The Biden administration on Tuesday announced a proposal to regulate methane from oil and gas sources, touting the rules as having the potential to produce immediate emissions cuts and hoping the proposal will bolster U.S. clout at the ongoing U.N. climate conference.
Methane, the main component of natural gas, is less known than carbon, the biggest contributor to climate change. But emissions from methane are driving more than 25% of global warming, mostly caused purposely or accidentally by leaks during production and transportation of natural gas. Those methane leaks could offset the carbon reduction benefits of the switch in recent years from coal to natural gas and renewables for generating electricity in the United States.
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Combating methane emissions can have a more immediate effect than cutting carbon because methane is more than 80 times more potent than carbon over a 20-year period, although it degrades faster in the atmosphere compared to carbon, which lingers for 100 years.
Oil and gas companies are motivated to limit leaks of methane voluntarily because they can sell the gas they save for profit, but regulations would ensure uniform compliance, proponents say.
The new rules from the Environmental Protection Agency, importantly, will apply for the first time to oil and gas infrastructure built before 2015 — the vast majority of well sites in existence today — in addition to updating rules for new sources imposed by the Obama administration. The EPA proposes to create a monitoring program requiring companies to find and fix leaks.
Also for the first time, the EPA will regulate associated natural gas, a byproduct of oil production that is frequently vented or flared.
The EPA says it will set standards to eliminate venting of associated gas and require the capture and sale of gas at new and existing oil wells when there is sufficient pipeline or other infrastructure to transport the gas for use. The agency plans to issue a final rule before the end of 2022.
Once they are finalized, the rules will add heft to a Global Methane Pledge the U.S. recently launched with the EU to reduce methane emissions 30% economywide by 2030. Nearly 90 countries have since joined the pledge, the White House announced at the U.N. climate conference in Glasgow, Scotland, that started Monday and lasts through next week.
“As global leaders convene at this pivotal moment in Glasgow for COP26, it is now abundantly clear that America is back and leading by example in confronting the climate crisis with bold ambition,” said EPA Administrator Michael Regan.
The methane rules are one of the few things President Joe Biden can count on to assure other countries that the U.S. can fulfill his pledge to the U.N. as part of the Paris agreement to cut U.S. emissions in half by 2030. His legislative agenda, which promises a record $555 billion in funding for clean energy initiatives, remains pending in Congress.
The EPA said the proposed rule would reduce 41 million tons of methane emissions from 2023 to 2035, more than the amount of carbon dioxide emitted from all U.S. passenger cars and commercial aircraft in 2019.
EPA regulations on methane have a level of buy-in from the oil and gas industry, protecting them from pendulum swings between administrations and court losses. They also have some bipartisan support, as the House and Senate voted in the spring, with some Republican votes, to cancel a Trump administration action that would have blocked the EPA from controlling methane emitted by the oil and gas industry, clearing the way for Biden to set stricter controls.
The American Petroleum Institute, the largest U.S. oil and gas lobby, and the Chamber of Commerce flipped positions earlier this year, endorsing the concept of the EPA imposing direct regulation of methane from new and existing oil and gas sources after supporting the Trump administration’s elimination of such rules.
But the devil is in the details on whether the industry will support the methane rules announced Tuesday.
Natural gas companies are facing growing pressure from investors and customers to demonstrate their fuel is cleaner than competitors as the industry looks to overcome doubt from environmentalists.
In the U.S., the oil and natural gas industry is the largest industrial source of methane emissions, contributing 30%, followed by landfills and animal agriculture.
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Environmental groups and analysts say methane leaks can be easily managed by the oil and gas industry at low cost.
The International Energy Agency released a report last month noting that global methane emissions can be cut 70% with existing technology and that a 45% reduction can be achieved at no net cost to companies.
The EPA said the proposed rule would have minimal impact on natural gas and oil prices — pennies per barrel of oil or thousand cubic feet of gas.
