On March 23, 2017, the California Air Resources Board (“ARB”) adopted regulations for Greenhouse Gas Emission Standards for Crude Oil and Natural Gas Facilities (“Methane Regulations”).  The Methane Regulations impose emission controls on offshore and onshore oil production and processing facilities and at natural gas compressor stations, underground storage facilities, and gathering and boosting stations.

The purpose of the Methane Regulations is to achieve the emissions standards of the California Global Warming Solutions Act (Assembly Bill 32) for the oil and gas industry.  The lengthy text of the Methane Regulations addresses standards for emissions from every component of the oil and gas industry, including mandates for best practices management plans for vapor collection, extensive operating record requirements, and measurement of flow rates from well casing vents.

The oil industry has expressed concerns about the cost of implementation for certain provisions of the Methane Regulations, especially in light of the lack of any analysis quantifying a benefit to be achieved from the costly new requirements.  Notably, the Methane Regulations impose a more stringent leak detection and reporting (“LDAR”) program than that currently in use.   Industry recommended that if ARB staff finds that increased inspections do not correlate with a reduction in leaks, ARB should consider reducing the frequency of inspections, but this suggestion was not adopted.  Section 95669(b) of the Methane Regulations clarifies that components subject to a local air district inspection program that is in place by January 1, 2018 are not subject to the LDAR requirements, however.

The current regulations can be found at California Code of Regulations, Title 17, §§ 95665 et seq. and updates are available on ARB’s webpage.