Industry wins big in methane rules rollback

Industry wins big in methane rules rollback
© iStock

The Trump administration is on track to erase former President Obama’s restrictions on methane emissions from oil and gas drilling.

This week, the Interior Department’s Bureau of Land Management (BLM) released a final rule that would weaken methane pollution rules for drillers on public lands. It follows an earlier proposal from the Environmental Protection Agency (EPA) that eased regulatory and monitoring rules for methane, with more actions coming.

It is one of the biggest victories yet for the oil and gas industry under President TrumpDonald John TrumpAustralia recognizes West Jerusalem as Israeli capital, won't move embassy Mulvaney will stay on as White House budget chief Trump touts ruling against ObamaCare: ‘Mitch and Nancy’ should pass new health-care law MORE. Drillers will save billions of dollars in compliance costs over the next decade, costs that the administration and industry say were unnecessary and provided little to no environmental benefit.

ADVERTISEMENT

“It’s important to rebalancing what was done,” said Dan Naatz, senior vice president of government relations at the Independent Petroleum Association of America, which represents small oil and gas drillers, about the Interior rollback.

“The 2016 rule really turned everything on its head and has had the federal government in charge in issues that weren’t really involved in federal lands.”

It’s also a major blow to Obama’s aggressive climate change agenda, which the Trump administration has been steadily dismantling, including through proposals to repeal the Clean Power Plan and carbon dioxide limits for cars.

The changes have environmentalists reeling. They say the methane rollbacks will exacerbate climate change, harm public health and cost taxpayers.

Methane is a greenhouse gas at least 25 times more potent than carbon dioxide, and its emissions are accompanied by volatile organic compounds.

Federal officials estimated that easing the rules would result in at least 2.16 million tons in additional methane emissions over 10 years. The bulk of that is from the Interior rule, which is forecast to allow 1.78 million tons of new emissions in a decade. The EPA’s rollback would let 380,000 tons out in the six-year period that the agency used in its analysis.

“The administration is putting the interests of the lowest performers in industry ahead of any concern for the public,” said Matt Watson, associate vice president for energy at the Environmental Defense Fund.

“It is an attempt at a wholesale takedown of these basic protections.”

Greens also note that on Interior land the gas is owned by taxpayers, so wasting it deprives them of payments.

The Obama rules were the result of a comprehensive, multi-agency effort launched in 2014 to slash methane emissions from oil and gas drilling, landfills, coal mining, agriculture and elsewhere.

It came as Obama was negotiating what became the Paris climate agreement, and the methane cuts were part of his pledge — since disowned by Trump — to reduce greenhouse gas emissions 26 percent to 28 percent by 2025.

But industry groups had been clamoring for rollbacks of the rules, and Trump administration officials began work quickly on dismantling the Obama-era restrictions.

One of the EPA’s first acts after Trump’s inauguration was to cancel a request it had put out to oil and gas companies seeking more information about their methane emissions.

It was an early step by the Obama administration toward potentially expanding their methane standards to all existing oil and gas wells, since the original rule only applied to newly drilled wells.

Trump, on the other hand, has worked to dismantle Obama’s climate policies and the methane strategy, most notably with a March 2017 memo instructing officials to undo climate rules and other policies that could be seen as hampering energy production or use.

The industry stands to benefit handsomely from the changes made and proposed in recent days.

The EPA says its rollback would result in up to $546 million in regulatory savings through 2025, though that would be offset by $62 million in wasted natural gas. The climate change costs were pegged at $54 million in the same time period.

The Interior rollback would have a bigger impact, because it is closer to a whole-scale repeal. That Obama rule would have applied to all wells on public land, not just newly drilled ones.

The BLM predicts as much as $2.08 billion in regulatory cost savings over 10 years and $1.09 billion in new costs due to climate change and the health effects of the volatile organic compounds.

While industry groups are cheering the actions, Democrats and green groups are not giving up with plans to take the fight to court.

California Attorney General Xavier BecerraXavier BecerraEPA to pursue final 'science transparency' rule in 2019 Luján will have 'assistant Speaker' title California AG Becerra included in Bloomberg 50 list MORE (D) and New Mexico Attorney General Hector Balderas (D) sued the Interior Department in California federal court hours after the rule was announced. They argue that officials didn’t adequately justify the rollback and that the new regulation doesn’t meet the government’s legal obligations.

“With this attempt to axe the Waste Prevention Rule, the Trump administration risks the air our children breathe and at taxpayers’ expense,” Becerra said in a statement.

“We’ve sued the administration before over the illegal delay and suspension of this rule and will continue doing everything in our power to hold them accountable for the sake of our people and planet.”

The EPA rule still needs to go through a 60-day public comment period before it can be finalized.

At that point, environmentalists and other Democratic states are likely to sue.

Despite the legal fight ahead, industry groups already see much to cheer.

“It’s been a good couple of weeks,” said Kathleen Sgamma, president of the Western Energy Alliance.

“This is about overreaching red tape,” she said of the rules. “The Obama administration was just using regulation to constrain the oil and gas industry.”