Scattered and Dissonant: The Clean Air Act, Greenhouse Gases, and Implications for the Oil and Gas Industry

Abstract

In the midst of a domestic oil and gas production revolution, the Environmental Protection Agency (EPA) has constructed a web of findings and regulations to control greenhouse gas (GHG) emissions from stationary sources under the auspices of the Clean Air Act. This Article explores the theoretical and practical implications for the oil and gas industry of EPA’s Clean Air Act GHG regulatory regime that, in light of congressional paralysis, will continue to expand beyond major new and modified oil and gas facilities such as refineries and natural gas processing plants. Future rulemakings directly aimed at the oil and gas industry will likely include lower regulatory thresholds for permitting and control technology requirements, performance based GHG emissions standards for refineries, and amendments to recently-adopted air emissions performance standards for oil and gas production to address GHG. Indirectly, contemplated rules for new and existing power plants may effectively eliminate coal as a substitute for natural gas in the generation of electricity, causing the domestic price of natural gas and electricity to increase amid inevitable liquefied natural gas exports to foreign nations. If a federal market-based program is ever adopted, GHG reporting requirements indicate that oil and gas companies could be assessed and forced to pass on to consumers the cost of GHG automobile emissions. All of these regulatory programs will eventually sweep in smaller independent oil and gas producers and increase the cost to produce, process, and refine oil and gas.