Trump Administration Curbs Obama-Era Methane Rules

Published November 15, 2018

The U.S. Department of Interior (DOI) and the U.S. Environmental Protection Agency (EPA) have replaced Obama-era rules targeting methane emissions from oil and gas operations on federal land with regulations developed by Trump administration officials.

DOI unveiled its revision of the 2016 Waste Prevention Rule, intended to reduce methane emissions from flaring and venting during oil and gas production on federal lands, on September 18.

Methane is a greenhouse gas. The 2016 rule, scheduled to take effect in January 2019, was part of the Obama administration’s efforts to reduce greenhouse gas emissions to fight purported climate change.

The oil and gas industry sued to block the regulation, saying DOI lacked the legal authority to enforce the proposed venting and flaring regulations under the Clean Air Act. Historically, states have regulated oil and gas operations on federal lands, handling issues such as waste disposal, gas leaks, and venting. As a result, states have developed comprehensive rules and guidelines for oil and gas operators. In April, a federal judge in Wyoming put the 2016 regulation on hold pending completion of the Trump administration’s revision of the rules.

From Costs to Benefits

DOI’s new plan reduces the percentage of methane that oil and gas producers must capture at drilling sites.

In a statement, Deputy Interior Secretary David Bernhardt said the revised rules reflect President Donald Trump’s commitment to reducing or eliminating “regulatory burdens that unnecessarily encumber energy production, constrain growth, and prevent job creation.” DOI says the Obama-era rule’s high compliance costs would have forced small operators to shut down, costing jobs and government revenue.

DOI estimated the previous rule would have cost $1.3 billion to $1.6 billion over 10 years. DOI says the revised rule will produce an overall economic benefit of $734 million to $1 billion over 10 years.

Another One Bites the Dust

One week before the Interior Department’s action, EPA announced revisions to another Obama-era methane rule.

EPA is proposing amendments to the New Source Performance Standards (NSPS) controlling emissions of methane and volatile organic compounds during the production of oil and natural gas.

EPA’s proposed new rule would reduce the frequency of required inspections to find methane leaks from every six months to every year, allow companies 60 days to repair any leaks they discover instead of the 30 days imposed by EPA under Obama, and make it easier for companies to deploy emerging technologies to monitor emissions.

EPA estimates its proposed NSPS changes will save an estimated $75 million in regulatory costs annually between 2019 and 2025.

“These commonsense reforms will alleviate unnecessary and duplicative red tape and give the energy sector the regulatory certainty it needs to continue providing affordable and reliable energy to the American people,” Acting EPA Administrator Andrew Wheeler said in a statement. “Removing these excessive regulatory burdens will generate roughly $484 million in cost savings and support increased domestic energy production.”

Waiting for Pipelines

The oil and gas industry has long viewed pipeline leaks and flaring as a waste of a valuable commodity, and as natural gas has become more widely used for electric power production, operators have substantially reduced the amount of natural gas lost to leaks and flaring over the past decade.

Industry officials say one factor responsible for continued flaring is roadblocks some states and the Obama administration raised to the siting and construction of new natural gas pipelines. The length of time taken to review and approve proposed pipelines grew considerably under the Obama administration, they report. Lack of pipeline capacity leaves some shale drillers little choice but to flare potentially marketable methane.

With the Trump administration reducing regulatory barriers and expediting the approval of new pipelines, oil and gas operators expect the amount of natural gas flared to decline. Until adequate infrastructure is in place, however, companies expect to continue to obtain flaring permits from state agencies.

Obama’s Rule ‘Simply Unnecessary’

As part of its efforts to fight climate change, the Obama administration intentionally made it more difficult and costly to develop oil and gas on federal lands, says Tim Benson, a policy analyst with The Heartland Institute, which publishes Environment & Climate News.

“The whole purpose of the Obama administration’s venting and flaring rule was to place additional regulatory burdens on fossil-fuel producers, increasing the cost of production and making oil and natural gas less competitive against ‘renewables’ such as wind and solar,” said Benson. “Producers already know venting and flaring are wasteful and are doing what they can to find ways to reduce the practice.

“This is why venting and flaring of emissions associated with oil production have declined 34 percent since 2015, while emissions from venting and flaring from natural gas production are down 21 percent, according to EPA,” Benson said. “EPA data show nationwide, the methane leakage rate from natural gas operations was only 1.2 percent in 2015, 30 below the global average. The Obama rule was simply unnecessary.”

‘Expensive Regulatory Busywork’

Craig Rucker, executive director of the Committee for a Constructive Tomorrow (CFACT), says the Obama-era rules did nothing to help the environment.

“Making the oil and gas industry perform what was little more than expensive regulatory busywork did nothing for the environment and had no effect on the climate,” Rucker said. “The Trump administration is right to scrap these policies.”

Bonner R. Cohen, Ph.D. ([email protected])┬áis a senior fellow at the National Center for Public Policy Research and a senior policy analyst with the Committee for a Constructive Tomorrow.