Congress could complete by the end of June its rollback of former President Donald Trump’s elimination of methane gas releases from federal clean air regulation when the House is expected to approve the Senate's April 28 action to repeal that September 2020 policy change, setting the stage for a new Biden Administration approach that could include some Obama-era air emissions controls.
The Senate action on methane, passed by a 52-42 vote, enables use of the Congressional Review Act (CRA) to repeal rules that were approved within the last 60 congressional days of a previous administration. The Senate had to pass the CRA by May 21 to allow time for development of new U.S. Environmental Protection Agency rules, set to be proposed in September. They would boost emission standards for new, reconstructed and modified oil and gas facilities, and address those from existing sources.
The Trump rule had fully lifted methane control requirements for production and processing facilities at upstream oil and gas sites and at transmission and storage operations. A second regulation in September 2020 weakened the Obama-era rule for new and modified oil and gas sources including exempting small producers from leak detection and repair requirements.
Congress Moves on Methane
The CRA will nullify those actions, says Dan Grossman, senior director of the Environmental Defense Fund. The 2016 Obama rule required operators to monitor, detect and repair natural gas leaks at wells and along production lines for both new and existing sources. With final review act passage, the Obama rule will be in effect again but would include a weakened “technical” rule that exempted marginal wells from leak detection and repair, Grossman told ENR.
The House approval does not have a specific deadline to pass the measure, but Grossman expects the House Energy and Commerce committee to hold a mark-up session soon. It was introduced by Rep. Diana DeGette (D-Colo.).
A new EPA proposed methane rule, which Biden wants by September, would include all existing sources of leaks, he said, adding that June House passage of the CRA would give EPA time to develop proposed rules to meet Biden’s deadline.
Methane is a strong greenhouse gas, 80 times more effective at trapping heat than carbon dioxide, but only lasting 12 years in the atmosphere, says the Sierra Club. Regulating it is a way to boost climate change mitigation while the more difficult to control CO2 is reduced over time, the environmental group said.
In February, Colorado adopted what is hailed as “nation-leading” rules to cut methane by requiring the use of devices that eliminate its release from the valves that regulate temperature and pressure at production plants and well sites. Requiring the devices nationwide for new sources starting in 2022 could eliminate three million metric tons of methane over the next five years and make a significant dent in methane emissions from the oil and gas industry, says Grossman.
Oil Majors Take Action
Large oil companies are not opposed to methane regulations. In mid-April, BP said it plans to eliminate methane flaring by 2025.
In the Permian Basin of Texas, BP has reduced flaring from 16% in late 2019 to less than 2% today and it is still falling, the company said in April. “We are cutting emissions while significantly increasing the reliability of our field operations, enabling a 20% uplift in production,” Kim Krieger, vice president of operations for BP’s U.S. onshore oil and gas business, said in a statement. Others such as ExxonMobil and Shell also support the reductions.
Investors also are ramping up pressure as a social responsibility move to protect stockholder value. In a May 13 letter to the administration, a coalition of 147 investors with assets totalling $5.35 trillion, said "as prudent fiduciaries, we believe virtually eliminating methane emissions as part of a low carbon transition can support the financial goals of both companies and investors." Noted the group, which includes the giant California State Teachers Retirement System, "by taking action .... government can achieve valuable greenhouse gas reductions while helping American industry become cleaner and more competitive."
In an April 27 report, Moody's said it "expects pressure to inexorably rise for major producers and users of hydrocarbons to adjust business strategies to implement credible transition plans," noting raised credit risk and higher cost of capital.
Even so, attorneys from law firm Gibson, Dunn & Crutcher speculate that the CRA-generated rescission of the Trump rule change could generate new lawsuits. They point to EPA findings in 2020 that separate methane limits for some industry segments "are redundant because controls used to reduce volatile organic compound emissions also reduce methane."
Post a comment to this article
Report Abusive Comment