Today, Jack Andreasan Cavanaugh and I led a coalition letter to the Environmental Protection Agency urging to reconsider the proposed rule amending source categories for the Greenhouse Gas Reporting Program.
Dear Administrator Zeldin,
The Foundation for American Innovation strongly supports the Administration’s commitment to regulatory efficiency, market freedom, and unleashing American ingenuity to lead the global economy. We believe that American companies, particularly in the energy and technology sectors, are best positioned to solve the world's most complex challenges, including the imperative to win the AI race, and create an abundance of energy to increase prosperity.
However, the proposed amendment to the Environmental Protection Agency’s (EPA) Greenhouse Gas Reporting Program (GHGRP) risks destabilizing critical federal policy mechanisms and undermining the competitive advantage that leading US firms have secured. EPA’s objective of reducing the administrative and bureaucratic burden on reporting entities is important; however, amending the GHGRP to eliminate the majority of source categories is an overcorrection that fails to account for the program’s essential role as the preeminent source of verified, standardized, and compulsory data that powers both our competitive advantage in oil and gas and the burgeoning digital economy.
We urge the EPA (RIN 2060–AW76) and instead focus on modernizing and streamlining the GHGRP to enhance its efficiency and ensure the US maintains its global competitive edge.
1. The Value of the GHGRP for American Energy Leadership
The GHGRP is the linchpin for attracting billions in private capital into the demand-driven, low-carbon energy sector, particularly for American oil and gas (O&G) producers who are market leaders in environmental stewardship and high-quality products.
Critical Link to Federal Tax Incentives (45Q & 45V): The success of American innovation in Carbon Capture, Utilization, and Sequestration (CCUS) and hydrogen is underpinned by the 45Q and 45V tax credits. These tax credits are designed to incentivize investment and job creation in technologies that enhance our global competitiveness. The proposed rule acknowledges the vital role that GHGRP has served in facilitating the administration of these tax credits and recognizes that the removal of most source categories under Part 98 would require the Treasury Department and the Internal Revenue Service (IRS) to revise guidance. As written, the proposed rule would have a cascading effect on federal regulatory policy, requiring other federal agencies that rely on GHGRP data to revise existing rules, which would both increase the administrative burden and inhibit taxpayers from claiming tax credits.
- 45Q Verification: For secure geological storage or enhanced oil recovery projects utilizing Class VI or Class II injection wells, the Treasury Department mandates the use of GHGRP Subpart RR reporting to verify secure storage and quantify the credit amount. Repealing the GHGRP immediately removes the necessary legal and technical reporting framework for claiming 45Q, risking the halt of 48 existing monitoring, reporting and verification plans for EOR fields, and over 190 announced CCUS projects representing billions in private investment. As Tier One and Tier Two shale oil inventories are decreasing, EOR is an important tool to maintain US market share, O&G jobs, and energy security. 45Q is a crucial economic driver that facilitates the continued operation of otherwise depleted reservoirs, and the removal of key GHGRP source categories jeopardizes the viability of these operations and American energy dominance.
- 45V Verification: Hydrogen projects relying on natural gas must demonstrate their emissions intensity to qualify for 45V credits. GHGRP data provides the verifiable, government-backed lifecycle emissions data required for O&G inputs to secure project financing and access the highest credit tiers. Suspending the emissions reporting from petroleum and natural gas systems (Subpart W) until RY2034 would undermine the credibility and accessibility of the 45V credit and discourage investment in the US hydrogen economy.
Low-Carbon O&G Competitiveness: O&G production has a verifiable, economy-wide advantage in emissions intensity compared to foreign competitors, including Russia, Venezuela, and China. This superior performance is quantified and validated by the GHGRP. As major markets like the European Union implement the Carbon Border Adjustment Mechanism (CBAM) and other emissions-based trade tariffs, the GHGRP provides American exporters with the only internationally credible, federally verified dataset to prove their commercial superiority and out-compete foreign producers. In this way, eliminating the GHGRP represents a form of disarmament in the face of global trade competition. While the proposed rule would not prevent O&G producers from developing and reporting through alternative voluntary frameworks, these alternative approaches lack the credibility and integrity of the GHGRP.
2. The Digital Economy’s Reliance on Verifiable Energy Data
The explosive growth of Artificial Intelligence (AI) and Hyperscale Data Centers demands reliable, low-carbon power, often supplied in the form of natural gas with certified low-emissions intensity attributes.
Hyperscalers depend on GHGRP data; as hyperscale data centers are more widely deployed, they are coming under increased scrutiny from local communities around both electricity costs and environmental impact. Relying on dozens of fragmented, expensive, and non-standardized third-party verification schemes – the inevitable result of the proposed rule – will be inefficient and lack the regulatory integrity that a federal program provides. The GHGRP’s uniform, compulsory, and publicly available data is the only way for the digital industry to efficiently and credibly track the emissions intensity of the energy they purchase to power their operations. Innovation and deployment thrive on reliable data.
3. GHGRP Repeal is a Net Cost Burden
The proposed rule estimates that the suspension of Subpart W reporting until 2034 and the elimination of all other reporting categories will save American businesses billions in compliance costs. But the compliance cost savings are unlikely to outweigh the increased cost of private, third-party verification. The resulting cost increases will be passed to consumers, and will jeopardize the competitiveness of the US energy sector while new voluntary reporting frameworks are developed.
If the proposed rule is implemented as written:
- Companies relying on the data for 45Q/45V tax credits, international trade compliance, or state-level policy will not stop measuring and verifying emissions. They will simply be forced to develop and deploy fragmented, duplicative, and bespoke monitoring, reporting, and verification (MRV) systems.
- Repeal will inevitably spur the proliferation of divergent sectoral and state-level reporting programs, requiring multi-state operators to comply with a costly and complex patchwork of standards. This regulatory burden will far exceed the cost of complying with one, uniform federal program.
- The total cost to industry will be higher as businesses internalize the costs of developing private MRV systems, pay third-party auditors (who lack the GHGRP’s data authority), and navigate dozens of conflicting state regimes.
Alternative Pathways for Regulatory Efficiency
If the Administration is nevertheless committed to reducing the GHGRP burden, we propose focusing on modernization and targeted refinement, which preserves the program’s value while enhancing efficiency. Alternative pathways for the GHGRP would include:
Maintain & Refine
Prioritize targeted modifications to reduce inefficiency in the quality of data and reduce compliance hours without sacrificing rigor. Keep Subparts RR and VV intact as currently written.
Ensures data integrity for 45Q/45V while immediately addressing industry-identified burdens, proving that compliance and efficiency are compatible.
Voluntary Reporting
Maintain the current GHGRP source categories, but discontinue compulsory reporting and allow facilities, suppliers, and injection sites to make the decision to report or not.
Ensures capital certainty for tax credits that rely on GHGRP, provides trusted verifiability, and keeps costs of compliance lower.
Raise Reporting Threshold
Substantially raise the reporting threshold (e.g., to 150,000 MT CO2e) to fully exempt smaller businesses, while retaining reporting obligations for the largest facilities that account for over 90% of US emissions.
Focuses regulatory effort on the most material sources, achieving regulatory relief for small operators without sacrificing the critical data integrity needed for trade and tax credits.
Phased Delay of Repeal
If removal of all source categories and suspension of Subpart W is unavoidable, mandate a minimum two-year delay of the effective date.
Provides the US Treasury time to develop alternative MRV protocols for 45Q and 45V, and grants O&G and Hyperscale firms necessary lead time to develop their own non-GHGRP compliant reporting structures.
We urge the EPA to recognize GHGRP’s value as a source of verifiable, consistent data that serves as a cornerstone of American energy and digital competitiveness. Rather than repeal the GHGRP, a final rule should encourage innovation through regulatory clarity.
