Knowing is Half the Battle: EPA Final Rule Sets Forth Greenhouse Gas Reporting Requirements for Petroleum and Natural Gas Industries

In October of 2009, EPA launched the Greenhouse Gas Reporting Program with its issuance of 40 CFR Part 98, requiring reporting of Greenhouse gas (GHG) emissions from large sources and suppliers in the United States with the goal of gaining more insight into where GHGs are originating and, therefore, ultimately developing policies and procedures for reduction of these emissions. As part of EPA’s ongoing development of the Greenhouse Gas Reporting Program, on November 8, 2010, EPA issued a final rule setting forth the reporting requirements for the petroleum and natural gas industry.Petroleum Facility


Beginning January 1, 2011, petroleum and natural gas industries that emit more than 25,000 metric tons of CO2 equivalent per year will be required to monitor and report such emissions due to equipment leaks, intentional venting, gas flaring and combustion. These industries are the largest human-originated (as opposed to animal-originated…) emitters of methane, releasing as much as 40 million passenger cars annually.

The first question everyone always wants to ask when a rule is issued is: What is this going to cost me? EPA puts this figure for the private sector at about $62 million in the first year and about $19 million for subsequent years. However, EPA assures the public that such dollar figures compute to low average cost-to-sales ratios, meaning that the rule will not likely result in a significant change in pricing or quantities in the affected markets.

EPA hopes that this final rule will aid in the identification of cost-effective methods for lowering emissions of methane and other GHGs as well as assist local, state, and federal lawmakers in considering future climate change related policy decisions.