Oil lobby: Methane rules could increase emissions

The Obama administration’s new restrictions on methane emissions from the oil and natural gas sector could actually increase greenhouse gas emissions, the industry says.

The American Petroleum Institute (API) argues that by increasing the costs of drilling for natural gas, the Environmental Protection Agency (EPA) is making it a less attractive fuel source. That could reduce the incentive to use it instead of more carbon dioxide-intensive fuels like coal.

{mosads}“Methane regulation under this rule is bad for consumers and not necessarily good for the environment either,” Howard Feldman, senior director for regulatory affairs at the API, told reporters Thursday after the EPA unveiled the final version of its regulation.

“It doesn’t make sense that the administration would add unreasonable and overly burdensome regulations when the industry is already leading the way in reducing emissions,” said Kyle Isakower, the group’s vice president of regulatory policy.

“The last thing we need is more duplicative and costly regulations that discourage natural gas production, interrupt our progress reducing emissions and increase the cost of energy for American consumers,” he said.

The EPA’s regulation imposes new standards meant to stop emissions of methane, a potent greenhouse gas that is the main component of natural gas.

The final rule, the EPA predicts, will cut 520,000 short tons of methane in 2025, the equivalent of 11 million metric tons of carbon dioxide. Compared with last year’s proposed rule, it is much stronger, with new provisions that remove exemptions for low-producing wells, increase leak monitoring and other changes.

The API said it doubts the EPA’s contention that the rule is cost-effective. The group said the proposed rule had costs that were about double the benefits, and while it has not fully analyzed the final version, Feldman and Isakower predicted it would be at least as bad.

“Imposing a one-size-fits-all scheme on the industry could actually stifle innovation and discourage investments in new technologies that could serve to further reduce emissions,” Isakower said. “Natural gas is a proven source of clean, affordable and reliable energy.”

In addition to raising emissions, API predicted that the rule will stifle the natural gas boom of recent years that has been responsible for low energy prices and thousands of jobs.

Isakower said the API has not yet decided whether to sue the EPA to have the rule overturned, but it is a possibility the group is considering.

The EPA said its rule is sound.

“Today’s actions are commonsense measures to reduce methane, which fuels climate change, and cut harmful pollution linked to serious health effects while allowing industry to continue to provide a vital source of energy for Americans,” spokeswoman Laura Allen said.

The agency expects that the rule’s benefits in terms of climate change alone will reach $690 million annually by 2025.

— This story was updated at 3:40 p.m.