Friday, May 13, 2016

EPA says its new methane-emissions rules for oil and gas industry could save more than they cost

The Environmental Protection Agency on Thursday released regulations that "require oil and gas companies to plug and capture leaks of methane from new and modified drilling wells and storage tanks, not older, existing wells," Coral Davenport reports for The New York Times. "EPA estimates that the rules will cost companies around $530 million in 2025, but it also estimates that they will yield companies savings of as much as $690 million from reduced waste, a potential net benefit of $160 million. The agency said the regulations would lower methane emissions by 510,000 tons in 2025, the equivalent of 11 million metric tons of carbon dioxide."

"The new methane rules are the latest part of a broader push by President Obama to cut greenhouse-gas emissions from industries across the economy," Davenport writes. "EPA regulations would cut carbon-dioxide emissions from cars, trucks and power plants, and new rules are in the works to reduce emissions from airplanes. Many of those regulations could face years of litigation before they can go into force."

EPA said the rules will help "cut methane emissions 40 to 45 percent below 2012 levels by 2025 and forms a key part of the U.S. plan to meet its Paris climate agreement pledge," Valerie Volcovici reports for Reuters. "The rule, first proposed last August, outlines safeguards for preventing the escape of methane from new and modified oil and natural gas infrastructure, the largest source of those emissions in the U.S. EPA also launched an 'Information Collection Request' that requires companies to provide details about their existing oil and gas facilities from autumn 2016 until early 2017. This is the first step toward regulating existing sources, which accounts for 90 percent of U.S. methane emissions."

Oil and gas industry groups have vowed to fight the regulations. Kyle Isakower, vice president for regulatory policy at the American Petroleum Institute, told Davenport, “It doesn’t make sense that the administration would add unreasonable and overly burdensome regulations when the industry is already leading the way in reducing emissions. Imposing a one-size-fits-all scheme on the industry could actually stifle innovation and discourage investments.”

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