Decarbonization efforts in the oil and gas sector continue to gain momentum but face significant challenges. In our previous blog, we discussed the challenges oil and gas companies face in reducing upstream greenhouse gas (GHG) emissions and highlighted several initiatives major operators such as ExxonMobil, Chevron, and Shell have made in GHG emissions reduction. However, beyond the broader focus on reducing GHG emissions, there is increasing regulatory pressure worldwide, including in the U.S., specifically targeting methane emissions reduction as methane is 25 times more potent than CO2 at trapping heat and is a major contributor to climate change.
The U.S. Environmental Protection Agency (EPA) has announced two major regulatory updates: Subpart OOOOb/c (Quad Ob/Oc) under the New Source Performance Standards (NSPS) and Subpart W under the Greenhouse Gas Reporting Program (GHGRP). These updates establish stricter requirements for controlling, monitoring, and reporting methane emissions in the oil and gas sector. Subpart Quad Ob took effect in May 2024, while oil and gas operators have until 2026 to comply with Subpart Quad Oc. Additionally, the revised rules for Subpart W will go into effect starting on January 1, 2025.
Below, we summarize the key impacts of these new methane regulations on the oil and gas industry:
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