California Passes Bill to Cut Methane Waste from Oil and Gas Operations

On September 12, 2025, the final day of California’s legislative session, state lawmakers passed a bill aiming to reduce methane waste from the oil and gas sector. The bill, SB 613, is the first-of-its-kind and aims to affordably cut “upstream” gas leakage associated with oil and gas consumed in California that is produced both in and outside the state.

Importantly, SB 613 is designed to avoid unintentional costs by providing flexible implementation to state agencies. SB 613 requires state agencies to ensure their strategies to reduce upstream methane leakage are “feasible and cost effective” and requires the California Air Resources Board (CARB) to encourage the procurement of verified low-leak natural gas only where doing so is “feasible, cost effective, and in the best interests of ratepayers.”

Methane, the main component in gas, is a highly traded commodity. Leaked methane gas from oil and gas production and transport represents a significant economic loss that is recoverable in cost-effective ways. Furthermore, when methane is emitted, it traps over 80-times more heat in the atmosphere than carbon dioxide over a 20-year period. Methane is already responsible for about 30 percent of global temperature increase, and its concentrations in the atmosphere are rising. This is driving increased energy demand that could result in increased energy costs.

California largely depends on gas (and oil) imports to generate its electricity, power data centers, and meet consumer demands. But oil and gas production has highly variable methane intensities, depending on its source and operations. Moreover, over one-half of the oil and gas industry’s emissions are due to wasted methane. While California has led the way on reducing methane leakage — including setting a target of cutting 40 percent of its methane emissions by 2030 compared to 2013 levels — state lawmakers are now intent on closing gaps. SB 613 represents a significant step toward reducing the methane waste associated with oil and gas consumed in California.

SB 613 codifies the intention of California’s legislature to reduce methane emissions, including emissions from imported petroleum and natural gas, where feasible and cost-effective. It requires the California Air Resources Board (CARB) to encourage the state’s own procurement of natural gas to shift toward lower-emissions gas and directs state agencies to prioritize reducing methane leakage, including the upstream methane waste associated with petroleum and natural gas.

SB 613 also enables the California Public Utilities Commission (CPUC) to apply approved MMRV (measurement, monitoring, reporting, and verification) protocols to cut upstream methane emissions. Strong MMRV is best practice for waste gas mitigation programs. This improves transparency and data quality around methane waste in California and beyond.

In recent years, California has committed to reducing in-state methane emissions, launched subnational coalitions, and partnered with Carbon Mapper to launch a methane-detecting satellite to increase visibility and action to stop super-emitting methane events. More work will be needed to implement the bill, but SB 613 represents an important step, in line with California’s methane reduction goals, toward reducing the methane leakage associated with the oil and gas it consumes.

SB613 was vetoed on October 3, 2025. A formal veto statement from the Governor’s office can be found here: https://www.gov.ca.gov/wp-content/uploads/2025/10/SB-613-Veto.pdf