EPA

Trump's methane rule rollback fractures oil industry

The Trump administration yesterday revoked Obama-era regulations targeting methane emissions from the oil and gas industry, a long-awaited move that exposed rifts among oil producers decimated by the COVID-19 pandemic.

EPA Administrator Andrew Wheeler announced the rollbacks at an event in Pittsburgh, putting forward two final rules that remove direct federal methane restrictions for the industry and loosen monitoring and repair regulations aimed at preventing leaks of the potent greenhouse gas.

"Regulatory burdens put into place by the Obama-Biden Administration fell heavily on small and medium-sized energy businesses," Wheeler said in a statement yesterday. "Today's regulatory changes remove redundant paperwork, align with the Clean Air Act, and allow companies the flexibility to satisfy leak-control requirements by complying with equivalent state rules."

Oil and gas companies have had divergent views on the rollbacks, with smaller producers pushing EPA for changes and several larger companies backing the Obama-era regulations (Greenwire, Aug. 12, 2019). After EPA first proposed rolling back the rules last year, Exxon Mobil Corp. Senior Vice President Staale Gjervik spoke in favor of direct regulations, writing that "full industry participation" in reducing methane emissions "is required to maximize the benefits to society."

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Susan Dio, former chairman and president of BP America, said in an op-ed last September that methane emissions must be regulated, saying "we need to protect natural gas' license to operate."

And yesterday, Bjørn Otto Sverdrup, senior vice president for corporate sustainability at Norwegian energy company Equinor ASA, said on Twitter that the company does not support "the rollback of federal methane regulations in the US just announced."

"Reducing emissions remains an important part of @Equinor's approach to provide low carbon energy. We pledge to continue our work to lower our methane emissions," he said.

Mindy Lubber, president and CEO of investment group Ceres, said a host of large operators favor keeping regulators in place and that the rollback "only benefits producers who do not have strong operational controls."

Advocates for smaller oil producers have pushed back, saying that Obama-era regulations subject them to costly emissions programs that should only apply to bigger wells.

Lee Fuller, executive vice president of government relations at the Independent Petroleum Association of America, told E&E News Wednesday that smaller companies can't absorb the same methane monitoring-related costs as the majors.

Fuller said more data is needed to understand the emissions profile of low-production wells and to determine whether "there's much of a fugitive emissions source anyway." He said existing rules don't account for those potential differences and pointed out that a Department of Energy study to examine the issue has been disrupted by the pandemic.

He said EPA would continue to regulate volatile organic compounds (VOCs) and that "in [the production] industry, VOCs and methane are emitted together, so the same controls capture both."

Indeed, one of EPA's rules yesterday repeals methane emissions requirements for the oil and gas production and processing segments, asserting that controls for VOCs also curb methane releases.

On a conference call yesterday before Wheeler's announcement, senior EPA officials said concerns from multinational corporations over the rule are one voice of many and noted that some large companies had expressed concerns over "burdensome reporting," "convoluted" reporting requirements and other criticisms.

One of the agency's rules exempts operators of low-production wells from spending "significant funds" to monitor leaks and halves the required number of checkups at gas compressor stations to two times a year.

The other rule removes the natural gas transmission and storage sectors from federal methane regulations altogether, among other changes.

Deputy Energy Secretary Mark Menezes — who was also in Pittsburgh for the announcement — said the replacement rules offer relief to U.S. energy companies "by reducing the massive cost of complying with unnecessary overregulation from the federal government."

'Fundamentally flawed'

The replacement of the Obama-era safeguards was quickly panned by environmentalists and Democratic lawmakers, who broadly said the two new rules put the needs of oil and gas companies ahead of Americans' health while making it harder for the United States to address climate change.

Although methane stays in the atmosphere for a shorter period of time than carbon dioxide, it's more efficient at trapping heat. EPA estimates that methane's global warming potential is 25 times greater than that of CO2 over a 100-year period. Natural gas and "petroleum systems" are the second-biggest source of U.S. methane emissions, the agency says.

Gas flaring nationwide rose 23% last year, although it dropped 10% during the first quarter of 2020, according to a World Bank report last month (Energywire, July 22).

Environmentalists have long warned against dialing back methane regulations. The Environmental Defense Fund said yesterday that the group plans to sue the Trump administration over the rules, saying EPA "has no scientific or public health basis for taking this action."

"The Trump administration's attempt to eliminate these sensible methane standards is fundamentally flawed," said EDF President Fred Krupp in a statement. "Like so many other administration rollbacks that have already been rejected by the courts, this one ignores the science, the public health impacts and the low-cost solutions we have at hand."

EPA's replacement rules came out on the same day as a poll of voters in 11 states, conducted for the Natural Resources Defense Council, that said 75% of Americans favor stronger EPA limits on methane.

"This dangerous rollback is especially misguided because Americans, including Republicans by a 2-1 margin, are fully on board with keeping strong limits on methane," said David Doniger, senior strategic director of climate and clean energy at NRDC.

Some Democratic politicians also condemned the rollbacks, with Rep. Kathy Castor (D-Fla.) calling Trump "incapable of caring or acting to protect Americans from air pollution."

"By eliminating requirements for oil and gas producers to detect and fix methane leaks, President Trump is taking the same oblivious and deadly approach he has taken throughout the coronavirus pandemic: ignoring experts, endangering families, and hoping the problem will simply solve itself," Castor, who chairs the House Select Committee on the Climate Crisis, said in a statement yesterday.

Sen. Joe Manchin (D-W.Va.) said the EPA rollback "makes no sense" and that "there is no excuse to roll these regulations back when industry has the technology" to prevent methane leaks.

Still, Sen. Kevin Cramer (R-N.D.) welcomed the new rules and said the Obama-era regulations were "weaponized" to go after the U.S. oil and gas sector.

"Rescinding these unnecessary and politically-motivated regulations better align EPA rules with the Clean Air Act and will save critical resources for our smaller producers of reliable energy, which already have every incentive to reduce methane emissions," Cramer said in a statement.

Twitter: @cjanchondoEmail: canchondo@eenews.net

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