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Coming to a Shale Basin Near You: Emerging Regulatory Frameworks For Controlling Methane Emissions and Flaring From Oil and Natural Gas Sources

John R. Jacus, Eric Waeckerlin, Development Issues in Major Shale Plays

Two of the most significant concerns that are emerging from the ongoing debate and dialogue about our U.S. shale development revolution are (1) the unprecedented level of awareness and concern about the practice of flaring “associated gas,” and (2) the issue of fugitive methane emissions from the oil and gas sector and how to regulate them. These flaring and methane emissions concerns are now being much more aggressively examined than in the past, in the context of GHG reporting and earliest-stage federal and state regulation of GHGs (including methane) under the Clean Air Act and its state counterparts, since comprehensive federal legislation regulating GHG emissions has proven elusive. Moreover, both of these regulatory developments are grounded in statutory and case law not specific to the regulation of methane or other GHGs, and which require that proper exercise of the authority to regulate according to traditional measures of the costs and benefits of proposed regulations.

The problem of GHG regulation is very different from that of criteria air pollutant or hazardous air pollutant regulation. Whether recent and anticipated future efforts to regulate methane and reduce flaring discussed below may proceed successfully under authorities not created with the regulation of methane in mind, and for which traditional measures of the benefits of methane or CO2 regulatio