A Good First Step – But We Have a Long Way to go on Oil and Gas

Earlier this week USEPA took a long-awaited and critical first step to reduce emissions of the potent greenhouse gas methane from the oil and gas industry. Oil and gas is the largest industrial source of methane pollution, and the standards for methane will also reduce pollution that causes ozone smog and emissions of toxic pollutants like benzene and hexane. Proven, low-cost technologies and practices can dramatically reduce emissions from oil and gas wellsites, compressor stations, processing plants, and other facilities.

The Obama Administration has recognized mitigation of oil and gas as a key climate priority. In January, the White House set the goal of reducing methane emissions from the industry to 40-45% below 2012 levels by 2025. This will equate to the greenhouse gas reductions achieved by shutting down over 250 coal-fired power plants in the 20 years after they are shuttered, with enormous additional benefits for human health and air quality.

The importance of the rules EPA proposed this week should not be understated. Several years back, EPA concluded in the endangerment finding that six greenhouse gases – including methane – threaten the public health and welfare of both current and future generations. EPA’s proposal represents the first methane standards and the first greenhouse gas standards for the oil and natural gas sector. This is important and it is long overdue, and EPA and the Administration should be commended for issuing rules covering a very powerful industry.

Specifically, these standards require industry to use a number of key, common-sense provisions that will reduce harmful emissions, such as:

• Capturing gas after hydraulically fracturing oil wells, instead of dumping the gas in the air.   (EPA’s 2012 rules require this for gas wells but not oil wells.)
• Periodically checking sites for leaks, and fixing them
• Applying proven emissions reduction technologies that are already required at upstream production sites at downstream natural gas transmission facilities.

But even more important is what comes next. When EPA finalizes these methane standards, that triggers a duty under the Clean Air Act to also issue methane emissions guidelines for existing sources within the sector. Addressing these emissions is critical. For example, a study by ICF International predicts that emissions from sites that existed in 2011 (and therefore won’t be subject to either EPA’s 2012 rules, or the rules proposed this week) will represent 90 percent of the sector’s total methane emissions in 2018. This week’s proposal sets the stage to apply the same common-sense work practices and standards to all of the sources responsible for the emissions, not just future sources.

This week’s rules are very good news, but it’s important to be clear-eyed about the additional emissions reductions that are necessary from oil and gas to meet the Administration’s goals and our climate commitments. The rules EPA proposed this week (which include “Control Technique Guidelines” for certain areas with poor air quality), if finalized, will reduce emissions 510,000 – 560,000 metric tons in 2025. EPA reports that 2012 oil and gas emissions were 7,100,000 metric tons of methane, so this week’s proposal represents a reduction of about 7.5% of 2012 emissions.

But, meeting the Administration’s goal is even more challenging because the oil and gas industry is expected to grow between now and 2025. This means that without new rules pollution from the industry will also grow. In fact, the White House predicted that, without any new oil and gas rules, emissions would rise 25% by 2025. Taking all of this into consideration, methane pollution from the industry in 2025 will need to be cut (relative to emissions in 2025 with no new rules in place) by 3,600,000 – 4,000,000 metric tons. The standards EPA proposed this week, when combined with the standards they issued in 2012, will reduce emissions around a million metric tons in 2025.[1] That means there’s about two and a half to three million tons still to go, beyond the 2012 rules and the rules proposed this week, to meet the Administration’s 40-45 percent goal. With these rules in place, methane emissions in 2025 from oil and gas will actually be about 10% more than they were in 2012. That means we have a long way still to go to reach the Administration’s 40-45 percent reduction goal.

To that end, this week’s proposal is a key first step that sets the table for standards for the existing oil and gas facilities that will be responsible for the lion’s share of methane pollution for years to come. The same proven, cost-effective techniques and equipment that EPA proposes to require for new equipment will reduce emissions just as well (and usually for the same low price) at existing equipment. We’ve shown that doing this will dramatically reduce emissions at low cost. This can be done. But we need a lot more emissions reductions – which can only come from standards for existing equipment – to make the Administration’s pollution reduction goal for oil and gas attainable.