EPA Finalizes Rules to Assist Smaller Oil and Gas Producers

U.S. Senator Kevin Cramer (R-ND), a Senate Environment and Public Works (EPW) Committee member, sent The Crude Life following statement on the Environmental Protection Agency (EPA) finalizing rules to update the New Source Performance Standards (NSPS) for the oil and natural gas industry:

“The Obama Administration weaponized EPA rules to go after the oil and gas industry. Rescinding these unnecessary and politically-motivated regulations better align EPA rules with the Clean Air Act and will save critical resources for our smaller producers of reliable energy, which already have every incentive to reduce methane emissions. Administrator Wheeler understands the importance of protecting American-made energy and carrying out President Trump’s directive to assist this vitally important industry however possible.”

Senator Cramer applauded the rule when the EPA proposed it in August of 2019 and encouraged North Dakotans to offer their input.

North Dakota Petroleum Council President Ron Ness sent The Crude Life a statement praising today’s announcement from the EPA.

“We appreciate the EPA’s work on updating these regulations to reduce the unnecessary burden they placed on our industry,” said Ness. “In these past months we have been hit with a price collapse and decreased demand due to COVID, so getting relief from burdensome regulations will go a long way to help our industry recover. We appreciate President Trump’s leadership and Senator Cramer’s support to address these important issues and help ensure we can continue producing our valuable energy resources in a responsible manner.”

According to the EPA, these final rules will streamline regulations, reduce regulatory burdens, and save the oil and gas industry about $100 million per year in compliance costs while continuing to help provide cleaner, healthier air.

The Obama Administration pushed for the regulation of methane and the transmission and storage segment of the oil and gas sector without taking the appropriate steps to justify such an action. The EPA’s action supports President Trump’s Executive Order on Promoting Energy Independence and Economic Growth, which directs agencies to promote domestic energy production by reviewing regulations that “burden the development or use of domestically produced energy resources.”

Learn more visit the EPA’s website here.

Senator John Hoeven sent The Crude Life the following statement after the Environmental Protection Agency (EPA) finalized updates to its methane rules for oil and gas wells.

“We appreciate the EPA’s efforts to remove the previous administration’s costly and duplicative methane rules for oil and gas wells,” said Hoeven. “EPA’s final rule will help to reduce unnecessary compliance costs borne by consumers, while maintaining appropriate environmental and health protections. At the same time, we continue working to bring certainty to the approval process for pipelines and other vital energy infrastructure to help energy producers capture natural gas and get this valuable resource to market.”

North Dakota Governor Doug Burgum sent the following statement.

“While maintaining our place as the nation’s No. 2 oil producing state, North Dakota continues to have some of the cleanest air in the nation,” Burgum said. “We appreciate the EPA and Trump administration for recognizing the value of innovation over regulation and returning the rules to closer alignment with the original intent of the Clean Air Act. The final rule removes duplicative requirements and allows the industry to reinvest in existing and future infrastructure, protecting the environment and human health while also reducing regulatory costs passed on to American consumers.”

In addition, Burgum noted that North Dakota’s own air pollution control rules have substantially reduced emissions from all phases of oil development, including wellheads, transmission and gas processing. Last year, the North Dakota Legislature approved the governor’s recommendation to direct the state Department of Environmental Quality to achieve state primacy of the federal 0000 air quality program, commonly referred to as “Quad-O.”

Thomas Pyle, President of the American Energy Alliance, sent The Crude Life this.

“President Trump’s EPA has taken another important step in curbing the regulatory excesses of the previous administration. Today’s actions by the EPA are a recognition that the Obama-Biden methane rule was duplicative, costly, and unnecessary. Cleaning up the 2016 methane mess will allow our independent natural gas and oil producers to continue to provide American families with the low-cost gasoline and clean burning electricity that powers our lives.

The numbers tell the story. From 1990 through 2015, a year before Obama-Biden methane rule was finalized, natural gas production in the U.S. went up by 55 percent, while methane emissions from natural gas production went down by 23 percent. Recent data on methane reductions for the Permian and Appalachian basins is even more dramatic and further proof that the hysteria from the green left and the media surrounding this rule is completely unwarranted.

The green left will pull from the same, tired playbook and claim that this is an environmental rollback and an attack on human health. Don’t fall for it. The reality is, they are upset that President Trump has taken another important step towards ensuring we have both a vibrant economy and a healthy environment. More importantly, it is a recognition that the free market is a more powerful driver of environmental progress than top down government control.”

According to the EPA, the two actions today will yield $750 to $850 million in net benefits over the period from 2021-2030, (7 percent and 3 percent discount rates, respectively) or an annualized equivalent of about $130 million a year. The volatile organic compounds (VOC) regulations for production and processing, which are the compounds that actually are harmful to air quality, will remain in place.

Western Energy Alliance President Kathleen Sgamma sent this statement to The Crude Life:

“Western Energy Alliance is pleased that EPA has finalized the methane rule. The rule is a sensible combination of technical fixes to the 2016 rule, as well as a correction to the violations of the Clean Air Act present in the original rule. Throughout this process, environmental groups and the media have misrepresented the rule changes as the Trump Administration rolling back any regulation of methane. This is a willfully false narrative that luckily, Administrator Wheeler had the courage to stand against. I use the word ‘courage’ intentionally as the outright lies about this rule by the environmental lobby are calculated as a way of achieving political goals without doing the hard work of following the law. Most Administrators have withered under that pressure, or were part of such efforts themselves.

“Every single molecule of methane from new oil and natural gas wells will be captured by this revised rule. Methane Leak Detection and Repair, tank and pneumatic controls, and controls from the wellhead to the gas plant remain. The difference is that EPA has recognized that the Obama Administration failed to do a proper endangerment finding for methane along with a significant contribution finding, thereby violating the Clean Air Act. Administrator Wheeler’s EPA has corrected that major violation of the Clean Air Act by regulating methane as a co-benefit of controlling VOCs (Volatile Organic Compounds).

“Likewise, the Obama Administration violated the Clean Air Act by failing to do a source determination for the transmission and storage sector. Regulating that sector of the industry remains an option, but to do so requires EPA to follow the law and go through the full process. The Obama Administration, as with shortcuts in other areas, failed to follow the law at the behest of an environmental lobby seeking to impose its goals without being bound by the democratic process inherent in an open, public rulemaking process. Administrator Wheeler has corrected those legal violations while continuing to regulate methane.”

“Another source of misinformation surrounding this rule involves the oil and natural gas industry’s contribution to methane. Numbers become misquoted or are not updated with the latest inventory data, so here are the numbers:

Methane is a greenhouse gas (GHG) 25 times more potent than carbon dioxide (CO₂). Because CO₂is by far the largest GHG, any inventory puts all GHGs in carbon dioxide equivalents, which takes into account their full potency and therefore, enables comparison. EPA and the Intergovernmental Panel on Climate Change use the scientifically accepted number of 25.
Those who cite GHG inventories but then say that methane is 25, 30, or 80 times more potent, whatever number they use, are either deliberately trying to obfuscate and make methane sound like a greater contributor than it is, or are confused. Converting to carbon dioxide equivalents already factors in the additional potency.
According to the latest EPA GHG inventory, methane makes up 9.5% of total U.S. greenhouse gas emissions.
Of that, the oil and natural gas industry accounts for 27.8% of U.S. methane emissions. It is not the largest human or industrial source of emissions. Agriculture is the largest contributor, accounting for 39.9% of U.S. methane emissions.
EPA finds the entire oil and natural gas industry accounts for 2.64% of total U.S. GHG emissions. The numbers behind that percentage are 176.2 million metric tons of carbon dioxide equivalents (MMT CO₂ Eq) compared to total U.S. GHG emissions of 6,676.6 MMT CO₂ Eq. The upstream sector, the target of the 2016 and 2020 OOOOa rules, accounts for 1.15% (76.6 MMT CO₂ Eq) of that.
EPA’s analysis of the rule finalized today estimates it could lead to a 1.4 MMT CO₂ Eq increase compared to the previous rule, which represents about 0.02% of total U.S. greenhouse gas emissions.
Western Energy Alliance believes the estimated increase will be even lower, given that in just a few years’ time, even without rules that apply to existing sources, the vast majority of wells will be subject to the 2020 NSPS OOOOa rule because of the decline in production that naturally occurs from shale wells.
To put that small increase into perspective, last year fuel switching to natural gas in the electricity sector reduced 444 MMT CO₂ Eq. Since 2005, the oil and natural gas industry has enabled the United States to reduce 2,823 MMT CO₂ Eq, more than wind and solar combined, which have reduced 1,799 MMT CO₂ Eq.
Likewise, our industry has enabled the United States to reduce total greenhouse gas emissions 10.2% below 2005 levels.