Regulatory Reform

Oil and Gas Industry Now in EPA’s Crosshairs

EPA’s Regulatory Train Wreck continues.

Earlier this week, the U.S. Environmental Protection Agency (EPA) proposed a new rule seeking to slash methane emissions from new sources in the oil and natural gas industry by 40 to 45 percent from 2012 levels by 2025. The proposal – a part of President Obama’s Climate Action Plan – comes days after the agency finalized its Clean Power Plan, the cornerstone of the president’s larger climate agenda.

EPA has long been interested in regulating such emissions since methane is orders of magnitude more potent than carbon dioxide in terms of trapping heat in the atmosphere. Although this precise number is highly debated, EPA pegs it somewhere between 28 and 36 times greater over a 100-year period.

Interestingly, despite the increased domestic production of natural gas and oil largely due to advances in hydraulic fracturing and horizontal drilling, U.S. methane emissions have fallen by roughly 11 percent in recent years. According to the American Petroleum Institute, methane emissions specifically at hydraulically fractured natural gas wells have fallen by 79 percent since 2005. These improvements have come as a result of existing regulations and industry innovation.

US methane emissions 1990-2013

Beyond targeting methane emissions, EPA’s proposal would also significantly reduce emissions of volatile organic compounds (VOCs). Ground-level ozone (or smog), yet another target of EPA’s, is the product of a chemical reaction between VOCs and nitrogen oxide (NOX). In addition to oil and gas operations, NOX and VOC emmissions also come from electric utilities, motor vehicle exhaust, gasoline vapors, and chemical solvents.

EPA’s proposal will now be subject to public hearings as well as a comment period.

In Depth: Regulatory Reform

In his first inaugural address, Thomas Jefferson said that “the sum of good government” was one “which shall restrain men from injuring one another” and “shall leave them otherwise free to regulate their own pursuits of industry.” Sadly, governments – both federal and state – have ignored this axiom and…

+ Regulatory Reform In Depth