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September 2019

Vol. 24, No.36 Week of September 08, 2019

EPA proposes rollback on Obama administration O&G emissions rule

Alan Bailey

Petroleum News

On Aug. 28 the Environmental Protection Agency announced a proposal to roll back some of the provisions in regulations introduced by the Obama administration for the limitation of air emissions from oil and gas operations. The regulations had been introduced as part of a series of administrative moves to limit U.S. methane and carbon dioxide emissions.

The regulations in question were introduced in 2012 to limit emissions of volatile organic compounds, and in 2016 to limit methane emissions. The EPA says that, by removing regulatory duplication, its proposed rule change will save the oil industry millions of dollars per year in compliance costs. There is a 60 day public comment period following publication of the proposed changes in the Federal Register.

According to an EPA news release, the primary proposal involves removing from regulation potential emissions sources involved in the transmission and storage components of oil and gas industry operations, including compressor stations and underground storage vessels. There is an alternative proposal that would retain these industry components within the regulations but would remove limitations on methane emissions from the equipment. And, while volatile organic compound emission limits would remain for production and processing operations, limits for methane emissions from these operations would be removed.

EPA: remove duplicative burdens

The EPA says that it is responding to an order by President Donald Trump, directing federal agencies to review regulations that potentially burden the development or use of domestic energy resources.

“EPAʼs proposal delivers on President Trumpʼs executive order and removes unnecessary and duplicative regulatory burdens from the oil and gas industry,” said EPA Administrator Andrew Wheeler. “The Trump administration recognizes that methane is valuable, and the industry has an incentive to minimize leaks and maximize its use. 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 percent.”

The American Petroleum Institute expressed its support for the EPA action.

“We support EPA’s efforts to adhere to its statutory obligations under the Clean Air Act,” the API wrote in an Aug. 29 press release. “Under this proposal the oil and gas sector will continue to be effectively regulated. The regulation of volatile organic compounds drives down methane emissions and allows for innovation and technological advancements that help environmental performance and strengthen industry actions to reduce emissions.”

Environmental organization concerns

On the other hand, the Environmental Defense Fund expressed its concern that the weakening of the regulations would lead to undesirable emissions of methane, smog-forming compounds and other air pollutants.

“The EPA has proposed weakening requirements for finding and repairing methane leaks at oil and gas facilities, even though the EPA found the current standards are more cost-effective than the agency expected,” the fund commented in a statement responding to the EPA announcement.

Key questions revolve around the appropriateness of the regulations and the cost of compliance.

“Today’s proposed change focuses on removing costly and duplicative barriers while promoting market-focused solutions,” wrote Thomas Pyle, president of American Energy Alliance, “Incentives to reduce emissions already exist for this industry without the heavy hand of the government and today’s announcement is a breath of fresh air from the previous administration that made every effort possible to regulate the oil and gas industry out of business.”

Oil major coalition

In 2018 the Oil and Gas Climate Initiative, a coalition of 13 major oil companies, set an aggressive target to reduce the methane intensity of their industry by 2025. And according to various media reports, some major oil companies such as Shell, ExxonMobil and BP have expressed support for government regulation of the emissions.

In a March 20 opinion piece in the Houston Chronicle, Susan Dio, chairman and president of BP America, commented that BP supports the need to control methane emissions and that BP and other companies are highly focused on the issue.

“But voluntary actions by several energy companies are not enough to solve the problem,” Dio wrote, reflecting on the issue of methane leakage. “The best way to help further reduce and ultimately eliminate methane emissions industrywide is through direct federal regulation sources.”

- ALAN BAILEY






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