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EPA methane emissions rules are a solution in search of a problem 

EPA methane emissions rules are a solution in search of a problem 
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Once again, methane is in the news. On July 14, articles in two scientific journals reported that global methane emissions reached a record high in 2017. According to the studies, called the Global Methane Budget, emissions were up 9 percent from the early 2000s, and human activity was responsible for most of the increase. In North America, claim the authors, about 80 percent of methane increases were driven by fossil fuels — in particular, the ramp-up of production in America’s shale plays.

Against this backdrop, the Trump administration is pressing for a revision of Obama-era environmental regulations, including oversight of methane emissions. Specifically, the Environmental Protection Agency (EPA) is pushing a final methane rule that would remove the oil and gas industry’s transmission and storage segments from regulation, and rescind emission limits on the industry’s processing and production segments. The EPA argues that current regulations to capture fugitive organic compounds (VOCs) already mitigate some methane emissions, making it redundant to regulate methane leaks. The agency notes that all states with oil and gas production have their own standards for limiting methane releases.

Without question, methane is a potent greenhouse gas, with up to 20 times the heat-trapping characteristics of carbon dioxide. So is the Trump administration pursuing policy changes that counter the latest received scientific wisdom? 

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There are two major problems with the just-released Global Methane Budget. First, its focus is worldwide and not U.S.-specific. Indeed, it finds that emissions have increased most markedly in Africa, the Middle East, China and South Asia. Second, the report’s time frame, 2000-2017, omits the significant advances in controlling methane releases that have occurred in the U.S. and Europe over the past decade. 

For example, even with a doubling of oil and gas production in the U.S., methane releases in the energy sector are virtually unchanged from 10 years ago. Fugitive methane from natural gas systems is 14 percent lower today than in 1990, and total greenhouse gas emissions actually fell in 2019, thanks to the substitution of natural gas for coal in power generation. What is more, a 2016 study by the National Oceanic and Atmospheric Administration (NOAA) found that the U.S. energy industry contributes little to the overall burden of global methane emissions. Rather, according to NOAA, wetlands and agriculture are the main culprits.

Adoption of the final methane rule would clearly help the beleaguered oil and gas industry by removing potentially costly and duplicative compliance costs, but it will not change the trajectory of lower emissions because of ongoing industry initiatives to address climate change.  For example, Southwestern Energy, the nation’s third-largest natural gas producer, is leading an industry group aiming to reduce methane leakage to less than 1 percent. To this end, Southwestern has upgraded pumps and compressors, deployed new tanks to capture methane vented by hydraulic fracturing, and replaced leaky gas-powered control equipment with solar panels and fuel cells. 

Earlier this month, a dozen of the world’s largest energy companies agreed to significantly lower their emissions from oil and gas production. The Oil and Gas Climate Initiative (OGCI), a consortium that includes BP, Chevron, ExxonMobil, and Occidental Petroleum, has pledged to invest more than $7 billion each year in low-carbon solutions such as reduced flaring, electrifying operations with renewable energy, and deploying carbon capture technologies.  The group’s carbon intensity targets cover both carbon dioxide and methane emissions. Two years ago, OGCI agreed to reduce their collective methane emissions rate by 350,000 tons per year by 2025, a goal that was achieved in 2018 and 2019.

At the same time, the American Petroleum Institute (API) has created The Environmental Partnership that currently includes 83 of its members who have agreed to find and fix methane leaks that could reduce emissions by up to 60 percent. Participating companies conducted more than 184,000 inspections last year and reported a “leak occurrence rate” of less than 1 percent. 

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Private-sector initiatives, such as the OGCI and The Environmental Partnership, offer the best hope for lowering greenhouse gas emissions. Because methane, the principal component of natural gas, has economic value when captured and used for power generation, home heating  and petrochemical production, the energy industry has a strong incentive to reduce fugitive emissions.

Energy policies and regulations should not be driven by environmental alarmists. Tougher federal methane rules would simply be a solution in search of a problem. 

Bernard L. Weinstein is associate director of the Maguire Energy Institute and adjunct professor of business economics in the Cox School of Business at Southern Methodist University.