The U.S. Environmental Protection Agency (EPA) sent a letter, dated April 18, 2017, to oil and gas industry petitioners announcing that the Agency will reconsider part of its rules regulating methane emissions from new and modified oil and gas industry emissions sources ("Letter"). Multiple petitions submitted on August 2, 2016, by the American Petroleum Institute, the Texas Oil and Gas Association, GPA Midstream Association, and various oil and gas independent associations, asked EPA to reconsider and, in some circumstances, requested an administrative stay, of the provisions of EPA's final rule entitled "Oil and Natural Gas Sector: Emissions Standards for New, Reconstructed and Modified Sources." 81 Fed. Reg. 35824 (Jun. 3, 2016) (also known as the "Methane Rule").

The Letter was issued by EPA Administrator Scott Pruitt and noted that the petitioners raised "at least one objection to the fugitive emissions monitoring requirements included in the Final Rule (§ 60.5397a and associated provisions) that arose after the comment period or was impracticable to raise during the comment period and is of central relevance to the rule . . . ." Consequently, the Agency indicated it is convening a proceeding for reconsideration of those fugitive emissions monitoring requirements. The Letter also notes that the Agency will consider petition objections regarding (1) provisions for requesting and receiving an alternative means of emissions limitations, and (2) inclusion of low production wells in the rules, because these provisions were not included in the proposed rule, which deprived the public of an opportunity to raise objections to these provisions during the public comment period. Further, the Letter notes that EPA intends to exercise its authority under Clean Air Act Section 307 to issue a 90-day stay of the compliance date for the fugitive emissions monitoring requirements.

The Methane Rule amends existing New Source Performance Standard (NSPS) rules (40 C.F.R. Subpart OOOO) and establishes new standards for methane and VOC emissions (Subpart OOOOa). The Methane Rule applies to construction, modification, or reconstruction of oil or natural gas industry emission sources commenced after September 18, 2015. 81 Fed. Reg. 35824, 35844 (Jun. 3, 2016). Rule provisions would require emissions from centrifugal compressors to be captured and routed to control devices and reciprocating compressors would require regular replacement of rod packing. Pneumatic pumps at natural gas plants would be required to have instrument air systems in place of natural gas driver pumps, and pneumatic pumps at well sites would generally be required to have emissions routed to an existing control device or process. Under the "green completion requirement," emissions from well completions would have to be captured and routed to a combustion device. Further, fugitive emissions from well sites and compressor stations would require monitoring and repair.

The Methane Rule was a key component of the Obama Administration's efforts to reduce greenhouse gas emissions and was thought to be a precursor to an even more sweeping rule that would have limited methane emissions from existing oil and gas sources. On March 2, 2017, EPA announced that it was withdrawing its information request to oil and natural gas industry operators that was to be part of the information gathering efforts for development of that rule. In addition, the Methane Rule has been challenged by at least 16 states and 19 oil and gas industry groups in the District of Columbia Court of Appeals.