The Inflation Reduction Act
Operators in the oil and gas industry are likely well versed in their respective state regulations, but the recent amendment to the Clean Air Act (CAA) has imposed stricter guidelines at the federal level, affecting all oil and gas facilities within the United States. The amendment, set by section 60113 of the Inflation Reduction Act (IRA), adds section 136 to the CAA. This outlines the Methane Emissions and Waste Reduction Incentive Program for Petroleum and Natural Gas Systems which authorizes the administrator of the Environmental Protection Agency (EPA) to collect a waste emissions charge (WEC). Such a charge, fine, fee or tax on greenhouse gas (GHG) emissions is the first-ever imposed by the federal government and operators in the oil and gas industry are currently in the first year of required monitoring.
Applicable Areas & Emissions Reporting
As of January 1, 2024, any methane emissions exceeding the allowable limits of an “applicable facility” can incur a charge from the EPA. The language in section 136(c) defines applicable facilities as follows:
Allowable emission limits are determined by the methane intensity of an industry segment, outlined in CAA section 136(f)(1)-(3); factors including the amount of natural gas (or oil) that a facility sends to sales further determine a facility’s limits. As the chart below reflects, charges for exceeding emissions limits will increase incrementally over the first two years of the Greenhouse Gas Reporting Program (GHGRP) until the reporting year for 2026 emissions.
The Greenhouse Gas Reporting Program
As the chart below reflects, charges for exceeding emissions limits will increase incrementally over the first two years of the Greenhouse Gas Reporting Program (GHGRP) until the reporting year for 2026 emissions.
Further requirements for petroleum and natural gas facilities are codified in 40 C.F.R. Part 98, subpart W. The IRA methane charge applies to a subset of the petroleum and natural gas system facilities among those required to report GHG emissions in Part 98, Subpart W. Moreover, petroleum and natural gas production facilities can only be charged for the number of reported tons of methane that exceed 0.2% of the natural gas sent for sale from the facility. After emissions rates are calculated and reported, data will be made available to the public. The ruling associated with Subpart W ensures emissions calculations are made using empirical data, so any subsequent charges are accurate in kind.
Pneumatic Devices
As reported in 2021, by the USEPA Greenhouse Gas Reporting Program, the number one process emission sources were pneumatic devices at 26 million metric tons of carbon-dioxide equivalent. It is important to note that reporting in 2021 was voluntary with 470 facilitates reporting.
Because of the required reporting for 2024 and with pneumatics devices leading in methane emissions, Cordova Methane Controls and their VentHawk system are working diligently to help Oil and Gas companies reduce and eliminate methane emissions.
The VentHawk is a pneumatic gas capture and utilization system that routes exhaust gases from a controller to burner systems for clean utilization. The VentHawk CH4 is a stand-alone unit that accepts and utilizes pneumatic vent gas to heat your process, while simultaneously utilizing the vent gas. Both units offer production companies an economical solution to eliminate pneumatic emissions.
For additional information about VentHawk or VentHawk CH4 or to schedule a demo, please contact Cordova sales team member, Tim Westmoreland.
