U.S. unveils crackdown on methane from oil and gas industry (updated)

Earthworks Industries

02/11/2021 12:06

* Oil, gas methane emissions at center of EPA plan
    * U.S. oil, gas companies required to monitor 300,000 wells
    * Aim is to slash 74% of methane emissions from 2005 levels
by
2035

 (Adds background on Obama and Trump regulations, details on
cost, industry reaction)
    By Valerie Volcovici and Nichola Groom
    Nov 2 (Reuters) - The United States on Tuesday unveiled a
plan to slash emissions of the greenhouse gas methane from oil
and gas operations as part of its strategy to crack down on
climate change, drawing cautious support from both environmental
groups and drillers.
    The announcement coincided with the U.N. climate conference
in Glasgow, Scotland, where the United States, the world's
second-largest greenhouse gas emitter, is seeking to reclaim
leadership on the world stage by demonstrating tangible steps to
curb emissions at home.
    U.S. President Joe Biden has set a target to slash
greenhouse gas emissions by more than 50% by 2030 but is
struggling to pass climate legislation through a deeply divided
Congress, making policies by federal agencies more crucial. 
    His administration and the European Union are also seeking
to lead a new international pact to reduce methane economy-wide
by 30% by 2030, drawing participation https://www.reuters.com/business/environment/nearly-90-countries-join-pact-slash-planet-warming-methane-emissions-2021-11-02
 from over 100 countries. 
    Methane is the second-biggest cause of climate change after
carbon dioxide. Its high heat-trapping potential and relatively
short lifespan in the atmosphere means cutting its emissions can
have an outsized impact on the trajectory of the world's
climate.
    At the center of the U.S. plan to tackle methane
domestically is an Environmental Protection Agency proposal that
will for the first time require oil and gas operators to
aggressively detect and repair methane leaks. Oil and gas
operations account for a third of methane emissions.
    "The timing of this is critical. As we speak, world leaders
are gathering right now in Glasgow and they are looking to the
United States for true leadership," EPA Administrator Michael
Regan told Reuters in an interview. "This proposal is absolutely
bold, aggressive and comprehensive." 
    Specifically, the proposal will require companies to monitor
300,000 of their biggest well sites every three months, ban the
venting of methane produced as a byproduct of crude oil into the
atmosphere, and require upgrades to equipment such as storage
tanks, compressors, and pneumatic pumps.
    The rules will most likely take effect in 2023 and will be
aimed at slashing methane from oil and gas operations by 74%
from 2005 levels by 2035, an amount equivalent to the emissions
created by all U.S. passenger cars and planes in 2019, according
to the summary.
    While the United States has never before proposed to
regulate methane emissions from existing sources, the Obama
administration in 2016 introduced curbs on methane emissions
from new oil and gas infrastructure. 
    Those regulations, which were weaker than the new EPA
proposals, were scrapped by former President Donald Trump before
being reinstated earlier this year by Congress.   
    The new EPA rules are expected to add "pennies" to the cost
of a barrel of oil or thousand cubic feet of gas, according to
the EPA's analysis. But oil industry group the American
Exploration & Production Council said they could add
"siginficant new costs associated with compliance."           
    The American Petroleum Institute, which represents the U.S.
oil and gas industry, said it was reviewing the proposals.
    “We support the direct regulation of methane from new and
existing sources and are committed to building on the progress
we have achieved in reducing methane emissions," it said in a
statement. 
    Major producer BP Plc  BP.L , which has been seeking to
burnish its green credentials and is investing heavily in clean
energy, said it applauded the EPA proposals. 
    Washington-based environmental group Earthworks also called
the proposals a positive step, but its policy director, Lauren
Pagel, said "no well should be exempt from common-sense
pollution standards when we know all wells pollute."
    The American Lung Association also said the proposal was a
good start but the EPA needs to "set stronger limits and
finalize them into law without delay".
        
    QUARTERLY MONITORING
    One issue of contention is the fact the EPA's well
monitoring proposal applies only to sites emitting an estimated
three tons of methane per year or more. 
    The agency said the three ton threshold would capture sites
responsible for 86% of leaks. 
    Smaller sites will require less scrutiny.
    Oil and gas industry groups had pressed the EPA to exclude
smaller wells from the regulations, citing the sheer number of
such wells and the costs of the monitoring and repairs.
    Environmental advocates, meanwhile, had pushed for all well
sites to be covered, and were also seeking limits on flaring:
the practice of burning off methane that comes out of the ground
as a byproduct during crude oil drilling.
    The EPA said it will release a supplemental proposal next
year to flesh out the rules and possibly expand them to include
additional methane sources, including abandoned oil and gas
wells, flares and tank truck loading.
    The Biden administration's methane strategy will also
include a new proposal by the Pipeline and Hazardous Materials
Safety Administration requiring companies to monitor and repair
leaks on about 400,000 miles (643,740 km) of previously
unregulated natural gas gathering lines. 
    The administration's broader methane plan also proposes new
voluntary measures from the Agriculture and Interior departments
to tackle methane emissions from other major sources, including
landfills, agriculture and abandoned wells and coal mines.

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 (Reporting by Valerie Volcovici and Nichola Groom; Editing by
Gerry Doyle and Alistair Bell)
 ((nichola.groom@thomsonreuters.com;))