WASHINGTON, May 12, 2016 – The Environmental Protection Agency today issued a final rule aimed at cutting methane emissions from new and existing sources in the oil and gas industry by as much as 45 percent from 2012 levels by 2025.
The rule, part of the Obama administration’s Climate Action Plan, would require producers to locate and fix methane leaks as well as capture gas escaping from hydraulically fractured oil wells. Companies will also be required to provide EPA with information it deems necessary to formulate further regulations targeting methane emissions from existing oil and gas sources.
“Today, we are underscoring the administration’s commitment to finding common-sense ways to cut methane — a potent greenhouse gas fueling climate change — and other harmful pollution from the oil and gas sector,” EPA Administrator Gina McCarthy said on a conference call. “Together these new actions will protect public health and reduce pollution linked to cancer and other serious health effects while allowing industry to continue to grow and provide a vital source of energy for Americans across the country.”
EPA says the final rule was released after the agency reviewed more than 900,000 comments on a proposed rule issued in August 2015. It says the new version updates a number of aspects that increase climate benefits, including removing an exemption for low production wells and requiring leak monitoring surveys twice as often at compressor stations, which have the potential for significant emissions.
The agency says the final standards for new and modified sources are expected to cut methane emissions by 510,000 short tons in 2025 (equivalent to 11 million metric tons of carbon dioxide). Natural gas that is recovered as a result of the rule can be used on site or sold. EPA estimates the final rule will yield climate benefits of $690 million in 2025, outweighing estimated costs of $530 million.
The standards also are expected to reduce 210,000 short tons of ozone-forming volatile organic compounds, or VOCs, in 2025, along with 3,900 tons of air toxics, such as benzene, toluene, ethylbenzene and xylene. Ozone is linked to a variety of serious public health effects, including reduced lung function, asthma attacks, asthma development, emergency room visits and hospital admissions, and early death from respiratory and cardiovascular causes. Air toxics are known or suspected to cause cancer and other serious health effects.
McCarthy said that new research has shown that methane emissions from existing oil and gas sources are substantially higher than was previously understood. Thus the agency is issuing an Information Collection Request (ICR) seeking a broad range of information, including the types of technologies that could be used to reduce emissions and their associated costs. The information the agency receives in response to the ICR will provide the foundation for developing regulations to reduce methane emissions from existing oil and gas sources.
Since the agency does not expect data collection will be finished before early 2017, those regulations would have to be issued under a new administration. But McCarthy said she was confident the rule will survive and that the industry will be able to meet its standards.
EPA’s announcement sparked immediate pushback among Republicans on Capitol Hill.
House Energy and Commerce Committee Chairman Fred Upton of Michigan and the leaders of two Energy subcommittees, Ed Whitfield of Kentucky and John Shimkus of Illinois, issued a release asserting that EPA “continues to go out of its way to target abundant American energy.”
“This new set of rules will add significant burdens and costs to an already highly regulated industry,” they said. “Our economy is already on shaky ground, and more layers of federal regulation will only serve to threaten existing jobs and discourage new domestic production. We will continue to review the legality and merits behind EPA’s regulatory bonanza, and the potential impacts on consumers. It’s time for the administration to finally embrace policies that say yes to energy and yes to jobs.”
Senate Environment and Public Works Committee Chairman Jim Inhofe, R-Okla., questioned the need to impose the regulations when he said the industry is already voluntarily reducing methane emissions.
“The fact remains that methane emissions from oil and gas systems are only a mere 3.5 percent of total domestic greenhouse gas emissions, yet this administration has undertaken at least five significant efforts aimed at punitively attacking this industry for a non-existent problem,” he said.
The American Petroleum Institute called the regulations “unreasonable” and said they “could harm America’s shale energy revolution.”
“The industry is already leading the way on methane reductions because it is good for the environment and good for business,” Kyle Isakower, API’s vice president of regulatory and economic policy, said in a release. “Even as oil and natural gas production has risen dramatically, methane emissions have fallen, thanks to industry leadership and investment in new technologies.”
API says the boost in natural gas and oil production brought on by increased use of hydraulic fracturing, or fracking, saved American consumers more than $550 at the pump in 2015 and added more than $1,300 in disposable income per household.
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