Energy & Environment

Major oil companies oppose EPA methane rollback

Many major oil companies don't support the Trump administration's latest rollback of standards that reduce greenhouse gas emissions. 

The Environmental Protection Agency (EPA) on Thursday finalized rules that, among other things, rescind standards that specifically regulate methane emissions from new sources in the oil and gas industry.  

The agency argued that the standards it rescinded were redundant, overlapping regulations regarding volatile organic compounds (VOCs). This differed from an Obama administration finding that while VOC standards "incidentally" reduce methane emissions, a methane-specific standard would cause "meaningful" greenhouse gas emissions reductions. 

Companies including Shell, BP and ExxonMobil have expressed opposition to the changes or support for direct methane regulations.  

Methane, the primary component of natural gas, is 25 times more impactful than carbon dioxide in equal quantities, according to the EPA.

The greenhouse gas is leaked into the atmosphere during the production, transportation and storage of oil and gas. Natural gas and petroleum systems are the second-largest source of methane emissions in the country, behind agriculture.

The EPA estimated that the two final rules would, over a 10-year period, increase methane emissions by 400,000 and 450,000 tons, respectively. However, the agency said that despite emissions the net benefit of the rollback would be worth between $750 million and $850 million dollars. 

Shell U.S. President Gretchen Watkins in a statement called the newly finalized regulations "frustrating and disappointing. "

"Shell has consistently urged the Trump Administration to directly regulate methane emissions from existing onshore oil and gas assets. The negative impacts of leaks and fugitive emissions have been widely acknowledged for years, so it's frustrating and disappointing to see the Administration go in a different direction," Watkins said. 

"We will continue to advocate for sound policies and participate in the development of technologies that allow us to further reduce our emissions," she added. 

BP America chairman and President David Lawler similarly said in a statement Thursday that he "respectfully disagrees with today's decision by the administration."

"Direct federal regulation of methane emissions is essential to preventing leaks throughout the industry and protecting the environment," Lawler said. "We strongly believe that the best way to tackle this problem is through direct federal regulation, ensuring that everyone in the industry is doing everything they can to eliminate methane leaks."

While it didn't have a new statement this week, Exxon has also previously advocated for direct regulation of methane emissions from both new and existing sources. 

Environmentalists have also strongly criticized the rollback, saying it will worsen climate change. 

The administration, meanwhile, has argued that smaller producers would have the most to gain from the rule changes, which also exempts small wells from monitoring what's known as "fugitive emissions," or emissions that accidentally leak out during the process. 

"Regulatory burdens put into place by the Obama-Biden Administration fell heavily on small and medium-sized energy businesses," EPA Administrator Andrew Wheeler said in a statement. "Today's regulatory changes remove redundant paperwork, align with the Clean Air Act, and allow companies the flexibility to satisfy leak-control requirements by complying with equivalent state rules."

Small oil producers have been supportive of the changes, arguing that they will allow the companies to easily produce oil at small profit margins. 

Independent Petroleum Association of America Executive Vice President Lee Fuller told The Hill that smaller wells, which are usually operated by smaller companies, are less able to afford the cost of complying with fugitive emissions monitoring. 

"Low production wells have been subjected to very costly technology," Fuller said. 

He added that it's easier for larger companies to oppose the changes because they can pay the cost of compliance. 

"Many of them have already retrofitted their existing sources because they're large. They can afford to go out and make the changes," he said. 

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