Why some oil companies oppose Trump's methane check rollback

The Trump administration has authorized the rollback of an Obama-era rule designed to limit methane leaks, a change environmental advocates say is illegal. Small oil and gas operators support the move, but major companies who were already exceeding the rule's requirements oppose it.

Keith Srakocic/AP
Light shines on a shale gas drilling site in St. Mary's, Pennsylvania on March 12, 2020. The Trump administration formalized the regulatory rollback in Pennsylvania – the heart of the nation's most prolific natural gas reservoir and a presidential battleground state.

President Donald Trump's administration is undoing Obama-era rules designed to limit potent greenhouse gas emissions from oil and gas fields and pipelines, formalizing the changes Thursday in the heart of the nation's most prolific natural gas reservoir and in the premier presidential battleground state of Pennsylvania.

Andrew Wheeler, the Environmental Protection Agency administrator, signed the rollback of the 2016 methane emissions rule in Pittsburgh as the agency touted the Trump administration's efforts to "strengthen and promote American energy.”

The EPA first proposed the rollback last year, accusing the Obama administration of enacting a legally flawed rule, and agency officials said it would save companies tens of millions of dollars a year in compliance requirements without changing the trajectory of methane emissions.

But states, including California, and a coalition of environmental advocacy groups warned that the changes are illegal – not to mention a setback in the fight against climate change – and expect to quickly sue to block it.

“It’s not only negligent, it’s unlawful," California Attorney General Xavier Becerra said in a statement. “We won’t sit silently while the EPA allows this super-pollutant to rapidly warm our atmosphere."

The White House took the event to Pittsburgh, the headquarters for many companies exploring the Marcellus Shale, the booming reservoir that vaulted Pennsylvania to the nation's No. 2 natural gas state, behind Texas.

“EPA has been working hard to fulfill President Trump’s promise to cut burdensome and ineffective regulations for our domestic energy industry,” Mr. Wheeler said in a statement.

Reflecting the pervasive politics of the presidential campaign, Mr. Wheeler cast blame onto the presumptive Democratic nominee, former Vice President Joe Biden, saying “regulatory burdens put into place by the Obama-Biden Administration fell heavily on small and medium-sized energy businesses."

Pennsylvania is of prime importance in November's presidential election, and the natural gas industry is playing a central role in TV attack ads being aired in the state by Mr. Trump's allies.

In recent years, preventing methane leaks from well-site equipment and pipelines has become important for regulators because methane is a potent greenhouse gas.

The oil and gas industry was responsible for nearly 30% of the nation’s methane emissions in 2018, and methane accounted for 10% of the nation's greenhouse gas emissions, according to the EPA.

The Trump administration is eliminating the twice-yearly requirement for companies to inspect for methane leaks on equipment installed after 2015 at well sites and downstream segments, such as pipelines, compressor stations, and storage tanks. Leaks must then be fixed.

Supporters of the rule maintained that, based on reports the companies file, it seemed to be helping reduce methane emissions. They also pointed to the EPA's acknowledgment in its technical analysis that its rule changes will increase emissions of methane and smog-forming compounds.

Operators will still have to check equipment for leaks of smog-forming compounds at some higher-producing well sites, but Thursday's changes relaxed those standards and producers won't have to inspect pipelines or downstream equipment anymore.

Any leaks they fix help capture methane, and companies say they have a financial incentive to voluntarily fix leaks to ensure that methane gets to customers, rather than going into the atmosphere.

But, far more importantly, killing the methane emissions rule also blocks a legal requirement for the EPA to extend the rule to cover many more pieces of equipment installed before 2015, environmental advocates say.

“We’ll see them in court because this is blatantly illegal,” said David Doniger, senior strategic director of the climate and clean energy program at the Natural Resources Defense Council.

Robert Howarth, an ecology professor at Cornell University, estimated that shale oil and gas production in North America accounted for one-third of the total global increase in methane emissions over the past year.

Rolling back methane measures now is “dangerously reckless,” Mr. Howarth said. “Methane emissions are increasing rapidly, and the oil and gas industry is clearly part of the problem."

Peter Zalzal, an attorney for the Environmental Defense Fund, said that, without federal leadership, stronger state regulation will be even more important.

Some states – such as California, Colorado, Pennsylvania, and Wyoming – have methane standards that are comparable or stronger than the EPA's 2016 rule. But many big oil and gas states – such as Texas – do not, Mr. Zalzal said.

Oil and gas industry representatives pushed for the methane rollbacks, fearing more expensive rules covering emissions from older equipment. Smaller, independent operators hailed the changes as important to their survival.

"The issue for producers has never been whether regulations were necessary; it has always been whether the regulations were sound and cost effective," the Independent Petroleum Association of America said.

Still, some companies opposed a rollback, noting they had pledged to reduce emissions or pointing out that they were already exceeding the rule's requirements.

Some oil majors including BP, Shell, and ExxonMobil have called on Mr. Trump to strengthen efforts to cap methane emissions. The Trump administration's move is “frustrating and disappointing,” Shell's U.S. president, Gretchen Watkins, said in a statement.

In 2016's election, Mr. Trump eked out a win in Pennsylvania – the first Republican presidential candidate to capture it since 1988 – by piling up support with Pennsylvania’s rural areas and working-class whites.

Since then, Mr. Trump has eagerly promoted the state's gas industry, underscoring his focus on shoring up his base as his appointees have moved to expand extraction on federal lands, boost the export of liquefied natural gas, and restrict the ability of states to block pipelines.

Meanwhile, a pro-Trump super PAC, America First Action, is running TV ads in Pennsylvania accusing Mr. Biden of wanting to ban “fracking,” the process that along with horizontal drilling has unlocked a torrent of oil and natural gas across the United States in the past decade.

Mr. Biden's campaign counters that that is flatly untrue.

Mr. Biden would only ban new gas-drilling permits on public lands, his campaign said, pointing out that about 90% of fracking is on private land.

And while Mr. Trump often ridicules the science behind increasingly urgent warnings for immediate action to stave off the worst of climate damage by cutting fossil fuel emissions, Mr. Biden's campaign said it recognizes that “climate change is an urgent problem and that all Americans have the right to clean air and clean water.”

This story was reported by The Associated Press.

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