This working paper is a first of its kind guide for US states aiming to enact policies to regulate methane emissions.

It looks at ways to reduce methane leaks from major emissions sources, including technologies to help reduce methane emissions and model rules for states to base future regulations on.

Key Findings

  • Adoption of model rules or similar policies at the state level will help ensure that the US reaches its 2020 and post-2020 GHG emissions reduction targets.
    • With recent increases in natural gas extraction, largely from the combination of hydraulic fracturing and horizontal drilling, many states are confronting the need to regulate extractive industries for the first time, and others are seeing rapid increases in natural gas development.
  • Equipment and measures to prevent or reduce methane leaks can be highly cost-effective. Those leaks contribute to GHG emissions and can be reduced through effective state regulation.
    • Reducing natural gas leakage to one percent or less of total production is an achievable and cost-effective benchmark, and ensures that natural gas is less climate-intensive than diesel fuel and gasoline when used in transportation, and coal when used for electricity generation.
    • In order to achieve that one percent benchmark, significant improvements must take place.

    • Successful regulation of methane emissions must take place throughout the supply chain on both a state and federal level.
    • Reducing methane release from Natural Gas sources is doable now and is cost effective.

    Executive Summary

    The techniques of hydraulic fracturing and horizontal drilling, in combination, have opened up vast new areas for natural gas production, and low-cost natural gas has altered the energy landscape in the United States. Prior to the last decade, some states located in shale gas basins had little experience with significant oil and gas extraction, but are now among the leaders in the production of natural gas. The rush to develop this new resource has resulted in numerous environmental challenges, including water and air quality concerns, leading many to question the natural gas industry’s environmental record and potentially jeopardizing its social license to operate. Preventable emissions of methane—a potent greenhouse gas—are among the easiest of those challenges to address, and policies that address those emissions have the co-benefit of reducing local air pollution.

    Methane emissions are not a new phenomenon, but the pace of natural gas development in the United States has brought much deserved attention to the issue. According to the U.S. Energy Information Administration, marketed production of natural gas increased by 44 percent between 2005 and 2014, and is projected to increase another 30 percent or so by 2040. If the United States is to develop its natural gas resource to such an extent, it is imperative to address the air quality, water quality, and climate concerns that such development will bring. Acknowledging the broader environmental impacts of natural gas development, this paper focuses on practical solutions that have been demonstrated to reduce methane emissions significantly without creating undue economic hardship for industry or consumers.

    Through case studies, key recommendations for new rules, and descriptions of best practices, this working paper can help state officials to determine how best to structure future state-level policies—including measures for complying with forthcoming national emissions standards under the Clean Air Act—to reduce methane emissions from natural gas development.