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Industry, green groups push opposing ideas as EPA revises oil, gas methane rules

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Essential Energy Insights - February 2021

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Six trends shaping the industries and sectors we cover in 2021

Six trends shaping the industries and sectors we cover in 2021


Industry, green groups push opposing ideas as EPA revises oil, gas methane rules

Oil and gas drillers and environmental advocates are once again preparing to square off over the federal government's approach to regulating emissions from the upstream industry.

The U.S. Environmental Protection Agency on Nov. 14 is hosting a public comment meeting in Denver on changes to a 2016 rule governing emissions from new oil and gas wells. The EPA said the changes it is proposing to the 2016 rule could save approximately $484 million through 2025.

In advance of the meeting, the American Petroleum Institute offered its support for the revised elements of 2016 New Source Performance Standards, while environmental groups said the changes will weaken important safeguards against leaks of methane and volatile organic compounds.

API said it plans to push the EPA to further cut requirements and costs for the industry. The proposal includes "several missed opportunities," Howard Feldman, API's senior director of regulatory and scientific affairs, said during a Nov. 13 conference call.

API would like to see some key leak detection and repair protocols scaled back, including dropping the frequency of certain leak survey requirements from twice annually to annually, Feldman said, noting that as companies pursue increased repairs, they have found that leaks are not recurring as often as the companies are required to survey.

The association also would like for any overlap between federal and state leak detection program requirements eliminated and for the EPA to leave more room for different technologies to be employed as part of the leak detection process, Feldman said. He also highlighted existing voluntary industry programs aimed at methane emissions reduction.

The EPA has proposed changes that do include modifications to the frequency for monitoring fugitive emissions at well sites and compressor stations, as well as allowing owners and operators to use emerging measurement technologies as part of their leak monitoring processes.

"Parents across the country are outraged by a recent proposal by Trump's Environmental Protection Agency ... to cripple existing protections that limit the amount of methane the oil and gas industry can release into our air," New York-based Moms Clean Air Force said in a Nov. 12 statement previewing plans to participate in the public comment session.

Moms Clean Air Force is a project from the Environmental Defense Fund, which has been highly active in promoting research into the oil and gas sector's methane emissions and pushing for stricter regulations at the state and federal levels.

The Obama-era EPA in May 2016 finalized its rule limiting methane emissions from new and modified oil and gas industry sources, saying at the time that it was expected to reduce 510,000 tons of methane emissions in 2025, which would have the same impact as curbing 11 million tonnes of carbon dioxide emissions. The agency had said implementing the standards was expected to cost about $530 million in 2025 but are expected to result in $690 million in climate benefits that year thanks to the decreased methane emissions.

The industry has long denounced the rule, while environmental advocates touted the regulation and pushed for additional standards to apply to existing emissions sources as well.

Under the Trump administration, the EPA has tried a few routes to pause or revise the standards, some of which were shot down in the courts. The recently proposed revisions are going through the notice-and-comment process and are aimed at cutting "unnecessary and duplicative red tape" for the energy sector, the agency said in September.

"We think this is fully defensible what they're doing here, and we think it's very justified," Feldman said.