Trump Reboots Obama Climate Rules by Axing Methane Curbs (1)

The Trump administration’s withdrawal of curbs on methane emissions from oil wells and related equipment threatens to disadvantage U.S. energy producers touting natural gas as a green alternative to coal.

The final rules, unveiled Thursday by Environmental Protection Agency Administrator Andrew Wheeler in Pittsburgh, may provoke a backlash in Europe, where regulators are developing a methane strategy and eyeing tougher scrutiny of the carbon footprint of energy imports.

“For EPA to eliminate methane regulation makes a commercially risky situation even worse for U.S. producers and exporters,” said Ben Ratner, a senior director with the Environmental Defense Fund. “With the EU primed to tighten the screws on leaky gas, the Trump EPA’s methane rollbacks aren’t just bad climate policy, they’re bad geopolitics and a competitive disadvantage for U.S. gas.”

The final measures end methane-specific limits at new oil and gas wells while removing additional curbs on leaks of smog-causing volatile organic compounds from gas transmission and storage equipment. The initiative also effectively preempts a legal requirement for the government to restrict emissions of both types of pollution from nearly a million existing wells -- a scenario oil producers warned could force them to stop operating some old sites.

‘Promises Kept’

“This is especially important to smaller energy operators who are the backbone of the energy industry in this country,” Wheeler said. “These rules are promises kept by the Trump administration and President Trump himself to the energy industry, Pennsylvania and the country.”

Environmentalists who’ve vowed to challenge the rules in court said the administration was making a dangerous move to unleash a powerful greenhouse gas despite a narrow window of time to avert the most catastrophic consequences of climate change.

“The Trump EPA is giving the oil and gas industry a green light to keep leaking enormous amounts of climate pollution into the air,” said David Doniger, senior strategic director of climate and clean energy at the Natural Resources Defense Council. “We cannot protect the health of our children and grandchildren, especially in the most polluted and endangered communities, if EPA lets this industry off scot-free.”

Methane, the chief component of natural gas, is a valuable energy source and commodity in its own right. Yet it’s also a powerful heat-trapping pollutant that can exacerbate climate change when it escapes from oil wells or gas pipelines. It represents about a 10th of U.S. greenhouse gas emissions, and is estimated to be 84 times more powerful than carbon dioxide at warming the atmosphere over a 20-year period.

Volatile Compounds

The EPA is largely retaining regulations aimed at curtailing releases of volatile organic compounds from new and modified oil and gas wells, though the agency is exempting low-production wells from some leak-monitoring requirements. The agency and some industry advocates say that those curbs effectively capture methane too, rendering specific requirements on the greenhouse gas unnecessary.

Senior EPA officials faulted the Obama administration for setting requirements on oil and gas production and processing before formally concluding that methane from that portion of the industry “significantly contributes” to air pollution -- a regulatory threshold under the Clean Air Act. EPA said it intends to begin writing a new regulation identifying criteria for evaluating the significance of pollutants, an effort that could make it harder to impose some pollution curbs.

The agency estimated the final rule will save between $750 million and $850 million between 2020 and 2030.

“EPA’s commitment to following the Clean Air Act protects health and the environment, effectively regulates emissions from our industry, and allows for the responsible production of oil and gas,” said Anne Bradbury, chief executive of the American Exploration and Production Council.

Industry Fractured

The oil industry is fractured over the Trump administration maneuver, which was opposed by large, integrated energy companies such as Royal Dutch Shell Plc and BP Plc that have highlighted sustainability goals and voluntarily adopted methane-reduction targets.

Natural gas has less than half the carbon dioxide emissions of coal when used to generate electricity, BP argued in an opinion piece last year. “But to maximize the climate benefits of gas -- and meet the dual challenge of producing more energy with fewer emissions -- we need to address its Achilles’ heel and eliminate methane emissions.”

BP America Chairman David Lawler reiterated Thursday that the company opposes the administration’s decision. “Direct federal regulation of methane emissions is a critical step to protecting the environment and keeping the gas in our pipes in order to provide it to the market,” Lawler said in an emailed statement.

Shell U.S. President Gretchen Watkins called the EPA’s decision “frustrating and disappointing,” given clear “negative impacts of leaks and fugitive emissions.”

Energy analysts predicted the Trump administration’s move may prompt New Mexico and other states to write more stringent rules clamping down on methane emissions.

Compensatory Actions

Regulators in both Europe and U.S. states could embrace “more rigid regulatory protocols to compensate for a continuing U.S. federal deregulatory posture,” ClearView Energy Partners said in a research note to clients.

The Trump administration’s retreat on methane comes as the president courts oil and gas industry voters in Pennsylvania and Texas, two must-win states for him in November.

It’s not clear whether the approach will have widespread appeal, though. Polling released by the NRDC showed 75% of respondents -- both Republicans and Democrats -- support strengthening federal standards to restrict the intentional release of methane from wells and require companies to repair leaks.

The administration’s pivot is also vulnerable to reversal. If Democrat Joe Biden wins election, his administration would have several avenues, from a potential congressional repeal of the methane rule to settling litigation over it, to make good on his promise of “aggressive methane pollution limits for new and existing oil and gas operations.”

(Updates with details from EPA from fifth paragraph)

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Elizabeth Wasserman, Ros Krasny

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