Trump administration to reverse methane rules for energy industry

By Daniel de Vries

2 September 2019

The Trump administration announced a plan Thursday to remove federal requirements for the oil and gas industry to control emissions of methane, the primary component of natural gas and a potent contributor to climate change. The move continues Trump’s reversal of climate policies enacted by the Obama administration, eliminating even the most minimal measures to address the unfolding climate catastrophe.

The proposal, which may be finalized as early as next year, aims to remove methane leakage limits for oil and natural gas drilling, processing, pipeline transportation and storage.

Releases of methane directly to the atmosphere already occur at an alarmingly high rate in the energy industry. According to a comprehensive study published in the journal Science last year, this leakage has roughly the same near-term impact on climate change as all the coal-fired power plants in the country.

On a global scale, methane is responsible for about 25 percent of the warming experienced today, second only to carbon dioxide. It has a shorter longevity in the atmosphere than carbon dioxide, but when evaluated over 20 years, is 86 times more potent pound for pound.

Controlling methane pollution is crucial to avoid the worst impacts of climate change, especially in the near term. Recent climate-related developments, from the fires raging in the Amazon to the hottest ever monthly temperatures recorded in July, underscore the urgency.

Trump’s Environmental Protection Agency (EPA) has proposed not only scrapping controls on methane leaks—perhaps the easiest and least costly of all measures—but also reinterpreting the Clean Air Act to limit the agency’s authority to regulate these emissions by transmission and storage facilities. The proposal argues that a lengthy administrative process to declare that emissions from these operations endanger public health and the environment is needed before any regulations can be issued—potentially slowing any future administration’s attempts to reinstate rules.

The rollback plan drew mixed reaction from the oil and gas industry, with major transnationals Shell, BP and ExxonMobil distancing themselves from it or coming out against EPA’s proposal. These companies have been promoting natural gas in the US and around the world as a “bridge fuel” to replace coal and reduce greenhouse gases in the near term, while at some unspecified point in the future, natural gas itself would be replaced by renewables.

Now, with the government of the world’s largest natural gas producer removing controls on methane leaks, this marketing scheme is seriously undermined.

The pending reversal of the methane leakage rule also sparked concern over the level of regulatory uncertainty, with legal challenges likely when the regulation is finalized. Even if the rollback is upheld in the courts, the rule may well be reopened by a future government facing demands for more aggressive controls. In the meantime, producers face a patchwork of differing state regulations.

The split within the industry over the rollback is not unique to the methane rule. The Trump administration’s plans to freeze fuel economy and greenhouse gas standards for cars are facing increasing opposition from a section of automakers, which calculate that it would be more profitable to continue predictable if plodding efficiency improvements than to gamble with uncertainty and produce additional versions of the same car to comply with differing state and federal standards. Three large automakers signed a deal with California regulators last month to ignore the impending EPA freeze and comply instead with reduced but still incrementally advancing efficiency standards.

Trump’s methane proposal does have a vocal base of support within the industry, with most of the smaller oil and gas drillers, as well as their industry associations, echoing EPA chief and former coal lobbyist Andrew Wheeler’s claims that the plan would eliminate “unnecessary and duplicative” regulatory burdens.

In their socially reckless scramble for every last dollar of profit, the administration and their backers in industry eye total savings across the sector of just $17 to $19 million each year. This compares to a combined reported profit of $28 billion last year for 43 US oil producers alone last year, according to the Energy Information Agency.

The financial savings of foregoing methane leakage controls may amount to small change, but it is a single component of a wide-ranging strategy to repeal regulatory safeguards on public health, safety and the environment. The New York Times has tallied dozens of rollbacks by the Trump administration in various stages of completion, 18 of which are aimed at eliminating constraints for drilling and extraction, plus another four seeking to gut air pollution requirements for oil and gas operations.

The environmental impact and health toll of these rollbacks are also accumulating. EPA’s analysis acknowledges emissions would increase as a result of eliminating the leakage rule by 370,000 tons of methane a year, along with 10,000 tons of smog-forming gases, many of which occur in areas with serious air quality problems associated with oil and gas drilling.

These figures are likely a gross underestimation. Studies over the past seven years point to methane leakage rates from the oil and gas industry approximately 60 percent higher than values used by the EPA.

In all, this represents approximately $2 billion worth of natural gas leaking into the atmosphere. The International Energy Agency suggests that approximately three quarters of this can be recovered, and two-thirds of it at a cost that more than pays for itself when accounting for the value of the natural gas. With the current advances in low-cost sensor technology and drones with leak detection capability to survey vast areas of operations, the technical impediments to limiting leaks are disappearing.

Leakage is not the only shocking inefficiency. Another staggering sum, more than a billion dollars worth of natural gas, is burned at the wellhead and elsewhere by industry before coming to market—often by oil producers who consider natural gas an unwanted byproduct. With natural gas prices low, often it is more cost effective to burn or release the methane rather than capture it and transport it for sale.

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