissions across facilities over or under the threshold at the parent company level.

Comments also addressed streamlining and simplifying the payment of annual charges for emissions over the threshold and making only significant violations of the rules subject to penalties.

We also asked EPA to set reasonable limits on the use of third-party audits and in using data developed by outside companies. Because those arrangements include proprietary information, GPA Midstream requested an expansion of confidentiality requirements.

The EPA rulemaking is part of the Inflation Reduction Act, which adds authorities under the existing Clean Air Act to reduce methane emissions. The Waste Emissions Charge would be levied on petroleum and natural gas facilities that emit more than 25,000 metric tons of CO₂.

Those charges would be $900 per metric ton when they kick in this year and go up to $1,200 per metric ton next year. In 2026 and thereafter, the charge goes to $1,500 per metric ton to encourage reduction in emissions overall.

In the March 26 comments, we requested that EPA acknowledge the incompleteness of this proposed rule and engage in additional rulemaking. We contend the rulemaking process should include coordinating requirements of the new Waste Emissions Charge rules with EPA’s existing Greenhouse Gas Reporting Program and revisions to the New Source Performance Standards.