:: H. Rept. 117-__—Report from the Committee on Energy and Commerce to accompany H.J. Res. 34 (House companion resolution to S.J. Res. 14)

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117TH CONGRESS	" HOUSE OF REPRESENTATIVES !	REPORT
1st Session	117-

PROVIDING FOR CONGRESSIONAL DISAPPROVAL UNDER CHAPTER 8 OF TITLE 5, UNITED STATES CODE, OF A RULE SUBMITTED BY THE ENVIRONMENTAL PROTECTION AGENCY RELATING TO ''OIL AND NATURAL GAS SECTOR: EMISSION STANDARDS FOR NEW, RECONSTRUCTED, AND MODIFIED SOURCES REVIEW''

JUNE --,2021.-Committed to the Committee of the Whole House on the State of

the Union and ordered to be printed

Mr. PALLONE, from the Committee on Energy and Commerce,

submitted the following

R E P O R T

together with

VIEWS

[To accompany H.J. Res. 34]

[Including cost estimate of the Congressional Budget Office]

The Committee on Energy and Commerce, to whom was referred the joint resolution (H.J. Res. 34) providing for congressional disapproval under chapter 8 of title 5, United States Code, of a rule submitted by the Environmental Protection Agency relating to ''Oil and Natural Gas Sector: Emission Standards for New, Recon- structed, and Modified Sources Review'', having considered the same, reports favorably thereon without amendment and recommends that the joint resolution do pass.

g:VHLC6102161021.143.xml June 10, 2021 (3:29 p.m.)

CONTENTS

Page

1. Purpose and Summary

1. Background and Need for the Legislation

1. Committee Hearings

IV. Committee Consideration

1. Committee Votes
   VI. Oversight Findings
   VII. New Budget Authority, Entitlement Authority, and Tax Expenditures
   VIII. Federal Mandates Statement
   IX. Statement of General Performance Goals and Objectives

1. Duplication of Federal Programs
   XI. Committee Cost Estimate
   XII. Earmarks, Limited Tax Benefits, and Limited Tariff Benefits
   XIII. Advisory Committee Statement
   XIV. Applicability to Legislative Branch
   XV. Section-by-Section Analysis of the Legislation
   XVI. Changes in Existing Law Made by the Bill, as Reported XVII. Dissenting Views

I. PURPOSE AND SUMMARY

H.J. Res. 34, a joint resolution providing for congressional disapproval under chapter 8 of title 5, United States Code, of a rule submitted by the Environmental Protection Agency relating to "Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources Review", was introduced on March 26, 2021 by Representatives Diana DeGette (D- CO), Scott Peters (D-CA), Conor Lamb (D-PA) and 26 other original cosponsors and was referred to the Committee on Energy and Commerce.

If the joint disapproval resolution is enacted, the 2020 Rescission Rule "shall be treated as though such rule had never taken effect,"1 reinstating the methane and volatile organic compound (VOC) pollution reduction requirements established under the 2012 and 2016 Oil and Gas Rules.2

The Clean Air Act (CAA) authorizes and mandates the Environmental Protection Agency (EPA) to protect Americans from dangerous air pollution. Under section 111(b), the EPA must set new source performance standards (NSPS) for categories of stationary sources that cause, or significantly contribute to, air pollution that endangers public health or welfare.3 In 2012 and 2016, the EPA promulgated rules adding emission standards for greenhouse gases (GHGs) (in the form of limitations on methane emissions) and updating VOC emission standards for new, reconstructed, and modified sources throughout the production, processing, transmission, and storage segments of the oil and gas sector.4

In 2020, the EPA issued deregulatory rules that rolled back the 2012 and 2016 standards.5 Notably, the 2020 Rescission Rule eliminated both methane pollution standards for the oil and gas sector and all air pollution standards for the transmission and storage segments of the oil and gas sector. It also removed the predicate for EPA's obligation to address the extensive methane pollution emitted by existing sources and established a new, non-statutory requirement that EPA make an additional, pollutant-specific finding of significant contribution (SCF) to endangerment before addressing harmful air pollution from a sector already regulated under the CAA.

The Congressional Review Act (CRA) is an oversight tool that Congress may use to overturn a major rule issued by a federal agency.6 The CRA requires agencies to report on their rulemaking activities to Congress, provides Congress with special procedures to consider legislation to overturn those rules, and prevents agencies from issuing the same or rules that are substantially the same in the future.

The purpose of reporting H.J. Res. 34 is to clearly demonstrate the Committee's disapproval of a deregulatory rule that removed critical health and welfare protections. The Committee's intent in taking that action is to put those protections back into place. Further, reporting H.J.

1. 5 U.S.C. § 801(f).
2. U.S. Environmental Protection Agency, Oil and Natural Gas Sector: New Source Performance Standards and National Emission Standards for Hazardous Air Pollutants Reviews (Aug. 16, 2012) 77 Fed. Reg. 49490 (Hereinafter 2012 Oil and Gas Rule); U.S. Environmental Protection Agency, Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources 81 Fed. Reg. 35824 (June 3, 2016) (Hereinafter 2016 Oil and Gas Rule).
3. Clean Air Act § 111(b)(1)(A)-(B).
4. 2012 Oil and Gas Rule; 2016 Oil and Gas Rule.
5. U.S. Environmental Protection Agency, Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources Review 85 Fed. Reg. 57018 (Sept. 14, 2020) (Hereinafter 2020 Recission Rule). H.J. Res. 34 and S.J. Res. 14 only disapprove the 2020 Rescission Rule.
6. 5 U.S.C. §§ 801-808.

Res. 34 is intended to comply with the special procedures under the CRA to consider legislation to overturn the rule.

Passage of this resolution of disapproval will indicate Congress' disapproval of many aspects of the 2020 Rescission rule and specifically rejects: (1) removing the transmission and storage segments of the oil and natural gas production sources category; (2) repealing standards for emissions of GHGs (in the form of limitations on methane emissions); (3) negating the EPA's statutory obligation to regulate existing oil and gas sources under section 111(d); and (4) creating new legal hurdles by requiring a pollutant-specific SCF before regulating a particular pollutant under section 111, despite no basis in the plain language of section 111 to do so. The Committee also strongly disagrees with the legal interpretations underpinning the 2020 Rescission Rule.

On the other hand, the Committee agrees with the legal underpinnings of the 2016 Oil and Gas Rule, which would be reinstated upon enactment of the resolution of disapproval. Passage of the resolution of disapproval indicates Congress' support and desire to immediately reinstate:

1. the transmission and storage segments to the regulated source category; (2) standards for GHGs (in the form of limitations on methane emissions) for new and modified sources in the production, processing, transmission, and storage segments; (3) EPA's statutory obligation to regulate existing oil and gas sources under section 111(d); and (4) EPA's prior interpretation that a pollutant-specific SCF is not required before regulating a particular pollutant under section 111.7
   As discussed in the following section, effectively regulating methane emissions from oil and gas sources is critical to avoiding the worst climate endangerment, and to protecting human health and welfare. To that end, upon reinstatement of the 2016 Oil and Gas Rule, the Committee strongly encourages the EPA to take swift action to reverse the damage caused by the 2020 Rescission Rule, strengthen its regulations for new sources, and fulfill its statutory obligation to issue existing source guidelines under section 111(d).

1. BACKGROUND AND NEED FOR LEGISLATION

I. The Current and Growing Methane Pollution Problem

Methane is a potent GHG. Over a 100-year period, the emission of a ton of methane contributes 28-36 times as much to global warming as a ton of carbon dioxide, and is about 84 times more powerful when measured over a 20-year timeframe.8 Historical emissions of methane contribute almost one-third of the total present-day warming effects resulting from

1. The Senate passed the companion resolution on April 28, 2021. To avoid the need for a conference and expedite its path to the President, the CRA also includes automatic "hookup" procedures. That is, once one chamber of Congress passes a disapproval resolution, it is then received by the other chamber, not referred to a committee, and any vote in the receiving house will be on the disapproval resolution initially passed by the other chamber.
2. U.S. Environmental Protection Agency, Understanding Global Warming Potentials (updated Sept. 9, 2020) (epa.gov/ghgemissions/understanding-global-warming-potentials);See Table 8.7 of International Panel on Climate Change, Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (2013) (www.ipcc.ch/report/ar5/wg1/).

human-contributed emissions of all GHG.9 The effects of this warming include: rapidly rising temperatures, ocean acidity, sea level rise and other flooding, more frequent droughts, heat waves and wildfires, air quality impacts, increases in temperature-related illnesses and death, and many other harms experienced by communities across the United States.10

The oil and gas source category is the largest industrial emitter of methane in the United States, and consists of hundreds of thousands of sources.11 According to EPA data, it emits 7,280,000 metric tons of methane per year, or 28 percent of total U.S. methane emissions.12 Production and processing sources emit at least 5,800,000 tons of methane, or 80 percent of the total emissions from the oil and gas source category. Transmission and storage sources emit the remaining approximately 20 percent. The actual amount of emissions is almost certainly higher,13 with studies showing the EPA underestimates methane emissions from the oil and gas sector by approximately 60 percent.14 A recent analysis found that the oil and gas sector released over 16 million metric tons of methane in 2019.15

Oil and gas sources also emit VOCs, which contribute to ozone and other local air pollution that cause local health impacts. Children under the age of 5 and elderly people over the age of 65 are especially sensitive to those health risks, and low-income and environmental justice communities are, as well. Oil and gas sources release other toxic air pollution alongside methane and VOCs that can worsen asthma, affect lung development in children, and increase cancer risk, immune system damage, and neurological, reproductive, and developmental problems. This dangerous pollution impacts more than nine million Americans who live in the frontline

1. Id., Supplementary Material at Table 8.SM.6, pg. 8SM-13 Table 8.SM.6, pg. 8SM-13, (www.ipcc.ch/site/assets/uploads/2018/07/WGI_AR5.Chap_.8_SM.pdf).
2. See. IPCC, Fifth Assessment Report (2014)

(www.ipcc.ch/site/assets/uploads/2018/02/SYR_AR5_FINAL_full.pdf); IPCC, Special Report: Global Warming of 1.5°C (2018) (www.ipcc.ch/sr15/); USGCRP, The Impacts of Climate Change on Human Health in the United States: A Scientific Assessment (2016) (www.health2016.globalchange.gov); USGCRP, Fourth National Climate Assessment Volume II: Impacts, Risks, and Adaptation in the United States (2018) (https://nca2018.globalchange.gov/downloads/NCA4_2018_FullReport.pdf).

1. The 2016 Oil and Gas rule covered roughly 60,000 wells constructed since 2015, and there are more than 800,000 existing wells in operation. Comments on 2019 Proposed Rule, (www.edf.org/sites/default/files/content/Joint%20Environmental%20Comments%20on%20EPA%27s%20Prop osed%20NSPS%20Review.pdf); Environmental Defense Fund, Federal Methane Map, Oil and Gas Population: United States (www.edf.org/federalmethanemap).
2. This value is from the EPA's 2021 Greenhouse Gas Inventory (GHGI) and includes emissions in the "oil and gas source category" which covers production through transmission and storage, but not all oil and gas methane emission sources are included in the GHGI. For example, it does not include the distribution segment or abandoned oil and gas wells. For all oil and gas emissions included in the GHGI, total methane emissions are 7.9 million metric tons, or 8.1 if including abandoned oil and gas wells.
3. See Joannes D. Maasakkers, et al., 2010-2015 North American methane emissions, sectoral contributions, and trends: a high-resolution inversion of GOSAT observations of atmospheric methane, European Geosciences Union, Atmos. Chem. Phys., (Mar. 22, 2021) (www.acp.copernicus.org/articles/21/4339/2021/); Benjamin Hmiel, et al., Preindustrial 14CH4 indicates greater anthropogenic fossil CH4 emissions, Nature (Feb. 19, 2020) (www.nature.com/articles/s41586-020-1991-8).
4. Alvarez, R. et al., Assessment of methane emissions from the U.S. oil and gas supply chain, Science (Jul. 13, 2018) (www.science.sciencemag.org/content/361/6398/186).
5. Environmental Defense Fund, 2019 U.S. Oil & Gas Methane Emissions Estimate (Apr. 2021) (www.blogs.edf.org/energyexchange/files/2021/04/2019_EDF-CH4-Estimate.pdf).