Natural Gas

ANGA's Durbin talks SOTU, impact of White House methane proposal on industry

Last week, the White House unveiled a blueprint to regulate methane emissions in the oil and gas sector, along with a goal of cutting methane 40-45 percent by 2025, back to 2012 levels. Did the administration successfully hit the sweet spot of adequate environmental protection while also addressing stakeholder concerns? During today's OnPoint, Marty Durbin, president and CEO of America's Natural Gas Alliance, reacts to the White House's methane proposal and talks about how he expects the president to address natural gas in his State of the Union speech.

Transcript

Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. With me today is Marty Durbin, president and CEO of America's Natural Gas Alliance. Marty, always nice to have you here on the show.

Marty Durbin: Thanks for having me.

Monica Trauzzi: Marty, the White House recently unveiled its plans to regulate methane emissions in the oil and gas sector, and they established a new goal of cutting emissions by 40 to 45 percent by 2025 back to 2012 levels. Did the administration successfully hit that sweet spot of addressing environmental concerns while also taking in mind stakeholder concerns?

Marty Durbin: Well, Monica, what I would say is first let's be clear. The natural gas industry is committed to further reducing methane emissions in our operations, and we're not opposed to continuing those efforts. Our big concern about the announcement today was that the administration chose to take a regulatory approach with a segment of the industry that's already demonstrated the ability to make dramatic decreases in methane emissions.

Monica Trauzzi: And like you said, the industry has made decreases in emissions, but is there a plan in place to get to that 40 to 45 percent reduction target that the president outlines? Can the industry just do that on its own?

Marty Durbin: Well looking at the proposal today, it's not clear exactly what the 40 to 45 percent figure covers, so it's unclear to say you know can we or can't we hit that particular number and how to do it. What we can say is that we've reduced our emissions by 17 percent since 1990 while increasing production by 37 percent, and there is no question that we're going to continue to see those kinds of dramatic decreases of methane emissions because it just makes sense for our industry. Not only is it innovation from our industry that's allowing those reductions to take place. Again, we're doing this under the existing regulatory structure, and again as everyone knows, we have the incentive to capture this methane; it's what we sell.

Monica Trauzzi: The blueprint they've introduced would regulate new and modified sources through Section 111(b) of the Clean Air Act. Can 40 to 45 percent reduction in emissions be met without also hitting those existing sources through the 111(d) section of the Clean Air Act?

Marty Durbin: Well that's the big unknown question. Again, right now we're the only segment of the industry that's going to be regulated, you know, under this plan. So whether that 40 to 45 percent just applies to us, we don't know, but again, we can start tomorrow; in fact we are already doing it. We can start today working cooperatively and collaboratively with the administration to continue those dramatic reductions in methane emissions in our operations. In some ways it feels like -- you know even the White House said in their announcement that these voluntary programs hold the potential for significant reductions in a timely and cost-effective manner. Well we couldn't agree more, and frankly I think we are the poster child for working with part of the industry that's committed to making those reductions that can continue tomorrow and not have to wait for a long regulatory process to begin implementing.

Monica Trauzzi: Well, and to be fair, they have taken sort of this two-tier approach, part voluntary and also part regulatory. Your industry has presented its comments and concerns to the White House directly. Do you see a reflection of those conversations in the announcement?

Marty Durbin: Well we're certainly hopeful that as this process moves forward that they will work closely with us and take into account the significant reduction we've already accomplished and make sure that whatever they put forward is going to be reasonable and timely. And the concern we have here is that you know we know -- we are making the reductions now; we can continue doing so. By throwing in the specter of a new regulation, now you know we've got to wonder, well, what are the requirements going to be? How long is it going to take for that to happen? You know recent history shows that new regulations can run into some problems. We're committed to the goal. We have the shared goal of reducing these methane emissions, and we'll continue to do that. We sure hope the administration is going to look at us as a partner in that all the way through the process.

Monica Trauzzi: So in terms of cost, EPA's white papers on methane show many of the practices that would be used to reduce emissions could be paid for without the need of large long-term investments. So then is cost an issue to industry?

Marty Durbin: Really right now in the -- we've already made significant reductions due to innovations from the industry. We know how to do this and we have the incentive to do it. So really the concern we're raising today isn't about cost necessarily; it's about is this the best way to do it. We believe that the industry working cooperatively with the administration can get to the shared goal of reduced methane emissions faster and in a more cost-effective way through a voluntary program on producers than to take a new Clean Air Act regulatory approach.

Monica Trauzzi: But you don't have sort of this overarching plan and a specific target for reducing emissions?

Marty Durbin: That's an easy piece to come up with and as far as being able to, you know, work with them. By the way, I would say while there isn't something formal on the table, the industry is ready to go that direction. We know what kind of reductions we've already made, and we know how we can continue to do that, and it wouldn't take much to have projections on where those emission reductions would take place. Let's face it, EPA has the data that we'll be able to show whether we're meeting those goals. I mean EPA's data shows that just from 2011 to 2013, natural gas wells alone that use hydraulic fracturing reduce their methane emissions by 73 percent; that's just an unmitigated success story that we ought to be working together to continue.

Monica Trauzzi: Is natural gas still viewed by this administration as a solution fuel? Do you think there's been a shift in rhetoric on natural gas since the start of the Obama administration to now, or has it been relatively consistent?

Marty Durbin: Well I think you know the president in his last several State of the Union addresses, certainly the administrative EPA I'll give them credit. They have fully recognized, you know, the value of natural gas not only to the economy but to our ability, you know, to help meet the climate goals that the administration has set up. We've not only reduced carbon emissions because of greater use of natural gas, we've reduced air pollution. You know all the hazardous air pollutants have been reduced: SOx, NOx, mercury, particulate matter. And I think they have recognized that. Again, that's why we thought it was disappointing and a missed opportunity to take this industry that's done so much both for the economy and the environment to work in a more cooperative way as they're proposing for many other segments of the industry.

Monica Trauzzi: So what are you looking for from the president in his State of the Union address on natural gas? How does he sort of bridge that divide between what the administration is looking to do versus what we see happening on the state and local level in many regions?

Marty Durbin: Well again, I certainly expect that the president in his State of the Union address will continue to recognize and acknowledge the real benefits that natural gas have brought to the economy and to our environment, and we clearly have a disagreement on how to move forward on this particular issue. But you know we know that as the economy grows, as the population grows, we are going to be relying on natural gas. It's abundant. It's affordable. It's clean burning. We want to see more of an empowered generation in manufacturing. We have enough now to be exporting it as well. So it's a very positive outlook you know for the country with regard to natural gas, and we will continue to work with the administration on that.

Monica Trauzzi: All right, we'll end it right there. Thank you for coming on the show.

Marty Durbin: Thank you. Happy to be here.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.

[End of Audio]

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