On Day 1 of the Biden administration, 20 January 2021, President Joe Biden launched an unprecedented, whole-of-government campaign to reduce methane emissions through Executive Order 13990, “Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis.” In November 2021, the White House Office of Domestic Climate Policy detailed the campaign in its US Methane Emissions Reduction Action Plan, discussing a series of anticipated rulemakings to be issued by the Environmental Protection Agency (EPA), the Department of the Interior’s Bureau of Land Management, and the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA), in addition to a host of grants, partnerships, and other initiatives involving the Department of Agriculture, the Department of Energy, and the Department of Housing and Urban Development. What followed was the most ambitious agenda in history to address methane emissions, including the first-ever US climate enforcement initiative. The oil and gas sector, responsible for approximately 30% of total methane emissions, was squarely in the crosshairs.
On Day 1 of the second Trump administration, 20 January 2025, President Donald Trump responded, revoking Executive Order 13990. Announcing a “national energy emergency” during his inauguration speech, Trump committed the nation to “drill, baby, drill,” potentially unlocking new powers to open up drilling in protected areas. In one of 46 executive orders issued within hours of his inauguration, “Unleashing American Energy” further ordered an “immediate review of all agency actions that potentially burden the development of domestic energy resources,” directing the heads of all agencies to “develop and begin implementing action plans to suspend, revise, or rescind all agency actions identified as unduly burdensome.” “[P]articular attention” is to be paid to oil and natural gas, among other resources. At the same time, three of Biden’s signature regulations targeting methane emissions in the oil and gas sector are being challenged in the US Court of Appeals for the District of Columbia Circuit: the EPA’s Clean Air Act New Source Performance Standards (NSPS) and Emissions Guidelines for the Oil and Gas Sector, Greenhouse Gas Reporting Rule for Petroleum and Natural Gas Systems, and Waste Emissions Charge for Petroleum and Natural Gas Systems.
This article explores three key themes for the oil and gas sector: the evolution of methane regulation at the state and federal levels, a preliminary forecast of why and how methane regulation will continue, and practical ways the oil and gas sector can prepare for enhanced enforcement scrutiny.
As Early as 2016, States Led the Way on Methane Regulation
According to the EPA, methane is responsible for approximately a third of anthropogenic climate change, even though it only represents 10% of greenhouse-gas emissions. Referred to as a climate “super-pollutant,” methane traps 20–30 times more heat than carbon dioxide. Methane is also an excellent and affordable fuel—cleaner than oil and coal—creating strong financial incentives to prevent releases. Recent technological advances have helped propel methane regulation, offering new capabilities to both the regulators and the regulated, including satellites that can pinpoint individual facility emissions and advanced emissions monitoring and leak detection technologies. These characteristics make methane emissions regulation and enforcement appear to be a good bang for the regulatory buck in tackling climate change.
Methane regulation in the oil and gas industry is relatively new. State regulation began in Colorado in 2014 with methane emissions targets for storage tanks, separators, and leaking equipment. Colorado’s rules were strengthened in 2019 to address leak detection, tank controls, and performance standards. In 2023, the Colorado Department of Public Health and the Environment (CDPHE) issued the Greenhouse Gas Intensity Verification rule, defining how certain oil and gas facilities must calculate their greenhouse-gas intensity. The American Petroleum Institute and the Colorado Oil and Gas Association issued a statement in support of the 2023 CDPHE rule. To date, empirical evidence from Colorado suggests enhanced leak detection and prevention measures resulted in meaningful progress: In 2016, the director of Colorado’s Air Pollution Control Division reported a 75% decline in the number of sites where methane leaks were detected based on field surveys.
In part because of the early successes in Colorado, traction quickly grew for methane regulation in other states. In January 2016, Pennsylvania, the second-largest producer of natural gas in the nation behind Texas, announced a four-point plan to address methane emissions. In September 2016, California released a rule committing the state to a 40% reduction in methane emissions by 2030 through continuous leak monitoring and prevention requirements, among other measures. State-level regulations likely will continue to gain momentum regardless of what occurs at the federal level. What began in traditionally blue states such as Colorado and California and in the swing state of Pennsylvania has now expanded to traditionally red states, including Texas and Utah.
The Federal Seesaw: Where We Are and What Comes Next
Where We Are. The first-ever federal Clean Air Act performance standards to reduce methane were issued by the administration of President Barack Obama in 2016. The first Trump administration effectively reversed the Obama-era rule in 2020, issuing a new rule that eliminated requirements to install leak detection and monitoring technologies. The administration presented the reversal as fulfilling “President Trump’s promise to cut burdensome and ineffective regulations for our domestic energy industry.” Several major players in the industry publicly opposed the reversal, expressing concern that it would undermine their efforts to promote natural gas as a cleaner-burning fuel. NPR dubbed it the “Methane Rollback That Big Oil Doesn’t Want.” President Biden then reversed course again, announcing an ambitious climate change agenda as part of his Day 1 executive orders.
The centerpiece of the Biden agenda—which far exceeded the Obama agenda on multiple fronts—was the first-ever US climate enforcement initiative. Announced as one of six National Enforcement and Compliance Initiatives for fiscal years 2024–27, mitigating climate change was listed first, as EPA’s top enforcement priority. As one facet of the EPA’s broader climate change enforcement initiative, the EPA specifically indicated its intent to use both civil and criminal authorities to address methane emissions from the oil and gas sector. A comprehensive regulatory basis for this unprecedented enforcement initiative soon followed, which would provide for the following array of new regulatory authorities upon which to pursue enforcement:
- In March 2024, the EPA released revisions to Clean Air Act rules for the Crude Oil and Natural Gas Source category to monitor and control greenhouse gases (in the form of methane) and volatile organic compounds. The revisions impose new requirements to inspect and monitor leaks, flaring, venting, and fugitive emissions for both new and existing sources—codified at 40 C.F.R. Part 60, Subpart OOOOb (pronounced “quad O b”) and OOOOc (pronounced “quad O c”). These rules also include the Methane Super Emitter Program, which is designed to leverage third-party expertise and technology to identify large methane leaks from the oil and gas sector.
- In May 2024, the EPA released revisions to its greenhouse-gas reporting rule designed to ensure that reporting accurately reflects total methane emissions and waste emissions from applicable facilities so as to demonstrate the extent to which a charge is owed under the Waste Emissions Charge (WEC) (i.e., the methane fee).
- In November 2024, the EPA released a new rule to implement a new statutory provision establishing the WEC for petroleum and natural gas systems to incentivize methane reductions. As discussed further below, the WEC was part of the Inflation Reduction Act of 2022, which created the “[m]ethane emissions and waste reduction incentive program for petroleum and natural gas systems” in the new Section 136 of the Clean Air Act.
- In January 2025, PHMSA released a rule to amend the federal pipeline safety regulations to reduce methane emissions from new and existing gas transmission pipelines, gas distribution pipelines, offshore gas gathering pipelines, underground natural gas storage facilities, and liquified natural gas facilities.
The Methane Super Emitter Program was originally proposed as a backstop to other requirements in the EPA’s new methane rule. The program is designed to provide EPA-certified third-party monitors, which can include environmental nongovernmental organizations (NGOs) and universities, with a role in identifying major emissions leaks. Super-emitting events are defined as those that release 100 kg of methane per hour or more. If the notification of the event by the third party to EPA is deemed complete and accurate, then the facility operator must conduct an investigation, perform any appropriate remediation, and report the results. The program is expected to encourage satellite and drone surveillance and the development and use of other mobile surveying technologies, raising public and regulatory scrutiny on the oil and gas production and supply chain.
Unlike the Methane Super Emitter Program, which is a product of EPA rulemaking, the WEC is a statutory program, and thus would require an act of Congress to repeal. The Inflation Reduction Act of 2022 provided new authority under the Clean Air Act to regulate methane with a requirement to impose and collect an annual charge on any methane emissions that exceed specified waste emissions thresholds from applicable oil and gas facilities. The WEC applies only to the highest emitters (i.e., those petroleum and natural gas facilities that emit more than 25,000 tonnes of CO2 equivalent per year as reported under greenhouse-gas reporting rules). The WEC starts at $900/tonne for 2024 methane emissions, increasing to $1,200/tonne for 2025 methane emissions, and $1500/tonne for methane emissions years 2026 and later. The EPA’s WEC implementing rule exempts those entities that have been deemed to come into compliance with the new Clean Air Act NSPS and effluent guidelines for the oil and gas sector. Although concerns have been raised with respect to the effects of the WEC on energy markets, the EPA’s regulatory impact analysis concluded that the WEC and associated abatement costs will have a “negligible impact on natural gas and crude oil prices.” The EPA’s response to comments further concluded that “[t]he minimal impact of the WEC on energy markets indicates that the WEC would not have an appreciable impact on foreign imports and exports of oil and gas.”
What Comes Next? President Trump has already taken steps to unwind what he views as the “harmful and shortsighted policies” of the Biden administration. Two different orders were issued to revoke Biden’s Day 1 Executive Order 13990: “Unleashing American Energy,” discussed above, and “Initial Rescissions of Harmful Executive Orders and Action.” With additional executive action inevitably to follow, Trump’s executive order entitled “Declaring a National Energy Emergency” described the prior administration’s policies as having “driven our Nation into a national emergency.” “Putting America First in International Environmental Agreements” directed the US ambassador to the United Nations to withdraw from the Paris Agreement. The withdrawal also calls into question the US signature on the Global Methane Pledge, another Biden initiative. “Unleashing Alaska’s Extraordinary Resource Potential” seeks to position the current administration to open up the Arctic National Wildlife Refuge to drilling.
There appears to be little question that Biden’s methane agenda will be heavily scrutinized and that there will be concerted efforts to dismantle certain aspects of it. The question presented, however, is whether, and to what extent, the Trump administration will be successful in paring it back. If there is one lesson learned from the federal seesaw, it is that each incoming administration is becoming more and more sophisticated regarding how to fortify its regulatory agenda from attempts by the next administration to destroy it.
The Congressional Review Act (CRA) was enacted to strengthen congressional oversight over federal rulemakings. Congress is empowered to review certain major rules before they take effect if the review can be effectuated within 60 session days of the rule’s submission. Only a simple majority is required; the vote cannot be filibustered. Although the CRA was passed in 1996 during the administration of President Bill Clinton, it has only been used to overturn a total of 20 rules, 16 of which were overturned in a string of successes for the first Trump administration. The Biden administration also successfully used the CRA to upend the Trump administration’s replacement of the Obama-era Clean Air Act NSPS for methane. In a joint resolution issued 30 June 2021 under the CRA, Congress declared the rule to “have no force or effect,” accelerating the timetable for Biden to replace it.
The Trump administration might be able to use the CRA to rescind the WEC rule issued in November 2024 and the PHMSA rule issued in January 2025, but the March 2024 Clean Air Act NSPS/emissions guidelines rule and the May 2024 greenhouse-gas reporting rule are well outside the 60 session-day window. Moreover, rescinding the WEC rule may be of limited utility given that the WEC itself was established via an act of Congress. The administration may be successful in delaying the implementation via recission of the rule under the CRA, but it will ultimately take another act of Congress to repeal the underlying legislation. In that regard, the Trump administration’s best path forward to rescind the WEC may well be an outright legislative repeal of the operative provisions in the Inflation Reduction Act. Doing so, however, would require nearly every Republican vote as well as a budget reconciliation process to obviate the need for a supermajority. This is entirely possible. The Inflation Reduction Act itself passed by a razor-thin margin via budget reconciliation with 51–50 in the Senate and 220–207 in the House. That noted, this 119th Congress has an even narrower margin in the House, with 218 Republicans, 215 Democrats, and 2 vacancies.
It is expected that the Trump administration will not defend the Biden administration’s methane rules in the US Court of Appeals for the District of Columbia Circuit, leaving environmental NGO intervenors to defend them. As noted above, three of Biden’s four methane rules have already been challenged via petitions for review filed pursuant to Clean Air Act Section 307(b)(1), with the fourth challenge likely to follow.
Clean Air Act NSPS and Emissions Guidelines for the Oil and Gas Sector. More than 20 states, in addition to several other organizations, filed petitions for review. A request for an immediate stay of the rule was initially denied by the District of Columbia circuit, then again by the US Supreme Court in a one-sentence order issued by Chief Justice John Roberts on 4 October 2024. The litigation is now proceeding in the District of Columbia circuit as one consolidated case. Petitioners argue, among other things, that the Super Emitter Program amounts to an “unlawful delegation of authority to third parties” and that EPA violated Clean Air Act Section 111(d) by “imposing presumptive standards that significantly limit the States’ ability to implement Section 111(d) plans of their own design, upsetting the Clean Air Act’s cooperative-federalism balance.”
Greenhouse-Gas Reporting Rule for Petroleum and Natural Gas Systems. There were multiple petitions for review filed challenging EPA’s new greenhouse-gas reporting rules. The cases have been consolidated and are now being held in abeyance for procedural reasons to evaluate potential further consolidation with prior actions. A Statement of Issues filed by petitioners indicates that one of the challenges is based on an alleged “excessive burden on small producers operating low production wells.”
Waste Emissions Charge for Petroleum and Natural Gas Systems. Multiple petitions for review to challenge the WEC rule were filed on 16 January 2024, the day before it was to become effective. At least 23 states are among the petitioners. There has not yet been any substantive briefing or statements.
The Trump administration can also attempt to rescind or limit the rules through new notice and comment rulemaking. Rescinding final regulations issued by a previous administration, however, takes significant time and energy. The incoming administration must provide (1) a rational basis as to why the rule should be rescinded, (2) a notice of proposed rulemaking, (3) an opportunity for public review and comment, and (4) a response to public comments. For complex rules, the process can take 2–3 years from beginning to end. Rescinding regulations can also lead to court challenges, tying the rules up in litigation and leaving them enacted while litigation unfolds. Other options include rolling back the rules. In a white paper entitled “Making American Energy Great Again,” the Independent Petroleum Association of America recommended (1) creating a new subcategory with eased standards for low-producing marginal wells and (2) giving states more leeway and time to develop plans to implement requirements for existing sources that differentiate between new and low-producing marginal wells.
Regardless of activity at the federal level, improved monitoring technology will amplify citizen-led efforts to monitor methane emissions. Methane regulation has been propelled by the development of technologies allowing for the relatively easy detection of methane leaks and other emissions. As early as 2014, environmental NGOs have used sensors attached to passenger vehicles to map methane leaks on a street-by-street basis. The prevalence of cheap and user-friendly drones allows just about anyone to search for methane leaks with the right equipment and training. Now, satellites—already over a dozen in orbit—are capable of both regional mapping of methane emissions and point-source identification. Examples of well-funded citizen efforts include new satellites that can detect super-emitters, such as Tanager-1 and MethaneSAT. According to NASA, the Tanager-1 satellite recently detected a 2.5-mile methane plume emanating from a landfill in Pakistan. State agencies may continue to lean into these new technologies and provide avenues for concerned citizens and citizens’ groups to report their methane findings directly. Outsourcing data collection is also a potential means for the government to externalize the costs associated with policing methane emissions and could see adoption by states.
Practical Takeaways for Proactive Companies
Proactive companies can take the following steps to become “inspection ready” in anticipation of increased state and third-party scrutiny:
- Master the regulatory landscape at the federal and state levels to understand how and when methane reduction regulations will apply to your operations.
- Know your greenhouse reporting obligations and engage third-party subject matter expertise, as appropriate.
- Develop, revisit, or enhance voluntary methane evaluation protocols.
- Monitor the financial effects, if any, of the EPA’s recent rulemakings, including the WEC rule, on your business and supply chain.
- Conduct periodic reviews of all public statements issued by the company that relate to air quality or environmental sustainability and verify that all are true, accurate, complete, and defensible based on a record that can be produced.
- Conduct a new owner audit policy review when acquiring a company with oil and gas assets.
- Develop, revisit, or enhance leak detection and repair programs.
- Prepare incident response plans and protocols to address methane releases, including immediate notifications and regulatory and company requirements to conduct internal investigations.
- Train management and staff to respond to federal and state environmental agency inquiries and investigations.
Current science points to the reduction of methane as a cost-effective and a relatively fast method to slow the current rate of climate change. In addition, methane reduction is touted by state regulators as protective of health for affected communities as well as capturing loss and waste of American-produced energy. For all these reasons, regardless of national politics and various challenges to EPA regulations, methane regulation is here to stay and companies should engage now to be best positioned to navigate the regulatory landscape and potential enforcement actions as it continues to evolve.
This article provides a general summary of recent legal developments. It is not intended to be and should not be relied upon as legal advice.