The Environmental Protection Agency (EPA) repealed an Obama-era rule Thursday forcing oil and natural gas companies to provide the agency information about methane emissions.
Eleven states including Louisiana, Oklahoma and Texas formally found this reporting request burdensome. Last November, EPA sent letters to 15,000 oil and gas operators requiring them to provide information on their facilities and methane emissions at the sites. EPA claimed they needed this information as part of former President Barack Obama’s plan to address global warming.
“We are committed to strengthening our partnership with the states,” Scott Pruitt, President Donald Trump’s recently confirmed EPA administrator, said in a statement. “Today’s action will reduce burdens on businesses while we take a closer look at the need for additional information from this industry.”
Opponents of these methane regulations note that their costs fall disproportionately on smaller oil companies, harming them much more than their larger competitors.
“A small family run oil company couldn’t afford the kind of regulations and would have been forced out of business,” Christopher Guith, a vice president for energy at the U.S. Chamber of Commerce, told The Daily Caller News Foundation.”The extreme special interests that the previous administration was aligned with hated small oil and gas production. A big business with production in other states could offset those EPA costs.”
Supporters of the federal government regulating methane cited the potential benefits.
“The rule was saddling taxpayers with 36 year old rules about how this gets brought to market,” Ryan Alexander, president of Taxpayers for Common Sense, told The Daily Caller News Foundation. “This rule was in the works for the last 5 years, shame on the last administration for issuing it so late in the game.”
Alexander is worried that U.S. taxpayers aren’t being paid enough for any oil and gas extracted from public land and thinks keeping a Bureau of Land Management (BLM) rule about methane could change that.
The EPA’s rules when combined with other recently imposed federal methane regulations were expected to cost as much as $155 million in 2020 rising to $290 to $400 million by 2025. That’s roughly three times more than EPA’s projected cost, according to a study by National Economic Research Associates.
EPA and the BLM released other rules to reduce methane emissions from oil and gas towards the end of the Obama administration. The House already voted to repeal BLM’s methane rule, and that bill is being considered by the Senate. If the Senate repeals the rule, both the EPA and BLM will likely be barred from crafting similar policies in the future.
“The BLM estimates a phase-in cost of $100 million to $275 with phase in net benefits of additional revenues of about $100 million in 2018,” Alexander said. “This could be a net plus as about $50 million in royalties is lost each year.”
When asked why companies weren’t already capturing methane if it was such an obvious economic benefit for them, Alexander replied “because companies are used to doing things the way they’re used to doing things.”
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