With several states taking steps to address methane emissions from oil and natural gas systems, is a federal policy on methane needed? During today's OnPoint, Mark Brownstein, associate vice president and chief counsel of the U.S. Energy and Climate Program at the Environmental Defense Fund, explains why he believes U.S. EPA should move to regulate methane emissions under the Clean Air Act, despite a reported drop in emissions between 2012 and 2013.
Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. With me today is Mark Brownstein, associate vice president and chief counsel of the U.S. Energy and Climate Program at Environmental Defense Fund. Mark, thanks for coming on the show.
Mark Brownstein: Pleasure to be here, Monica. Thank you.
Monica Trauzzi: Mark, a critical issue this fall in energy circles is the regulation of methane emissions for oil and natural gas systems. EDF is trying to build a case for EPA to regulate methane under the Clean Air Act or some other vehicle in order to effectively and efficiently tap into the U.S.'s natural gas reserves. The agency has indicated they'll make some type of decision this fall. Safe to assume that that will come after the midterm elections?
Mark Brownstein: Well, they have until December 22nd. I guess that's when fall turns to winter, so we'll see exactly when they release something. Better they should take their time and do something substantive than rush it along.
Monica Trauzzi: The natural gas industry, through its own efforts, has already significantly reduced methane emissions between 2012 and 2013. Why aren't their methods of reporting and emissions reduction sufficient?
Mark Brownstein: Well, actually, Monica, if you take a look at the data that EPA released, yes, we have seen some reductions in certain discrete areas of production, but what we're talking about here is reducing methane emissions across the entire natural gas value chain, from the wells, the gathering and processing infrastructure, transmission, even the pipelines that run underneath city streets. And in order to be able to get at the full range of opportunity, you really need to have broad-based regulation that focuses on all aspects of oil and gas production, not just one narrow set of activities.
Monica Trauzzi: Much of this is a question about improving technology. So wouldn't it be effective, then, to support the industry in getting to a point where the technologies have advanced enough to decrease emissions?
Mark Brownstein: Well, look, there's no question that you have leaders in industry that have helped pioneer certain technologies, but we're at a point now where we know, as a practical matter, that there are technologies out there that can substantially reduce emissions. ICF International did a report that suggested that we could get a 40 percent reduction in methane emissions across the oil and gas value chain for less than a penny per 1,000 cubic feet of gas produced. So a huge amount of reduction for very little cost, and using technologies that are widely available today. This is not rocket science, but it does take a certain amount of regulation in order to make sure that everybody is engaged in making those reductions, not just the few who are leaders in the industry.
Monica Trauzzi: So states are beginning to act. In Colorado, steps have been taken to regulate methane. Methane emissions also came up during the Pennsylvania governor's debate. So if states are beginning to act, why isn't that enough? Why does the federal government need to step in?
Mark Brownstein: Well, we have seen great regulation in Colorado. You mentioned that this is now a political issue in Pennsylvania. California recently enacted legislation that looks at this issue, so you know, we often see the states move first, but what we're talking about here is a problem that's nationwide, and while you will always have some states lead, in order to ensure that we're tackling the problem nationally, we need to make sure that there are some basic national requirements in place so that all companies are operating on a level playing field.
Monica Trauzzi: And so do you think the agency would give states flexibility as they have tried to do in their existing power plant standards?
Mark Brownstein: Well, so first of all, we should say that, under the Clean Air Act, which is the authority the EPA has to regulate methane emissions, right, it's always going to be a collaboration between the feds and the states. That's the way the Clean Air Act is designed. But it's also fair to say that what we're trying to do here with methane emissions is a lot simpler than what EPA is currently trying to do with power plants, and so we feel that if EPA takes steps to regulate, they'll find that the states are ready to work with them and that this can be done relatively quickly, relatively simply and very cost-effectively.
Monica Trauzzi: FERC, the Federal Energy Regulatory Commission, is receiving pressure to consider greenhouse gas emissions during its reviews of natural gas projects. What is that balance between adequate environmental considerations and ensuring a timely, cost-effective process for industry?
Mark Brownstein: Well, you know, the FERC process very much focuses on new infrastructure, what do we have to do there. Ninety percent of the emission reduction opportunity that we have in front of us is about existing infrastructure. It's about the vast amount of oil and gas infrastructure that currently exists in the United States. So while FERC has a role to play in helping to make sure that new infrastructure is designed to be as efficient and effective as possible, really we're talking about the need for federal regulation to get at this existing infrastructure. That falls squarely within EPA's bailiwick.
Monica Trauzzi: More regulations could certainly mean an increased cost for industry to do business on a day-to-day basis. Does the suggestion of these regulations make natural gas less cost-competitive?
Mark Brownstein: No. As a matter of fact, what we learned from the ICF work is that 40 percent of the reduction opportunities that are out there actually have a net payback, they're profitable. And so there's plenty of reason to think that if we take action to regulate, that actually we're doing something that's going to be good for the environment, but also good for the economy.
Monica Trauzzi: All right. Very interesting. We'll end it there. Thank you for coming on the show.
Mark Brownstein: Thank you.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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