Technical Comments on the Social Cost of Methane As Used in the Regulatory Impact Analysis for the Proposed Emissions Standards for New and Modified Sources in the Oil and Natural Gas Sector

07 December 2015
Dr. Anne E. Smith, Dr. Sugandha Tuladhar, and Scott Bloomberg

The U.S. Environmental Protection Agency (EPA) has proposed emission standards for methane (CH4) and volatile organic compounds from new and modified sources in the oil and natural gas sector. EPA's Regulatory Impact Analysis (RIA) for this proposed rule monetizes benefits estimates using a new metric derived by EPA staff called the “social cost of methane” (SC-CH4). In this report, NERA authors identify technical issues in EPA's new SC-CH4 estimate, perform sensitivity analyses, and characterize the quantitative uncertainty these issues imply for the net benefits of the proposed rule.