Trump’s EPA to Propose Retreat on Methane Rules at Oil Wells

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Trump’s EPA to Propose Retreat on Methane Rules at Oil Wells(Bloomberg) -- The U.S. Environmental Protection Agency is set Thursday to unveil a proposal that would eliminate federal mandates forcing energy companies to identify and repair methane leaks at oil and gas facilities.The measure, which could be finalized next year, responds to concerns by some independent oil producers that without action, the EPA could be forced to impose similar requirements on a million existing oil and gas wells. But it comes against the wishes of several global oil companies, which have implored the Trump administration to maintain methane mandates and continue regulating the potent greenhouse gas.The substance and timing of the proposal were described by people familiar with the matter who asked not to be named before a formal announcement. Bloomberg reported details of the plan earlier this month.Under the proposal, the EPA would effectively divide the oil and gas industry into two segments for the purposes of greenhouse gas regulation, with upstream wells classified separately from pipelines, tanks and natural gas transmission, which would effectively be exempted from methane mandates. The Trump administration proposal would remove storage tanks, pipelines and other transmission infrastructure from any greenhouse-gas regulation.EPA Administrator Andrew Wheeler said in May that if the oil and gas sector were split, it wasn’t clear methane emissions from those sources would be high enough to trigger Clean Air Act controls.Supporters of the measure say the Obama administration went too far in deciding to specifically regulate methane, rather than focusing on paring conventional pollution from oil and gas infrastructure. The Independent Petroleum Association of America also argues the expense and challenge of plugging leaks on some decades-old, low-producing wells could force some companies to shut in production at the sites.However, the proposal comes at a time of increasing anxiety about the effects of climate change. And it threatens to undermine the oil industry’s sales pitch that natural gas is a climate-friendly source of electricity -- a cleaner-burning alternative to coal that can help power an energy-hungry world for decades to come.“We have to reduce methane emissions for natural gas to realize its full potential in our energy mix,” BP America Inc. Chairman Susan Dio said by email. “The more gas we keep in our pipes and equipment, the more we can provide to the market -- and the faster we can all move toward a lower-carbon future.”Dozens of oil companies have made voluntary pledges to keep methane in check, and BP Plc and Royal Dutch Shell Plc have both warned the Trump administration that federal regulation is essential for natural gas to maintain that reputation.“We believe sound environmental policies are foundational to the vital role natural gas can play in the energy transition and have made clear our support of 2016 law to regulate methane from new and modified onshore sources,” Gretchen Watkins, president of Shell Oil Co. said in an emailed statement. Shell urged the administration to impose methane requirements on existing wells, too, Watkins said, because the “EPA’s commitment to cost-effective regulations makes it uniquely qualified to write a workable rule.”Although methane accounts for roughly 10% of U.S. greenhouse gas emissions, it packs a big punch. It has more than 84 times the heat-trapping potential of carbon dioxide the first two decades it escapes into the atmosphere, and is at least 28 times more powerful over a century.Janet McCabe, who helped develop methane rules at the EPA under former President Barack Obama, called the move an example of the agency “responding to a subset of companies in a fossil-intensive industry to roll back sensible measures that would reduce emissions of methane.” She said the regulatory changes “inject more regulatory uncertainty into the system” and fly in the face of a vast body of science showing that reductions in methane are critical to combat climate change.(Updates with details of proposal and comments from Shell and BP from second paragraph.)To contact the reporter on this story: Jennifer A. Dlouhy in Washington at jdlouhy1@bloomberg.netTo contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Elizabeth WassermanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.


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