The Environmental Protection Agency eliminated direct regulation of methane from oil and gas operations Thursday, teeing up a clash with big oil majors and environmentalists, both of which argue a lack of methane rules undermines the U.S. natural gas industry’s future.
The move is the Trump administration’s latest undoing of Obama-era climate regulations, and it comes as President Trump is seeking to draw a contrast between himself and presumptive Democratic nominee Joe Biden on energy policy, and on support for U.S. fossil fuel production in particular.
EPA Administrator Andrew Wheeler signed the rules in Pittsburgh, in the heart of the Marcellus Shale, one of the nation’s largest natural gas reserves.
The Trump administration rules “do away with one of the worst kinds of regulation we saw from the Obama-Biden administration” that has “little effect in the real world” but “came with real costs,” especially on small U.S. oil and gas operators, a senior EPA official told reporters.
While oil and gas industry trade groups welcomed the rules, individual oil majors that had urged the EPA to maintain the controls are objecting.
“BP believes methane should be directly regulated by the EPA and opposes today’s action by the Administration,” said David Lawler, chairman and president of BP America, in a statement. “The direct federal regulation of methane emissions is a critical step to protecting the environment and keeping the gas in our pipes in order to provide it to the market.”
The Trump administration’s rules remove requirements that oil and gas drillers monitor, detect, and repair leaks of methane, the main ingredient of natural gas and a powerful greenhouse gas. Instead, oil and gas operators will only be required to curb emissions of volatile organic compounds, or VOCs, an air pollutant that is a precursor to smog.
In addition, the EPA also adopted changes to the Obama-era monitoring requirements, reducing the frequency with which operators must survey their equipment for leaks. Those requirements would now apply to emissions of VOCs.
Industry trade groups such as the American Petroleum Institute argue the controls that capture VOC emissions also capture most of the methane emissions from oil and gas wells. They also point to growing voluntary efforts by oil and gas companies to reduce methane.
“Our industry continues to drive down methane emissions from operations while meeting America’s energy needs every day,” said Frank Macchiarola, API’s senior vice president of policy, economics, and regulatory affairs. “Under these modified rules, operators will still be required to control emissions, and the industry continues to make progress in reducing methane emissions through new technologies.”
Environmentalists, however, say VOCs aren’t a “perfect proxy” for methane, and they point to several recent scientific studies from the Environmental Defense Fund and others showing methane emissions in the Permian Basin and across the U.S. are orders of magnitude higher than previously estimated.
“Deregulating methane emissions is like kicking American natural gas in its Achilles heel, and the timing couldn’t be worse,” said Ben Ratner, a senior director at the Environmental Defense Fund+Business who works with energy companies on methane.
“The scientific record is crystal clear that the U.S. oil and gas sector is a very substantial source of methane emissions that are endangering the climate right now,” he added.
The Environmental Defense Fund has already promised a lawsuit over the Trump administration’s actions. The group estimates the new EPA rules would allow at least an additional 4.5 million metric tons of methane emissions each year, roughly equal to the annual emissions of around 100 coal-fired power plants.
Several big oil companies, including BP, Shell, ExxonMobil, and large independents like Pioneer Natural Resources, had called on the EPA to abandon its plans to eliminate methane curbs. Many of those companies asked the EPA to not just 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.
A senior EPA official, however, said multinational oil companies were just one of a set of stakeholders the agency heard from. Many others in the industry pointed out flaws with the Obama-era rules, including “burdensome reporting” and “complicated and convoluted requirements” that conflicted with state methane programs, the official said.
Smaller operators have said they can’t absorb the costs of methane regulations. The oil and gas sector is a “food chain industry,” and the regulatory burden would fall on the smallest producers, which tend to operate the lowest production wells, said Lee Fuller, executive vice president of the Independent Petroleum Association of America.
Fuller also said operations in most large oil and gas producing states — including the entire state of Pennsylvania, for example — would still be covered under VOC-only regulations, even if rules don’t directly curb methane.
The senior EPA official said the agency expects emissions from U.S. sources would continue to decrease, even without direct methane controls. The official noted the VOC controls capture methane emissions, as well as state-level programs.
“The notion that this is going to change that trajectory is inaccurate,” the official said.
