Obama To Impose More Emissions Regulations On Oil And Gas Industry

The US energy industry says there’s no need for the Obama administration to impose new regulations on its emissions of methane because energy companies are doing the job without any government involvement.

The administration says Obama will bypass Congress again and invoke executive authority under the Clean Air Act to set the rules. Its target cuts in emissions will be between 40 percent and 45 percent below 2012 levels, and the target date for these cuts is 2025.

Environmental groups hailed Obama’s decision to reduce the amount of methane that escapes from equipment that oil and gas companies use in production and distribution. It makes up less than 10 percent of pollution in the United States, but is more than 20 times more toxic than the more prevalent greenhouse gas, carbon dioxide, and so has a disproportionate impact on global climate change.

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The White House said it doesn't yet know just how much the new regulations will cost the energy industry, but Dan Utech, the president's climate and energy adviser, said Jan. 14, “There are significant, highly cost-effective opportunities for reducing methane emissions from this sector. We're confident we can do this in a cost-effective way.”

“[T]his is indeed a landmark moment,” Fred Krupp, president of the Environmental Defense Fund, said in a statement. “Methane pollution is both an environmental problem and a needless waste of energy.”

The energy industry, though, argues that new regulations are unnecessary. Not only do they add further legal burdens on oil and gas companies, it says, but they ignore the effort being made voluntarily to capture the emissions and use them as an ingredient for natural gas.

“We don’t need regulation to capture it, because we are incentivized to do it,” Howard Feldman, director of regulatory affairs for the American Petroleum Institute, told The New York Times. “We want to bring it to market. … We don’t think additional regulation is needed at this time.”

The president’s new rules would apply only to future gas wells, so existing wells wouldn't be covered. Nevertheless, it is a valuable first step, according to David Doniger, a senior official at the Natural Resources Defense Council.

Doniger acknowledged that Obama won’t be able to reach his previously stated goals of reducing greenhouse gas emissions unless he includes caps on methane leaks. Last year the president said he wanted to cut overall toxic emissions by 17 percent below 2005 levels by 2020 and by as much as 28 percent by 2026.

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“It is the largest thing left, and it’s the most cost-effective thing they can do that they haven’t done already,” Doniger told The Guardian.

This is the first time Obama has focused on the oil and gas industry in his effort to reduce greenhouse gas emissions. Until now he’s targeted emissions from fuels such as coal from power plants and from gasoline-powered vehicles.

But the administration would have to work quickly to ensure the regulations are in place. Obama’s last year in office is next year, and opposition Republicans, who now control both houses of Congress, already are working with industry groups to resist any further efforts to limit greenhouse gases.

By Andy Tully of Oilprice.com

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