The American Petroleum Institute said Thursday that it supports the direct federal regulation of methane, a potent greenhouse gas, from new and existing oil and gas operations.
The position is a shift and concession by the largest oil and gas trade group, which is trying to position itself as willing to cooperate with certain aspects of President Biden’s aggressive agenda to combat climate change while opposing other efforts to limit fossil fuel production.
Methane, the main component of natural gas, is a greenhouse gas more potent but shorter-lived in the atmosphere than carbon.
“This is a new position for API, but we think given where the industry is at this time and the continued importance of reducing methane, it was critical we update this position as the administration changes,” API CEO Mike Sommers told the Washington Examiner in an interview. “We look forward to working with the Biden administration in the right way to regulate methane, and we welcome the opportunity to be in the room as they make this new regulatory regime a priority.”
API previously backed the Trump administration’s elimination of direct regulation of methane, arguing that existing regulations that indirectly capture methane, along with state rules and voluntary actions by companies, are sufficient. That position drew the ire of big oil majors, some of API’s own members, who argued a lack of methane rules undermines the U.S. natural gas industry’s future as it seeks to play a role in the transition to cleaner energy.
Several big oil companies, including BP, Shell, and ExxonMobil, and large independents like Pioneer Natural Resources, called on the Trump era Environmental Protection Agency to abandon its plans to eliminate methane curbs. Many of those companies asked the EPA not just to maintain the Obama-era methane limits for oil and gas wells built or modified after 2016 but to extend those regulations to all existing operations.
API had especially opposed regulating existing sources because it would trigger controls for a much larger number of oil and gas operations and be more expensive for smaller producers.
Now, API is changing course and putting itself on the same plane as the Biden administration, which is expected to pursue methane regulations of both new and existing sources.
Sommers suggested its previous position is untenable, as the public and investors have demanded stronger action from oil and gas producers while other countries in Europe move in the same direction, putting the U.S. at a competitive disadvantage.
Just last week, Total, a French oil and gas giant, announced it is leaving API over the U.S. oil lobby group’s lack of support for policies to combat climate change, including on methane. BP and Shell are also reviewing their membership in trade associations to see if their goals align, but they have not made a conclusion on API.
“API membership remains strong and continues to include bigger European oil companies that believe we are aligned with them on methane,” Sommers said.
Environmentalists, however, question the credibility of API’s new methane commitment given its previous position.
API sued the Obama administration over its rule, which would have required oil and gas companies to check for leaks twice a year.
API argued the Obama administration violated the Clean Air Act by failing to determine whether methane contributes significantly to air pollution that causes climate change.
Ben Ratner, senior director with the Environmental Defense Fund+Business, said the answer to that question is obvious and said using that position as grounds to oppose a Biden administration rule would be a cop out.
“It couldn’t be clearer that methane emissions from the U.S. oil and gas industry significantly contribute to climate harms,” Ratner told the Washington Examiner. “The question now is not whether methane significantly contributes to climate warming, it’s how best to regulate ambitiously and swiftly to make those emissions a thing of the past.”
Sommers made clear API would condition its support for methane regulations pursued by the Biden administration based on whether it “follows the law.”
“In working with the new administration, we want to develop a regulatory regime that is sensible, workable, and promotes further technological advances and innovation,” Sommers said. “If this is going to be durable, it’s important the Biden administration follow the law. I am confident we can find common ground.”
