U.S. EPA Proposes to Amend the Mandatory Reporting of Greenhouse Gases by Adding Source Categories

The Mandatory Reporting of Greenhouse Gases Rule currently requires suppliers of fossil fuels or industrial greenhouse gases, manufacturers of vehicles and engines, and facilities that emit 25,000 metric tons or more per year of greenhouse gas (“GHG”) emissions to submit annual reports to U.S. Environmental Protection Agency (“USEPA”).  On March 22, 2010, (“USEPA”) signed several proposed rules to amend the Mandatory Reporting of Greenhouse Gases Rule by adding source categories.  These include:

 

·     Subpart A:  General Provisions: Corporate Parent/NAICS Amendments

·     Subpart W:  Petroleum and Natural Gas Systems

·     Subpart RR:  Carbon Dioxide Injection and Geologic Sequestration

·     Subpart I:  Electronics Manufacturing

·     Subpart L:  Fluorinated Gas Production

·     Subpart DD:  Imports and Exports of Equipment Precharged with Fluorinated GHGs or Containing Fluorinated GHGs in Closed-cell Foams

·     Subpart OOa:  Use of Electric Transmission and Distribution Equipment

·     Subpart SS: Manufacture of Electric Transmission and Distribution Equipment

 

These amendments expand the applicability of the Mandatory Reporting of Greenhouse Gases Rule.  Two of these proposed rules are particularly interesting and include the Subpart W:  Petroleum and Natural Gas Systems and Subpart RR:  Carbon Dioxide Injection and Geologic Sequestration.

 

The proposed Subpart W Petroleum and Natural Gas Systems rule will require petroleum and natural gas facilities emitting more than 25,000 metric tons or more of CO₂ equivalent per year to report their greenhouse gas emissions to USEPA.  Facilities will be required to begin data collection January 1, 2011 and submit their first reports to USEPA on March 31, 2012 for their 2011 emissions.  The definition of “facilities” differs from the remainder of the rule and for this subpart facilities will include: offshore petroleum and natural gas production, onshore natural gas production, onshore natural gas processing, gas transmission, underground natural gas storage, LNG storage and LNG import and export facilities, onshore production and natural gas distribution facilities.  USEPA expects the estimated average cost to be $18,000 per facility for the first year and $8,000 in subsequent years.  This proposal will be open for public comment for 60 days after publication in the Federal Register. A public hearing will be held on this proposal on April 19, 2010 in Arlington, Virginia.

 

Proposed Subpart RR Carbon Dioxide Injection and Geologic Sequestration will require mandatory reporting of greenhouse gases from facilities that inject carbon dioxide underground for the purposes of geologic sequestration or enhanced oil recovery (“EOR”) adding this new source category to the Mandatory Reporting of Greenhouse Gases Rule.  According to USEPA, this “proposal is complementary to and builds on [US]EPA’s proposed rule for Federal Requirements under the Underground Injection Control (UIC) Program for Carbon Dioxide Geologic Sequestration Wells;” however, it will not change any requirements for obtaining or complying with UIC permits.  It will require a monitoring strategy for detecting potential emissions to the atmosphere and reporting of data to verify the total amount of CO₂ sequestered.  Long-term geologic sequestration facilities will also be required to:

 

• Develop and implement a USEPA approved site-specific monitoring, reporting, and verification (MRV) plan
• Report the amount of CO₂ geologically sequestered using a mass balance approach. 

However, these two additional provisions would not apply to EOR operations or geologic sequestration research and development projects unless the facility chooses to opt-in.  USEPA estimates the annual cost of reporting for each facility to be $4,000.  The first annual reports will be due March 31, 2012 to USEPA for 2011.  This proposal will be open for public comment for 60 days after publication in the Federal Register. A public hearing will be held on this proposal on April 19, 2010 in Arlington, Virginia.

 

The addition of new source categories to Mandatory Reporting of Greenhouse Gases Rule is quite interesting and will require time to see the full effect of this rulemaking. 

This article was authored by Laura G. Swingle, Jackson Kelly PLLC. For more information on the author see here.