The U.S. energy renaissance continues to pay off for American families and businesses. From lower fuel and utility costs to decreased costs for manufacturers – whose electricity costs are 30-50 percent lower than those of foreign competitors – the benefits of increased oil and natural gas production have been wide-ranging.
Less publicized is our success in reducing greenhouse gas emissions. The United States leads the world in reduction of carbon emissions, which have reached 25-year lows in the power sector due to greater use of clean-burning natural gas. Methane emissions associated with natural gas development have also declined 18.6 percent from 1990 – 2015 at the same time as natural gas production increased by over 45 percent.
Technological innovation and industry leadership, combined with effective state and federal regulations, are making the difference. That makes the Bureau of Land Management’s (BLM) new Methane and Waste Prevention rule not only redundant but actually counterproductive. BLM’s new policy, also called the venting and flaring rule, is just the kind of regulation the Congressional Review Act was designed to correct.
From a technical perspective alone, the rule is misguided. BLM lacks the statutory authority and expertise to regulate air quality. That authority rests with EPA and the states under the Clean Air Act, and the data make it clear the existing system is effective.
But it’s the practical impact that demands action from Congress.
Implementing the BLM’s rule – on top of current regulations -- could impede U.S. energy production, potentially reducing the availability of affordable domestic energy to the American consumer, decreasing revenues to the federal government and hindering production of natural gas – the key factor in cutting U.S. power generation carbon emissions.
The added cost of compliance could make as many as 40 percent of federal wells that flare uneconomical to produce, leading to their permanent shut-in, according to analysis from Environmental Resources Management. Based on 2016 royalties reported by the Office of Natural Resources Revenue, even a 1 percent loss of royalties would result in lost federal revenues of over $14 million – far more than the $3-10 million in additional incremental royalties estimated by the Bureau of Land Management.
Natural gas production on federal land has already declined 18 percent from 2010 to 2015 – compared to a 55 percent increase on non-federal land. Adding another duplicative layer to federal regulation could stifle production ever further – with direct impacts on state and local revenues.
All this risk to the economy, U.S. energy security and environmental progress would regulate emissions that are already highly regulated and already declining. It is bad public policy to add significant costs and reduces local revenues, without corresponding environmental or consumer benefits. BLM’s redundant methane rule is tailor-made for repeal under the Congressional Review Act. The House has acted. Now it’s up to the Senate.
Erik Milito is director of Upstream and Industry Operations at API.
The views expressed by this author are their own and are not the views of The Hill.