In latest climate retreat, Trump proposes ending methane curbs

The Trump administration is seeking to abandon regulations designed to stop methane leaks from oil and gas wells, a move opposed not just by environmentalists but even some energy companies that worry it will undermine the appeal of natural gas as climate-friendly fossil fuel.

The proposal was unveiled Thursday by the Environmental Protection Agency.

The Trump EPA was already moving on a separate track to relax requirements put in place by the Obama administration that forced energy companies to use specialized equipment at wells and search out methane leaks at the sites. The new measure would go much further, by scrapping those mandates altogether.

EPA Administrator Andrew Wheeler said the proposal “removes unnecessary and duplicative regulatory burdens from the oil and gas industry.”

“The Trump administration recognizes that methane is valuable, and the industry has an incentive to minimize leaks and maximize its use,” Wheeler said in an emailed news release. “Since 1990, natural gas production in the United States has almost doubled while methane emissions across the natural gas industry have fallen by nearly 15 per cent. Our regulations should not stifle this innovation and progress.”

Independent oil producers applauded the EPA’s move, which would short-circuit a legal requirement that similar methane curbs be imposed on a million existing wells, disproportionately affecting smaller companies. Under the EPA’s change, “hundreds of thousands of existing, small business-owned low-production wells wouldn’t be subject to inappropriate regulations” and be compelled “to use technology requirements” geared toward new facilities, said Lee Fuller, executive vice president of the Independent Petroleum Association of America.

However, the EPA proposal comes against the wishes of several global energy companies, such as BP Plc and Royal Dutch Shell Plc, which have warned the administration’s retreat on methane threatens to undermine the sales pitch for natural gas as a source of electricity that burns cleaner than coal. Executives from both companies criticized the proposal Thursday.

“We have to reduce methane emissions for natural gas to realize its full potential in our energy mix,” BP America Inc. Chairman Susan Dio said by email. “The more gas we keep in our pipes and equipment, the more we can provide to the market — and the faster we can all move toward a lower-carbon future.”

Environmentalists vowed to challenge the move in court, if the EPA finalizes its proposal.

Oil companies with big balance sheets and wells concentrated in a few areas of the U.S. may be better able to absorb the costs of equipment retrofits, methane monitoring and leak-repair programs than smaller, independent producers with wide-ranging infrastructure.

“We believe sound environmental policies are foundational to the vital role natural gas can play in the energy transition and have made clear our support of 2016 law to regulate methane from new and modified onshore sources,” Gretchen Watkins, president of Shell Oil Co., said in an emailed statement. Shell urged the administration to impose methane requirements on existing wells, too, Watkins said, because the “EPA’s commitment to cost-effective regulations makes it uniquely qualified to write a workable rule.”

Supporters of the EPA’s measure say the Obama administration went too far in deciding to specifically regulate methane, rather than focusing on paring conventional pollution from oil and gas infrastructure. “The previous administration’s climate regulations were burdensome, duplicative, and unnecessary,” said Nicolas Loris, a fellow in energy and environmental policy at the Heritage Foundation. “The current EPA is wise to right size them.”

But environmental advocates said the EPA proposal will squander time in an urgent fight against climate change.

The EPA is “proposing to give an entire segment of the oil and gas sector a pass from controlling its air pollution,” said Darin Schroeder, an attorney with the Clean Air Task Force. “To justify these actions, EPA is ignoring decades of its own precedent and mountains of evidence that prove that not only is reducing methane from the entire industry easily done, but it is also extremely important if we are to avoid the most catastrophic impacts from climate change.”

© 2019 Bloomberg L.P.

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