On Wednesday, the Obama Administration announced a new goal and course of action to cut methane emissions from the oil and gas industry by 40-45 percent from 2012 levels by 2025. It’s a sensible near-term target that helps address one of the most potent contributors to global warming. But will the measures the Administration plans to implement be enough to achieve the goal?
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Tackling methane emissions in the oil and gas industry is critical to combating climate change. As my colleague Steve Clemmer details in a recent blog, methane accounts for a significant slice of total U.S. global warming emissions, and is a far more potent greenhouse gas (86 times over a 20-year period) than carbon dioxide. Even more alarming is how much methane is needlessly wasted. The oil and gas industry is the nation’s largest source of industrial methane emissions, responsible via leaks or intentional releases for nearly eight million metric tons each year. If recovered and used, that would be enough gas to heat some 6 million homes!
Fortunately, cost-effective solutions are readily available to reduce this wasted methane. A recent Environmental Defense Fund (EDF) study found that the oil and gas industry could use several existing technologies to cut methane emissions by at least 40 percent at a net cost of less than $0.01/Mcf of gas produced (including savings to companies for selling the recovered gas), less than one percent of the current market price for gas. Other studies by World Resources Institute and Natural Resources Defense Council find that methane emission from the oil and gas industry could be cut by as much as 80 percent.
What’s in the Administration’s plan?
The Administration’s new goal and action plan are part of a multi-sector strategy for reducing methane emission that was launched in March 2014 as part of the President’s comprehensive 2013 Climate Action Plan. It also builds on the Administration’s effort to regulate carbon emissions in the electric power sector under the EPA’s Clean Power Plan.
To achieve the 40 – 45 percent emission reduction goal, the White House laid out a series of actions and measures. The most significant is the announcement that the EPA will initiate a rule-making to set standards for emissions of methane and volatile organic compounds from new and modified oil and gas production sources, as well as natural gas processing and transmission sources. A proposed rule is due in the summer of 2015, with the final rule following in 2016.
In addition, the Bureau of Land Management will lead by example by strengthening standards to reduce venting, flaring, and leaks of natural gas from new and existing oil and gas wells on public lands. As the White House statement noted, this action will not only cut methane emissions, it will also boost royalty revenue from the development of public resources. That makes a lot of sense.
Beyond these two measures, the White House plan calls for:
- Enhanced leak detection and emissions reporting requirements
- New natural gas pipeline safety standards in 2015 from the Pipeline and Hazardous Materials Safety Administration
- $25 million in funding from the President’s FY16 budget for the Department of Energy (DOE) to develop technologies to detect and fix leaks from transmission and distribution systems, and launch a new program to improve emission reporting in the national Greenhouse Gas Inventory.
- New energy efficiency standards for natural gas and air compressors from DOE;
- Release an Administration-wide Quadrennial Energy Review on modernizing energy transmission, storage, and distribution infrastructure.
Voluntary action is not sufficient
While there is much to like about the President’s laudable action plan, the biggest disappointment comes in the omission of existing oil and gas wells in the new regulations that the EPA will be establishing this year. By only including new and modified production sources, the lion’s share of current methane emissions will not be covered for some time. For now, the Administration appears content to let the industry address existing sources through voluntary actions:
“Fully attaining the Administration’s goal will require additional action, particularly with respect to existing sources of methane emissions. Several voluntary industry efforts to address these sources are underway, including EPA’s plans to expand on the successful Natural Gas STAR Program by launching a new partnership in collaboration with key stakeholders later in 2015. EPA will work with DOE, DOT, and leading companies, individually and through broader initiatives such as the One Future Initiative and the Downstream Initiative, to develop and verify robust commitments to reduce methane emissions.”
That’s unfortunate, because EDF recently pointed to evidence suggesting that while some industry players are voluntarily investing in emission reduction technologies and measures, most are not.
The Administration did signal that future regulation of existing methane sources could happen, if voluntary actions fail to achieve significant reductions. But why wait?
Relying on voluntary industry action in this way puts the President’s 40 percent goal in jeopardy. And every year we delay in reducing one of the most potent global warming pollutants puts our climate and health in further jeopardy.