The Environmental Protection Agency announced plans to rescind its policy targeting methane emissions from oil and gas operations, a regulatory reversal that upstream trade groups have pressed for since January.

The agency has not yet published a Federal Register notice identifying which subparts of the methane rule would be withdrawn. The action targets the waste emissions charge and associated leak-detection obligations that EPA finalized in December 2023 under authorities granted by the Inflation Reduction Act.

What does the rescission cover?

The 2023 rule imposed a fee on emissions from large oil and gas facilities exceeding statutory intensity levels. The charge started at $900 per metric ton in 2024 and was scheduled to rise to $1,500 per metric ton in 2026. Operators above the threshold also faced prescriptive monitoring, repair, and reporting requirements under Subparts OOOOb and OOOOc.

Pulling the rule removes both the fee schedule and the technology mandates, returning the sector to earlier standards under the 2016 New Source Performance Standards.

Why upstream operators pushed for rollback

The American Petroleum Institute and the Independent Petroleum Association of America argued the fee duplicated state-level programs in Colorado, New Mexico, and Wyoming and imposed costs unsupported by recovered gas volumes. EPA Administrator Lee Zeldin framed the rule as a barrier to domestic production in his early tenure.

A rescission also lifts planning uncertainty for operators weighing investments in vapor recovery units, flare gas recovery systems, and continuous monitoring. Capital budgets sized against the $1,500/ton threshold would need reworking once the fee schedule is no longer in force.

The circular economy angle

For the resource recovery sector, methane represents both a feedstock and a liability. Leak-prone upstream operations vent gas directly to atmosphere rather than to processing. Recovery contractors installing vapor capture, plunger lifts, and gas-to-liquid equipment built business models around the same methane the policy aimed to internalize.

• Vapor recovery service providers could see reduced demand for compliance-driven retrofits.
• Methane detection specialists using satellite, drone, and continuous fixed sensors face a slower mandate-driven growth curve.
• Gas-capture equipment vendors tied to flare gas recovery lose a regulatory floor under their sales pipeline.

Voluntary frameworks from OGCI, the Methane Guiding Principles, and the Methane Finance Study Group continue to apply independent reporting and intensity targets, regardless of EPA action.

What happens next

A rescission requires a proposed rule, a public comment period, and a final determination — a process that historically runs six to twelve months from announcement to publication. Industry counsel expect EPA to file the proposed rescission within 60 days. Litigation from environmental groups is likely once the proposal appears in the Federal Register.

Operators should treat the December 2023 rule as enforceable until the Federal Register notice lands. State-level rules in California, Colorado, and New Mexico remain in force independent of federal action.

The milestone to watch: the proposed rescission's docket number and the comment deadline, both of which will determine how quickly the policy reversal reaches final form.