White House Climate Push Goes Beyond Coal, With New Rules Targeting Oil and Gas Industry

EPA will issue regulations to cut leaks of the powerful greenhouse-gas methane, but the agency is in for a fight.

Photo taken August 19, 2013 shows natural gas burning off at an oil well site near Tioga, North Dakota. (National Journal)

The White House unveiled plans Wednesday to cut leaks of methane from oil-and-gas production and transport, signaling an expansion of President Obama's fight against climate change that until now has focused most heavily on carbon dioxide pollution from coal-fired power plants.

The strategy, which will include binding new regulations, aims to curb emissions of the potent greenhouse gas from the oil and gas sector by 40 to 45 percent of 2012 levels by 2025. That's expected to save 180 billion cubic feet of natural gas, or enough to power 2 million homes for a year, the White House said.

While the administration has gone heavily after coal and transportation fuels in its effort to fight climate change, the rules announced today mark one of the only attempts to stem greenhouse gas emissions from booming U.S. production of natural gas, which is at record highs. It's an effort certain to face political and lobbying pushback from the petroleum industry and its Capitol Hill allies.

Methane accounts for nearly 10 percent of total U.S. greenhouse-gas pollution, according to 2012 levels, and oil and natural-gas development and infrastructure account for nearly a third of the methane emissions, according to EPA.

But methane packs a wallop even though it's emitted in far smaller amounts nationwide than carbon dioxide and doesn't stay in the atmosphere nearly as long. Pound for pound, methane is 20 times more potent at trapping heat than carbon.

That's why controlling methane leaks is central to whether the nation's natural-gas boom is an ally or enemy in the battle against climate change.

The methane action will be driven through several agencies, headlined by EPA standards on new and modified natural-gas wells to reduce emissions of methane and volatile organic compounds. Those rules will be proposed this summer and finalized in 2016.

Those standards will not affect existing gas wells, as senior White House climate policy aide Dan Utech said the administration was trying to move a "standard-setting process" that focused on new sources where emissions were rising the most. EPA will work with the industry on a voluntary basis on existing sources, although Utech said the administration did make clear "that we need to get reductions from existing sources."

The Interior Department's Bureau of Land Management will also update its decades-old standards on natural-gas flaring, or the burning of excess natural gas. The Energy Department will work on technology to reduce methane loss during gas drilling and to measure emissions from the oil and gas sector for the national Greenhouse Gas Inventory.

With the rules still in the early stages, the White House did not have an estimate of the costs or benefits of the strategy.

Burning natural gas to create electricity generates just half the carbon emissions of burning coal, and as U.S. natural-gas drilling has boomed, the fuel has eaten into coal's once-dominant share of the power market. It's one major reason U.S. carbon emissions are about 10 percent below 2005 levels.

But methane leaks from gas production, processing, pipelines, and elsewhere on the development chain eat into that climate advantage that gas has over coal as a power source. Some researchers argue that these emissions make natural gas just as bad for the climate as coal, but the scope of the problem is a matter of fierce dispute, and research to date has produced conflicting data.

According to a 2012 paper by researchers at several universities and the Environmental Defense Fund, new natural-gas-fired power plants are an immediate climate winner compared with coal-powered plants as long as methane leakage from the various phases of gas development can be kept below roughly 3 percent.

EPA estimates suggest emissions of roughly half that amount, and industry data supplied to the agency show decreases in recent years, but those figures have been challenged.

A 2014 Stanford-led paper, for instance, concluded that EPA has underestimated the scope of the problem.

EPA's decision to write new regulations means the agency must move fast to complete them before Obama leaves office, and battle what's certain to be industry pressure to scuttle or soften them.

Industry officials say they are already taking effective steps to control methane, the primary component of natural gas, and note that they have good financial reasons not to let their product escape into the atmosphere.

"Production is up, emissions are down and we think the industry is incentivized already to remove methane," said Howard Feldman, director of regulatory affairs for the American Petroleum Institute. "We don't want to emit it and want to move it to market."

The administration could also face efforts by ascendant Republicans on Capitol Hill to thwart new rules.

Green groups applauded the rules as a first step, but cautioned that there were still plenty of additional opportunities for addressing methane pollution.

"We will need a clearer roadmap and more decisive action to ensure the administration tackles the most important part of the problem—emissions from existing wells, pipelines and facilities. Otherwise, the goal will not be reached," said Fred Krupp, president of EDF, which has backed natural gas development with regulations. "There is no reason to wait ten years to fix a problem that can be addressed right now at low cost."