Ready for the Methane Shake-Up? 10 Key EPA Changes and How to Stay Ahead
The Inflation Reduction Act of 2022, recently passed by the U.S. Congress, is a significant leap toward addressing the climate challenge. Analysts predict this legislation can reduce U.S. greenhouse gas emissions to 40% less than 2005 by 2030. This aligns closely with President Biden's ambitious target of slashing emissions by half within the same period.
Recently, the EPA sought public feedback on the Methane Emissions Reduction Program (MERP) established by the Act. MERP complements upcoming EPA mandates by imposing a fee on needless emissions from oil and gas activities. The program enforces pollution control, and its waste charge is designed to deter high emissions across the supply chain.
Congress has allocated a notable $1.55 billion to MERP. This fund aims to enhance methane pollution monitoring, make emission reporting more precise, reduce pollution control costs, and provide aid in reducing other toxic pollutants from oil and gas procedures.
Here's a deeper look into how MERP enhances the EPA's capability to address methane emissions:
1. Pricing Methane Emissions: At the core of MERP is a fee on methane emissions from U.S. oil and gas establishments. Commencing in 2024, this charge is set at $900 per ton of methane, escalating to $1500 by 2026. This charge is levied only on emissions beyond set benchmarks. This system incentivizes businesses to reduce emissions rather than incurring costs. An exemption exists for entities adhering to robust EPA methane regulations.
What can you do to get ready? The first is to develop a holistic strategy for streamlining leak detection and repairs. With the new taxes being imposed, getting a better handle on how to reduce leak emissions, put technology in place to proactively handle this problem, and ensure you reduce leaks each year, helping you avoid any new taxes.
2. Enhanced Emissions Tracking: MERP mandates the EPA to refine the Greenhouse Gas Reporting Program (GHGRP) to base its emission reporting on real-world data. Doing so presents a more accurate picture of the methane emissions landscape. In collaboration with multiple research teams, the EDF has identified that observed emissions often surpass current EPA evaluations. MERP's focus on empirical data will provide a clearer understanding of methane emissions.
What can you do to get ready? Move from default emissions factor calculations to site-specific measurements, giving you a better picture of your actual emissions footprint and allowing you to report lower emissions levels than what the upcoming emissions factor formulas will calculate. It's presumed these new formulas will increase your methane emissions results to 4x over 2022 levels, so you must start on a site-specific measurement strategy now.
3. Addressing Health Concerns: With MERP's funds, the EPA can address health issues from methane and associated pollutants, especially in underprivileged communities. These communities frequently experience severe health problems due to their proximity to contaminants. The funds are intended to alleviate these impacts and boost monitoring in these areas.
What can you do to get ready? Adopting new technologies and partnering with the local community to reduce these emissions will be paramount for areas impacted. And you're not alone. The EPA has allocated hundreds of millions of dollars to help reduce emissions in these frontline communities.
4. Promoting Methane Monitoring and Innovation: MERP allows the EPA to award grants to local bodies and individuals for methane monitoring. This is vital for both understanding and devising solutions for methane emissions. Moreover, MERP promotes the adoption of zero-emission technologies, which have the potential to reduce emissions drastically.
What can you do to get ready? Partnering with state and local governments to apply for grants that help reduce local emissions will be essential. Above, the EPA has allocated hundreds of millions of dollars to help reduce emissions in partnership with the local governments, so there's no excuse not to make changes.
5. Addressing Problematic Wells: The program earmarks $700 million for "marginal conventional wells" and provides additional funds for sealing wells, reinforcing EPA's endeavors to minimize emissions and ensure their proper closure. Despite producing a minimal amount of usable product, a significant number of these wells are major methane emitters. Proper sealing ensures these wells don't continue to harm the environment.
What can you do to get ready? Identifying older wells that may need to be marked appropriately is a significant first step. The second would be to ensure each was closed correctly and, if not, build a strategy to do so. The last would be to set up monitoring and sensor programs to track any emissions in the future once you're assured that these have been plugged in.
6. Community Empowerment: A vital aspect of MERP's design is its intent to empower communities, especially those directly affected by oil and gas operations. It ensures that a significant portion of its funds is used for community, and fence line monitoring places oversight power directly in the hands of those most affected. This fosters trust and ensures that corrective measures are taken in real time based on direct observations and feedback from the ground.
7. Encouraging Technological Advancements: By setting a pricing structure on emissions and allocating funds for monitoring, MERP indirectly encourages the industry to invest in technological innovations. These innovations can lead to the development of cleaner, more efficient extraction and processing methods, reducing the industry's overall carbon footprint.
What can you do to get ready? Identify promising startups and technologies that can assist in this journey, piloting and learning from these deployments, then get ready for a 2025 rollout to ensure you're on top of and staying ahead of any new changes. Work with universities and governments might be needed to receive the proper 3rd party validation that these solutions work and that the EPA will approve them.
8. Setting a Precedent for Global Action: With its robust focus on methane mitigation through MERP, the Inflation Reduction Act positions the U.S. as a leader in climate action. This can inspire other nations to adopt similar measures, leading to a global collaborative effort to tackle methane emissions and other environmental challenges.
What can you do to get ready? Share best practices and lessons learned, and promote the results of your pilots and rollouts to generate goodwill, establish leadership in this area, and ensure the rest of the world is following in your footsteps, helping other countries achieve their reductions in methane emissions.
9. Economic Implications: MERP's structure also offers economic advantages beyond the environmental benefits. Companies can save on costs in the long run by incentivizing the reduction of wasteful emissions. Additionally, emphasizing technological innovation can create jobs in the renewable energy and green tech sectors.
What can you do to get ready? Training your workforce for new jobs of the 21st century will be critical to take advantage of these new technologies' benefits and save in the long run as you move from manual to digital processes.
10. Holistic Approach to Environmental Conservation: While the primary focus of MERP is methane emissions, its broader implications touch upon other areas of environmental conservation. The comprehensive approach ensures that while methane reduction is prioritized, other harmful emissions and pollutants are noticed, creating a more sustainable and holistic approach to environmental protection.
What can you do to get ready? Why stop at just methane? Leverage these new technologies and approaches towards other areas of the business and other gasses and sources of pollution.
In summary, the Inflation Reduction Act, backed by MERP's comprehensive changes, represents a promising stride towards a more sustainable future. Companies would be well served not only to start planning for these changes, but they'll save money and increase profits through the adoption of new technologies. Stay caught up, scrambling to catch up in 2025, and miss out on any EPA funding. Take advantage of the time and money available today! To learn how 6th Element Labs can help you in this transformation, click the Contact Us button below and get in touch!
