The U.S. Environmental Protection Agency (EPA) rolled back rules imposed under the administration of President Barack Obama forcing small oil and gas producers to meet the same monitoring, reporting, and repair standards for methane leaks from small wells that major oil and gas companies were required to meet.
The EPA also modified Obama-era methane rules on monitoring and testing for recently completed wells and new wells.
The EPA unveiled four major regulatory changes at an August 13 public signing event attended by EPA Administrator Andrew Wheeler in Pittsburgh, Pennsylvania, in the heart of one of the nation’s top natural gas and oil producing regions.
One change scraps direct methane regulation in favor of monitoring and limiting volatile organic compounds (VOCs), a contributor to smog. VOC emissions are already regulated, and leaks are invariably accompanied by methane leaks in gas and oil wells, pipelines, and associated infrastructure. As a result, preventing VOC leaks also prevents methane emissions.
The second rule modification reduces the number times wells must be checked for leaks and repaired each year, cutting the frequency from quarterly to semi-annually. The final rule also exempts low-producing wells, those yielding 15 barrels of oil a day or less, entirely from inspection and repair requirements. Also, under EPA’s modified rules, wells and other equipment installed before 2015 will not have to be updated with the latest technology required of newer wells to meet stricter emission standards.
‘Reduce Redundancy … Burdensome Regulation’
The new rules are intended to keep America’s energy production dominant by reducing unnecessary regulations for emissions that are already captured both because of other rules and because it is in the economic interest of industry to do so, said various EPA personnel, including Wheeler at the Pittsburgh press conference.
“I’ve had a tremendous visit to Pittsburgh with Deputy Secretary of Energy Menezes and Congressman [Guy] Reschenthaler [(R-PA)]. Our tour of a major manufacturer of leak detection equipment showed me how quickly the industry is moving to capture methane on its own, without burdensome regulation,” said Wheeler. “It’s exciting to see America’s natural gas industry leading the world.
“EPA has been working hard to fulfill President Trump’s promise to cut burdensome and ineffective regulations for our domestic energy industry,” Wheeler said. “Regulatory burdens put into place by the Obama-Biden administration fell heavily on small and medium-sized energy businesses.”
EPA estimated its rule changes, by reducing cost to oil and gas producers, would yield net benefits of $750 to $850 million dollars between 2021 and 2030, or approximately $100 million in annual benefits each year.
“EPA is proud to have this opportunity to streamline recordkeeping and reporting requirements, help smaller wells remain competitive, and reduce redundancy with state requirements,” said EPA Mid-Atlantic Regional Administrator Cosmo Servidio. “This will make it easier for industry to introduce innovative technology and harness market incentives to capture fugitive emissions and by doing so, help us all breathe easier.”
‘Fostering Economic Opportunities’
The new rules will benefits workers, families, and the United States as a whole, said Rep. Guy Reschenthaler (R-PA), speaking at the event.
“As someone born and raised in southwestern Pennsylvania, I have seen firsthand the impact of the natural gas renaissance on our communities, including tremendous job creation and unprecedented wage growth,” said Reschenthaler. “The rules announced today by Administrator Wheeler will remove burdensome regulations while continuing to provide for cleaner and healthier air.
“Thank you to the Trump administration for taking action and for their longstanding commitment to supporting Pennsylvania gas and oil operators, fighting for American energy independence, and fostering economic opportunities for workers and families,” Reschenthaler said.
The Obama administration’s rules were unnecessary because energy producers were already preventing and fixing methane leaks both because it is a valuable commodity and because existing rules restricted emissions of pollutants, said Lee Fuller, executive vice president of Independent Petroleum Association of America, in a statement.
“American producers are committed to managing their greenhouse gas emissions and continue to invest in the development of new technologies to mitigate and reduce emissions,” said Fuller. “Under the EPA’s revision in the regulatory basis, new and modified sources would continue to be regulated, … [h]owever, the hundreds of thousands of existing, small-business-owned low-production wells wouldn’t be subject to inappropriate regulations.”
‘Heavy-Handed Regulations’
The Obama administration’s methane regulations were unnecessary and ineffective in preventing climate change, said Nick Loris, th Herbert and Joyce Morgan Fellow in Energy and Environmental Policy at The Heritage Foundation.
“The United States has become the world’s leading oil and natural gas producer, providing affordable, reliable power to families and businesses,” said Loris in a statement. “But heavy-handed regulations yielding negligible climate benefits threaten the United States’ ability to produce affordable energy.
“The Obama administration’s methane regulations were a costly non-solution in search of a problem,” Loris said. “Energy producers have an incentive to capture and sell methane, the main component in natural gas, because it has economic value—yielding low-cost energy for consumers and reducing the United States’ allies’ dependence on Russian gas.”
Emissions Already Declining
A combination of existing clean-air laws and industry innovations had caused the nation’s air quality to improve long before Obama decided to impose stricter regulations on methane emissions, and emissions would have continued to decline even in the absence of Obama’s rules, says Tim Benson, a policy analyst with The Heartland Institute.
“The Environmental Protection Agency reports the decades-long decline in national air pollution has continued unabated since fracking became frequent and widespread during the middle of the past decade, and methane will still be indirectly regulated by rules designed to limit VOC’s, so this rollback is welcome,” Benson said. “Methane is a valuable gas, so the oil and gas operators have a big financial incentive to make sure they minimize the loss of it through leaks, flaring, and venting.
“Reducing compliance costs will help ensure smaller, ‘mom-and-pop’ operations will be better situated to compete against the big oil conglomerates in the global energy market, which is probably part of the reason why companies like BP, Exxon, and Shell want to keep the Obama rules in place,” Benson said.
H. Sterling Burnett, Ph.D. (hsburnett@heartland.org) is a senior fellow at The Heartland Institute.
