Oil and gas industry, environmentalists debate federal, state methane laws
Methane emissions continued to be debated on both the state and federal level, as environmentalists bashed the U.S. Environmental Protection Agency’s plan to cut federal regulations as the State of New Mexico works to adopt tougher regulations
New Mexico, Gov. Michelle Lujan Grisham recently formed via executive order the State’s Climate Change Task Force, which was initially called upon to draft state laws intended to strengthen methane regulations.
The New Mexico Environment Department and Energy, Minerals and Natural Resources Department jointly embarked on a series of stakeholder meetings across the state to gauge public opinion ahead of developing new state regulations.
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The Western Environmental Law Center published a list of seven principles it said should be followed during the State’s process of drafting the legislation.
First, the center called for “near-zero tolerance for methane waste,” demanding the industry find ways to capture methane instead of venting it into the air or burning if off via flaring.
“Industry has been venting, flaring and leaking methane as standard business practice for too long and the consequences for New Mexicans have grown too severe to allow business as usual to continue,” read a statement from the Center.
“The New Mexico constitution, state law, and the Governor’s Climate Executive Order provide ample authority for a rule that prevents the majority of this waste.”
The Center also called for new, stricter regulations to go into effect by 2020, pointing to the ongoing boom in production as creating urgency for better oversight.
It also demanded interim actions by the state be developed in the meantime to prevent waste, while also providing incentives to companies investing in better capture technologies and ensuring all sources of methane are covered.
“New Mexicans need a rule as soon as possible given the massive amount of methane that is being wasted at existing oil and gas operations and that will be wasted, absent swift action, due to the boom in new drilling in the New Mexico Permian. We need a rule that goes into effect next year,” read the statement.
“The rule should create incentives for upstream and midstream companies to do a better job planning and building marketing infrastructure so that there is enough take-away capacity ahead of time to accommodate production.”
Industry debates federal law
Criticism for the EPA’s recently announced plan to rescind several of its regulations related to methane regulations from oil and gas operations continued as environmentalists and shareholders from energy companies voiced their concerns.
The EPA announced proposed amendments on Wednesday to its New Source Performance Standards (NSPS) for the oil and gas industry intended to remove duplicative regulations by stripping much of the EPA’s oversight related to methane emissions from oil and gas operations.
Methane is a potent greenhouse gas, and a main ingredient in natural gas extracted during production.
In a Wednesday news release, the EPA said the move could save the oil and gas industry $17 million to $19 million per year.
But a group of shareholders from the oil and gas industry called on producers to oppose any rollback of federal methane regulations, per a news release from the Interfaith Center on Corporate Responsibility.
The investors endorsing the statement represented up to $5.51 trillion, the release read, and cited increased climate change risks and economic damage that could be caused by more lax standards for methane emissions.
During oil production, natural gas can also be brought to the surface along with crude oil.
Excess gas is often released into the atmosphere through venting or burned off via flaring.
The 140 global investors sent their statement in an Aug. 27 letter to 35 oil and gas producers and midstream companies, read the release, urging the industry to oppose rollbacks of the NSPS, while supporting continued federal regulation.
“The EPA’s proposed rollback of methane regulations comes at a landmark time for the U.S. oil and gas industry, presenting a risk to recent economic gains,” read the letter.
“As U.S. production reaches record highs and the U.S. oil and gas industry experiences strong export growth, methane standards support global competitiveness in a world with shrinking carbon budgets and growing international climate policy action.”
The investors questioned the EPA’s decision to decrease regulation, citing a loss of revenue that could be gained from captured gas, and damage done to the environment.
“The rollback of existing, strong, yet cost effective, regulatory standards will lead to policy uncertainty for industry for years to come. Further, a decision by the EPA to stop considering the oil and gas industry a significant source of harmful methane emissions could increase legal uncertainty over the status of the rollback itself,” the letter read.
“Finally, if the proposed rollback is enacted without opposition from those in industry, the deregulation of methane and the acquiescence of the industry will shape the public narrative on natural gas, overshadowing proactive measures of industry leaders.”
But the changes were supported by national oil and gas trade group the American Petroleum Institute (API).
In a December 2018 letter API senior policy advisor Matthew Todd wrote to Acting EPA Administrator Andrew Wheeler that the EPA’s regulations as they stood were overly “burdensome” as they required producers to keep duplicative records, and follow guidelines overlapping with state law.
Todd also pointed to an alleged 16 percent drop in methane emissions since 1990, even as production grew 50 percent.
He also said emissions from hydraulically-fractured natural gas wells dropped by more 85 percent in the same time frame, representing the lowest levels in 30 years.
“These trends are indicative of what our industry, when given the freedom to innovate, can achieve to improve the environment while protecting our nation’s energy security,” Todd wrote. “We fully expect that progress will continue.”
Christina Herman, program director for climate and the environment at the Center pointed to oil and gas major producers Shell, BP and Exxon as endorsing tougher requirements, and said a lack of consistent federal guidelines could fragment the market as more than 60 percent of the industry, she said, has “no quantitative methane target.”
“We are indeed gratified to see responsible oil and gas companies recognize the importance of addressing this significant problem,” she said. “But clearly more industry voices are needed to help make the business case.”
More oil and gas news:
- Southeast New Mexico lizard threatened by oil and gas operations, litigation possible
- Environmentalists challenge oil and gas industry-led methane policy in New Mexico
- American oil reaches 'record-high- production, driven by Permian Basin
- Oil and gas industry, environmentalists spar over methane emissions in New Mexico
- New Mexico gets millions more in revenue from oil and gas than predicted
Adrian Hedden can be reached at 575-628-5516, email@example.com or @AdrianHedden on Twitter.