Reducing Methane Emissions: Industry Is On It

Mark Green
Posted April 5, 2016

Last week EPA launched a new program it hopes will encourage U.S. oil and natural gas companies to voluntarily focus on reducing methane emissions from oil and gas operations. EPA:

The Methane Challenge Program will provide partner companies with a platform to make company-wide commitments to cut emissions from sources within their operations by implementing a suite of best management practices within five years. Transparency is a fundamental part of the program, and partner achievements will be tracked by submitting annual data directly to EPA.

Two points: First, our industry is already on it, deploying technologies, innovation and yes, best management practices -- effectively capturing methane from energy operations. And it’s succeeding. EPA data shows that since 2005 methane emissions from field production of natural gas have dropped 38 percent, and emissions from hydraulically fractured natural gas wells have dropped 79 percent – at a time of surging natural gas production:

It’s happening because energy companies are working hard to collect methane, the main component of natural gas, for the market. Indeed, the abundance of domestic natural gas is helping lower consumer energy costs for U.S. consumers – including those in the Northeast, which historically has paid more for electricity than other parts of the country – and increasing average annual household disposable income by $1,200.

The U.S. Energy Information Administration (EIA) forecasts that natural gas will be the United States’ No. 1 fuel source for electricity generation this year, which leads us to another benefit: Increased use of natural gas is playing a big role in reducing U.S. emissions of carbon dioxide. EIA says that of CO2 reductions in the electric power sector attributed to fuel shifting toward natural gas and increases in non-carbon generation from 2006 through 2014, 61.4 percent (see Fig. 12) came from shifts to natural gas. API’s Howard Feldman, senior director for regulatory and scientific affairs, during a recent briefing for reporters:

“Industry continues to innovate the technology to reduce those emissions, industry is incentivized to reduce those emissions. So it’s a win-win. They want to capture the methane to bring it to market and increased use of natural gas is benefiting consumers throughout the country and lowering greenhouse gas emissions.”

Second point: EPA’s voluntary methane program comes as the agency readies additional methane regulation on industry that’s potentially duplicative, costly and that could undermine progress industry has made in lowering greenhouse gas emissions. Feldman during a separate press briefing:  

“The vast majority of reductions have been incurred even before the rules became effective. So when you look at the timeline of when the EPA data shows emissions reductions, you can see that we were making significant progress without EPA regulation. … We have been out there as leaders.”

To be clear, the broader context for EPA’s voluntary methane program is the agency’s regulatory targeting of the oil and natural gas industry that virtually ignores significant gains on reducing emissions, largely voluntary, by oil and gas companies. No surprise, then, if industry feels like the thanks it gets for reducing methane emissions is additional regulation. Louis Finkel, API executive vice president, talking recently to reporters:

“The fact is we’re already reducing emissions through innovative technologies, but [many of our companies] are not going to make significant investments and try to engage with the agency when we don’t know what the regulatory regime is going to be. … It’s a very different scenario if we were engaged in a comprehensive discussion with EPA about voluntary programs and not staring down the barrel of multiple regulatory regimes …”

Finkel said there’s a real risk of needlessly hindering America’s domestic energy revolution that has broadly benefited Americans and the U.S. economy while strengthening the country’s energy security:

“We believe the regulatory actions of the administration, especially of the last year or so, as it relates to methane, are unnecessary. In fact they have the potential to stifle the shale revolution. … It’s our view that the administration is responding to environmental extremists. … The idea that you’re going to demonize the oil and gas industry for methane emissions, which again continue to come down, while they have a strong desire to reduce carbon emissions, seems a little bit counterintuitive.”

Finkel said policymakers should consider that the current reality – of significant progress on reducing emissions, plus the economic and security benefits of domestic energy production – argues against an unnecessary regulatory push that could lead to serious negative impacts:

“I think that there clearly is an economic reality that the American people broadly reject, which is increasing their costs of energy and putting their jobs at risk. At the end of the day I’m hopeful that politicians will make thoughtful policy choices based upon the broad views of the American people, not the extreme views of some activists that yell really loud.”