Current EPA Administrator Lee Zeldin announced on Sept. 21, 2025, a proposal to roll back GHG reporting requirements until 2034. This would affect about 8,000 facilities and is projected to save up to $2.4 billion over 10 years. But let’s take a step back and look at the GHG program.
GHG background. The GHG program can be traced back to a Supreme Court ruling in Massachusetts vs the EPA in 2007. This ruling established GHG emissions as pollutants under the Clean Air Act (CAA). The EPA then issued an Endangerment Finding, released in 2009. In 2009, the Obama administration established an Interagency Working Group that developed the Social Cost of Carbon. This group developed a formula to calculate the impact of CO2 on society to justify the regulation of CO2 and help in its endangerment finding. This provided the legal background for the EPA to issue its Endangerment Finding.
GHGs then began regulation under the CAA in 2010. The Biden administration developed a Waste Emission Charge (WEC) under the Inflation Reduction Act (IRA) that amended the CAA. Its’ the WEC that was already delayed by the Trump administration on the Big, Beautiful Bill (BBB) until 2034. So, this new GHG rollback is consistent with that change, rolling back the reporting until 2034.
Social cost of carbon. The social cost of carbon has always been an interesting topic to me, because if you didn’t trust the government before, this will just drive you deeper into distrust. A group of handpicked scientists (I use this term loosely), used four climate models to determine the impact of CO2. None of these models included Carbon Fertilization. I will get to this a little later. So, they added the impact of Carbon Fertilization to one model. And that, alone, showed that CO2 had a more positive impact than negative. That’s only using Carbon Fertilization in one of four models. They downgraded the results of Carbon Fertilization by about 70% and added it back in to just one of the four climate models, and all of a sudden, CO2 is bad again.
So, new regulations go through a review by the Office of Management and Budget (OMB), and OMB uses discount factors to look at the future cost of a regulation. Under their normal 3%, 5% and 7% discounting, it was determined that the cost impact was reduced to nothing. For this regulation and only this regulation, the OMB was forced to use new discount factors of 1%, 3% and 5%, so that there will still be an impact from CO2 to justify the regulation. Now that’s some political gymnastics by a group of so-called scientists. Not a very scientific process if you ask me.
Carbon Fertilization. Japanese researchers recognized that CO2 is used to increase plant growth, and greenhouses have been adding CO2 for this purpose for years. So, they looked at the impact of increasing temperature and its damage to food-growing crops and the fertilization impact of the CO2 and which one wins out. What they found is that even with the increasing temperature, the CO2 or Carbon Fertilization increased food yields by 30%. This result was completely different than what most climate scientists were telling us about CO2 temperature and food supply. This 30% was reduced to 10% by the people working on the social cost of carbon to keep their narrative going.
CO2 and temperature. My other pet peeve beyond the social cost of carbon is the discussions over CO2 and its correlation with increasing temperature. If you ever had a cold carbonated beverage, you’ve experienced the bubbly sensation of CO2. If you take that same beverage and let it warm, it goes flat—no more bubbly sensation. CO2 solubility is a function of temperature, so what does that mean? Water holds CO2, and colder water holds more CO2, and warmer water holds much less.
So, as the world warms, and 70% of the world is covered with water, that water will release CO2. Yes, increasing temperature correlates with increasing CO2. But while CO2 is a greenhouse gas and causes warming, the warming also causes more CO2 to release from water, so warming is increasing CO2, while CO2 is also a GHG. As a result, CO2 is over-emphasized as a GHG, something most genuine modelers have already recognized. We overstate the impact, but don’t get me wrong, there is an impact.
Back to the rollback. According to the publicly available information, over 80% of the cost savings are directly related to oil and gas activities. This isn’t a surprise, because the WEC and other provisions of the CAA were targeted to the oil and gas industry. So, what are the long-term impacts to this regulation? Well, opponents to the rollback will say it takes away transparency. But a 2021 National Bureau of Economics research study found that power plants impacted by GHG regulation only reduced emissions by 7%, while publicly traded companies showed 10% reductions.
The same study also reported that companies were shifting emissions to non-reporting facilities, which are facilities not covered by the regulation. So, it appears shareholder pressure had a greater impact than regulation, but do we really know what the reduction was, if any emissions were just shifted? So, let me ask you, did we really have transparency?
45Q and the Rollback. I’ve talked plenty about the 45Q and don’t worry, it’s not going away with the rollback. In fact, under the Big Beautiful Bill, the Trump administration increased the EOR tax from $60 to $85/ton, so this administration seems to support the 45Q.
But there is an impact. You see, besides tracking, monitoring and reporting the CO2 for 45Q eligibility, the same CO2 was reported under the GHG reporting requirements. Essentially, your CO2 emissions were validated under the GHG Reporting requirements, which are being rolled back. Without them, you are self-reporting your emissions for 45Q. Some say that investors will shy away without a mechanism to verify the emissions. Fortunately, the IRS has recently announced they will issue guidance soon for 45Q reporting and validation that should solve this problem.
Other Impacts. Many countries and the EU have, or are developing, emission-based standards for imports. In addition, you have the methane standards in the EU for LNG, and the CLEAN Initiative launched by Japan and South Korea, which are emission standards for LNG. So, how will U.S. companies comply with these standards, if they are not being validated. Hopefully, the IRS guidance resolves this as well.
This battle isn’t over. Lee Zeldin’s EPA still has to overcome the Endangerment Finding and the original Supreme Court ruling that recognized GHGs as a CAA pollutant. Expect there to be challenges to this proposal. But as always, I will keep you updated. Until next time, keep up the good fight. WO
MPATTON@HYDROZONIX.COM / MARK PATTON is president of Hydrozonix, an oil and gas-focused water management company. He is a chemical engineer with more than 25 years of experience developing new technologies for wastewaters and process residuals.