The Obama administration on Thursday finalized a new rule designed to cut methane emissions from the oil and natural gas sector, pushing a stronger, and more expensive, standard than one proposed last summer.
The Environmental Protection Agency’s (EPA) methane rule sets standards for methane leaks along the natural gas production line, including drilling and pumping, at new or modified wells.
The agency also said it is kicking off work on a rule for methane leaks at existing wells, but acknowledged that won’t come until after Obama has left office.
Some say methane is a potent greenhouse gas, with more than 25 times the global warming potential than carbon dioxide. It’s the primary component of natural gas, and drillers warn regulations on methane will hurt an American natural gas boom that has upended the country’s energy sector.
The EPA’s new standards are stronger than those it proposed last summer. The rule, if fully implemented, will reduce 520,000 short tons of methane in 2025, or the equivalent of 11 million metric tons of carbon dioxide. The EPA’s original proposed rule would have cut up to 400,000 short tons of methane.
The rule will require companies “to upgrade pumps and compressors, while expanding the use of so-called ‘green completion’ technology meant to capture the surge of gas that can spring out of newly fracked wells.”
According to the EPA, the regulations “will add an estimated $530 million in additional costs per year by 2025,” which is “at least 25 percent higher than the preliminary version released in August.” The administration claims those costs “will be offset by savings from averting severe storms, floods and other consequences of climate change.”
“The common-sense steps we are rolling out today will help combat climate change and reduce air pollution that will immediately help improve public health,” EPA Administrator Gina McCarthy said on Thursday.
Drillers have warned government regulations on natural gas sites will hurt production in the United States, and have instead said they should take the lead on reducing emissions on their own.
Natural gas producers have a financial incentive for cutting down on methane leaks: more efficient drilling means putting more product on the market.
The American Petroleum Institute has previously noted the industry’s work to reduce methane emissions by 11 percent from 2005, and on Thursday said drillers themselves are “already leading the way” on methane leaks.
“Imposing a one-size-fits-all scheme on the industry could actually stifle innovation and discourage investments in new technologies that could serve to further reduce emissions,” API Vice President of Regulatory and Economic Policy Kyle Isakower said in a statement.
The rule also drew criticism on Capitol Hill, mostly among Republican lawmakers.
House Science, Space, and Technology Committee Chairman Lamar Smith (R-TX) said that the rule is “the latest regulatory hit to the private sector as President Obama nears the end of his second term, following the Waters of the United States, the Clean Power Plan, and the Ozone National Ambient Air Quality Standards.”
“This new set of rules will add significant burdens and costs to an already highly regulated industry,” top Energy and Commerce Committee Reps. Fred Upton (R-Mich.), Ed Whitfield (R-Ky.) and John Shimkus (R-Ill.) said in a statement.
“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.”
National Association of Manufacturers’ Vice President of Energy and Resources Policy Ross Eisenberg stated, “Overly prescriptive regulations that limit energy access will only make manufacturers less competitive and send investments and jobs to countries with less stringent environmental protections related to energy and greenhouse gases.”