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Industry, environmental groups square off over 2-year stay of EPA methane rule

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Essential Energy Insights - January 2021


Industry, environmental groups square off over 2-year stay of EPA methane rule

In reams of starkly divided public comments, the energy industry and environmental interests explored the physical, economic and public health implications of the U.S. Environmental Protection Agency's plan to implement a two-year stay of a rule to limit methane emissions from oil and gas sources.

For the American Petroleum Institute, the EPA's methane rule, finalized in 2016, has "significant procedural and substantive flaws" that need revisiting. Requiring compliance in the meantime would burden companies with enforcement liability and potentially senseless costs, thereby necessitating a stay, the group said in comments on the proposal.

"[I]mmediate implementation would not produce environmental benefits that are commensurate with the costs and potential legal liabilities," the API wrote as part of the EPA's public comment period for the proposal. "For these reasons, justice compels EPA to stay the 2016 NSPS [new source performance standards] rule."

Several oil- and gas-producing states have their own leak detection and repair requirements, meaning that putting federal requirements on hold would not eliminate all regulation of escaping methane at oil and gas facilities, the industry group said. These state-level regulations provide the public with environmental benefits, while a stay of the federal rule would provide the public with the benefits derived from cost-effective regulations, the association contended.

The comment period on the stay, proposed in June, closed Aug. 9.

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Under the EPA's proposed stay, the industry would not have to comply with the rule's fugitive emissions, pneumatic pump and professional engineer certification requirements for new and modified oil and gas facilities while the agency reconsiders the measures.

The EPA said it plans to revisit the rule's process and criteria for allowing "alternative means of emission limitations" to comply with the rule and to figure out whether the regulation requirements should apply to low-production well sites. Pruitt has said the agency did not adequately factor in public comment and industry impact in these areas before finalizing the regulation.

The agency tried to stay the methane rule for 90 days after the regulation's effective date in June, but a court struck down that move. The EPA's announcement of its plan to suspend the rule for two years coincided with a U.S. Bureau of Land Management decision to suspend its own methane rule for oil and gas producers on federal and tribal lands.

Opponents of the EPA's two-year stay contended in comments that EPA Administrator Scott Pruitt focused on industry interests when deciding to delay implementing parts of the methane regulation and de-prioritized environmental impacts.

The Union of Concerned Scientists said the proposed stay would harm public health, the climate and technology investment.

"In EPA's request for a stay, EPA calculated costs for the industry but not the public," the group wrote. "Given the strong benefits of the rule, this indicates that this proposal is a case of EPA leadership listening to powerful industry voices rather than protecting the health and safety of Americans, which is the outcome we would expect if this was based on an impartial science-based process."

The Sierra Club, which opposes the stay, has taken an active role in collecting comments on the EPA's proposal, assembling over 55,000 by the comment period's close. Lena Moffitt, senior director of the group's Our Wild America Campaign, said the comments do not support Pruitt's perspective and instead demonstrate that the rule is "essential for protecting the health of our communities, families and children."

Trillium Asset Management, which has been active in pushing companies to reduce their methane emissions, expressed concern that staying the rule would allow valuable product to continue escaping and ultimately hurt the economy.

"As long-term investors, we have a vested interest in the continued success of the oil and gas industry, which for many companies, is largely contingent upon the efficient production of natural gas," Trillium wrote. "Further delaying these measures that aim to address resource waste and provide regulatory certainty represent an enormous financial loss for industry, consumers, and investors alike."