Methane measure revoke fails to pass
USA
WASHINGTON D.C., May 12, 2017 – The US Senate narrowly rejected a resolution to revoke a limit on methane emissions from oil and gas production on Wednesday.
The Senate voted 51 to 49 to not repeal a recent Obama-era rule on greenhouse gas emissions.
The rule in question, which was finalised by the former administration during President Barack Obama’s final weeks in office, was an update of 30-year-old regulations on flaring, venting and natural gas leaks during hydrocarbons production.
Most had expected the measure to pass the Senate, as it had the House of Representatives in February. Both legislative chambers are controlled by President Donald Trump’s Republican Party and have been supportive of the new president’s pro-drilling agenda.
However, three republican senators failed to support a vote that otherwise fell along party lines, saying they feared repealing the rule would make it too hard to pass similar but more accommodating methane emissions legislations in the future.
Established by the Bureau of Land Management (BLM), a government agency which oversees oil and gas production on federal and Native American lands, the rule was part of a target the Obama administration set in 2016 to decrease methane emissions by as much as 45% below 2012 levels by 2025.
The Obama administration estimated the BLM rule would save up to 1.16 bcm (41 bcf) per year of natural gas currently lost to leaks and flaring. The Western Values Project reported that wasted gas could amount to USD 800 million in lost royalty revenue for the US government over the following ten years.
Opponents, however, have claimed the methane rule will cost the government more than it saves.
Environmental Resources Management reported that the additional costs of compliance could result in up to 40% of wells that flare to become uneconomical to produce, cutting off federal government revenue streams. The group said that a 1% loss of royalties due to production cuts results in USD 14 million lost in government royalties.
Other critics have claimed the rule is redundant considering other federal regulations and presents and an unnecessary burden on the oil and gas industry.
The American Petroleum Institute (API), an industry group that has been among the most vocal opponents of the BLM rule, has pointed out that that while natural gas production in the USA has risen by 55% since 1990, methane emissions from natural gas systems have decreased by more than 18% over the same period.
In an interview with TOGY in February, API president Jack Gerard commented on the BLM rule, which he said costs the industry USD 400 million in compliance.
“The trends of declining methane emissions show that the private sector is leading on this issue,” said Gerard.
“The industry was already demonstrating that we could produce more with fewer emissions. That’s not common sense – that’s not smart [to institute further regulations].”
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