Congress should make oil and gas companies pay for wasted resources
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In his inaugural speech, President Trump vowed to pry the nation’s wealth and power away from Washington politicians and restore them to the American people. But this week the Senate is poised to vote on a bill – quietly passed by the House on Feb. 3 – to rob those same taxpayers of hundreds of millions of dollars in royalties owed by energy companies drilling for oil and gas on land that belongs to the public.

The measure would roll back common-sense rules requiring oil and gas companies to reduce the 109 billion cubic feet of natural gas they currently squander each year through widespread leaks, intentional venting or simply burning it off (known as flaring). That’s enough gas to supply every home in Chicago.

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Private companies extracting resources from public or tribal land are supposed to pay royalties on what they produce, just as they do to private landholders. But they don’t pay for gas that they waste. Since 2013 alone, companies operating on those lands have wasted $1.5 billion worth of gas.

 

The revolution in U.S. oil and gas production has delivered unequivocal benefits: Lower energy costs, new jobs, and a boost to the manufacturing sector. And as low-cost gas displaces coal to make electricity, it sends less mercury, less particulate pollution, and half the carbon dioxide into the atmosphere. But wasteful leaks undercut that environmental gain, because unburned methane – the primary ingredient in natural gas – is also an extremely potent greenhouse gas, with over 80 times the warming power of carbon dioxide over a 20-year timeframe.

The policy now under assault also delivers immediate benefits for neighbors of oil and gas, especially rural communities suffering unhealthy, urban levels of air pollution.  The same leaks release toxic chemicals like benzene, toluene, and xylene, along with smog-producing volatile organic compounds. (Heavy-drilling Pinedale, Wyoming, pop. 2,000, has coped with smog rivaling that of Los Angeles.) The technologies that reduce natural gas waste also reduce local pollution.

Across the supply chain, companies are releasing almost 10 million metric tons a year. That’s $2 billion worth of gas. Fixing the problem is straightforward and low-cost. Some states already require it. In Colorado, the state‘s largest oil and gas producers worked with Environmental Defense Fund to design an effective policy that was fair to everybody. That rule keeps over 100,000 tons of methane and 90,000 tons of volatile organic compounds out of the air each year. And leading companies have proven it can be done at minimal expense. The intent of the rule is to turn the industry’s best practice into standard practice.

Natural gas companies spend a great deal of money positioning themselves as a cleaner energy alternative. Yet they still face public pushback in red states as well as blue (even Secretary of State Rex Tillerson once objected to a facility near his home in Bartonville, Texas). Reducing wasteful methane losses would help the industry live up to the reputation it tries hard to project.

For 25 years, the trend in environmental oversight has been away from centralized command-and-control and toward letting states and businesses find the cheapest, least intrusive answers. That’s exactly why the federal natural gas waste rule includes a flexible pathway – borrowed from the state rule in Colorado – expressly rewarding innovative compliance technology.

Yet it is on the chopping block this week, thanks to a bill that represents the worst kind of policymaking. The bill uses an obscure legislative tool called the Congressional Review Act, which not only kills the reform but bars the bureau from revisiting it in the future – so taxpayers could be left to watch this precious natural resource wasted in perpetuity.

Swinging a wrecking ball in the name of deregulation can do collateral damage to things we all hold dear. Now is the time for business leaders to let the president and Congress know that health protections matter to them, too. 

As he looked out over the Mall six weeks ago, President Trump described “a crucial conviction: that a nation exists to serve its citizens.” He gets no argument from us on that point. So let’s tell the Senate not to blow up a great deal for the American public. 

Fred Krupp is president of Environmental Defense Fund.


The views expressed by contributors are their own and are not the views of The Hill.