In a move both praised and criticized by the natural gas industry, the federal Environmental Protection Agency has lifted existing regulations on methane emissions. The rollback is part of President Trump’s efforts to aid the weakened American oil and gas industry, but there is a disparity between big names in the industry and small operators on the benefits that would actually result.
Before the regulatory change, the EPA required all oil and gas operations to install methane detection instruments and develop procedures to detect, rectify and prevent methane leaks from well sites, pipelines, and storage facilities. The new policy would affect the stated systems installed from 2016 on, and significantly decrease the EPA’s oversight of such operations.
The methane rule change follows previous acts of environmental deregulation by the Trump Administration, the rationale for all being to give oil and gas companies increased flexibility in order to overcome the fallout of the pandemic. However, at the same time, Pennsylvania’s Department of Environmental Protection is under pressure to close loopholes in existing state regulations that allow for inaccurate data on methane and VOC (volatile organic compound) emissions to be reported to state regulators.
Though the federal rollback is intended to help the oil and gas industry, there is considerable pushback from giants in the industry, claiming that it actually hurts the natural gas industry. Methane is the main chemical component of extracted natural gas, but is also a potent greenhouse gas which has high ozone depletion potential, with most leaks happening in the extraction, transmission and storage phases of harvesting. Natural gas is also increasingly being used as a cleaner fuel for electrical generation, emitting 50 to 60 percent less environmentally harmful emissions than traditional coal-fired plants.
Chairman and President of BP America Susan Dio stated to the Wall Street Journal that “(we) have to reduce methane emissions for natural gas to realize its full potential in our energy mix,” going further stating “simply, 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”.
For major industry players like BP, Exxon, and Shell, who all operate in Pennsylvania and are pushing to transform their brands to be environmentally minded and focused, deregulating methane emissions would only hurt the industry’s image and public perception of natural gas. Small operators, on the contrary, favor the deregulation, as it decreases necessary expenditures on such equipment, thus decreasing overhead costs. Ironically, as previously discussed in the Shale Gas Knowledge Hub, studies show that it is smaller outfits, not multinational corporations, are less compliant with regulation.
The rollback is expected to be announced this week, but, a change in administration in November would likely lead to legal action to undo the deregulation. The increasing move to action for reversing climate change and moving to renewable energy is also likely to play a role.