Obama angers oil and gas lobby by tackling methane emissions

Barack Obama
Source: WikiCommons

The Obama administration’s new regulations on methane emissions might signal a new, tougher, stance against the oil and gas industry – observers believe.

The new rules, aimed at reducing methane emissions to 45 per cent below 2012 levels within 10 years by cutting down leaks at oil and gas sites and along pipeline networks have been met with limited praise from the environmentalists and anger from the oil industry.

Environmentalists see methane as a problem because it is a very potent greenhouse gas. According to the EPA, over the period of 25 years, the global warming potential of methane is 72 times that of carbon dioxide. Over the period of 100 years, they’ve found that methane is about 25 times more potent than carbon dioxide in its global warming proclivity.

An updated report by the United Nations-led Intergovernmental Panel on Climate Change set this number even higher stating that methane is 34 times more potent over the span of a century. Most notably, it found that methane is even more dangerous in the short term, with 86 times the global warming potential of carbon over a 20-year time frame, and 100 times the potency over the course of a decade, according to the 2013 report.

It is believed that faulty equipment and leaky systems cause more than 8 million metric tons of unburned methane to seep into the atmosphere each year – the climate equivalent of running 180 coal-fired power plants. Federal regulators say they will set new standards to minimize leaks in new and modified oil and gas systems, while officials and companies will work together to craft voluntary guidelines for existing facilities.

Environmentalists have welcomed the new regulations but say that they don’t go far enough. For example they exclude existing oil and gas infrastructure even though these systems make up 90 percent of the industry’s methane emissions.

“The plan is only addressing part of the problem. They’re not tackling the lion’s share of current emissions,” Jeffrey Deyette, a senior energy analyst at the Union of Concerned Scientists, a science advocacy group in Massachusetts, told International Business Times.

Industry lobbyists, on the other hand, feel that new regulations are unnecessary and – in the words of Jack Gerard, American Petroleum Institute (API) president and CEO – “could disrupt America’s energy renaissance”.

“As oil and natural gas production has risen dramatically, methane emissions have fallen thanks to industry leadership and investment in new technologies,” Gerard said. “And even with that knowledge, the White House has singled out oil and natural gas for regulation, where methane emissions represent only two percent of total greenhouse gas emissions.

“Emissions will continue to fall as operators innovate and find new ways to capture and deliver more methane to consumers, and existing EPA and state regulations are working. Another layer of burdensome requirements could actually slow down industry progress to reduce methane emissions.”

The API points to the University of Texas’ study which found that methane emissions are 10 percent lower than what the same research team found in a study released in September 2013. EPA also recently observed that methane emissions from hydraulic fracturing have fallen by 73 percent since 2011. These figures, however, are hotly disputed by Jeffrey Deyette and environmental scientists who argue that they are too low and based on outdated information. They say methane likely makes up one-third or more of total U.S. emissions.

Whether Deyette’s estimates are accurate or not, by EPA’s own assessment methane from oil production operations has increased during the drilling boom, up 10 percent since 2008.

Environmentalists blame shale exploration for exacerbating global warming. Oil and gas lobbyists disagree. Energy in Depth, a petroleum-industry research, education and outreach campaign, quotes research that shows CO2 emissions to be at their lowest in 20 years and credits greater use of natural gas from shale exploration with this decline.

Also, as Howard Feldman, regulatory director at the API, points out, methane itself is a natural gas, and the industry already has a financial incentive to capture and sell it.

“We don’t need regulation to capture it, because we are incentivized to do it,” Feldman says. “We want to bring it to market.”

Having said that, it is common knowledge, that when gas prices hit a low, many exploration companies chose to flare the gas rather than incur the costs of bringing it to market.

Many analysts see the new drive for regulation as a sign of a shift of attitude of the Obama administration towards a tougher stance against the oil and gas industry – a sign that President Obama is trying to build his environmental legacy.

“The relationship is changing. This is another data point that suggests a stricter approach,” Kevin Book, an analyst at Washington, D.C.-based ClearView Energy Partners told EnergyWire. The administration’s outlook, he said, “is definitely greening up.”

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