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Tracee Bentley's testimony at EPA's Denver public hearing on proposed methane regulations

Testimony at EPA public hearing on proposed methane regulations
Tracee Bentley, executive director, Colorado Petroleum Institute
Denver, Colorado
Wednesday, September 23, 2015

Good morning. My name is Tracee Bentley and I am the Executive Director of the Colorado Petroleum Council, a division of the American Petroleum Institute.

API is the national trade association representing all facets of the oil and natural gas industry, which supports 9.8 million U.S. jobs and 8 percent of the U.S. economy. API has more than 625 members that include large integrated companies, as well as exploration and production, refining, marketing, pipeline, and marine businesses, and service and supply firms. Collectively, they provide most of the nation’s energy and many will be directly impacted by the proposed regulations we are here to discuss today.

In five minutes, it is difficult to speak substantively to the details of each of these proposed actions. However, API intends to submit detailed comments on each.

To my first point, our industry has voluntarily led the way in its pursuit of improved operations to safely maximize the recovery and capture of these valuable oil and gas resources. We are incentivized to do that and many of these leading technologies that have been broadly used by industry were subsequently incorporated by EPA in its Natural Gas STAR program.

My second point. Even as US oil and natural gas production has surged, methane emissions have declined significantly. For example, methane emissions from hydraulically fractured natural gas wells have fallen nearly 79 percent since 2005 and total methane emissions from natural gas systems are down 11 percent over the same period. These reductions have occurred during a time when total US gas production has increased 44%. This industry has also played a significant role in the 27-year lows in power sector CO2 emissions we see today. These trends are indicative of what our industry, when given the freedom to innovate, can achieve to improve the environment and our nation’s energy security. What our industry has and will continue to achieve under the current regulatory system, without directly regulating methane, dwarfs the emission reductions EPA has estimated in these proposed rules.

My third point is that directly regulating methane as proposed in the NSPS rule is unnecessary. The 2012 final rule indirectly regulates methane by regulating “natural gas as a surrogate for VOC”. Since methane is the primary constituent of natural gas, there are no additional emission reductions that will occur from replacing the surrogate regulatory concept with direct regulation of methane. Therefore, EPA should continue the practice of indirectly regulating methane through the use of natural gas as a surrogate for VOC.

My fourth point. We urge EPA not to get in the way of this success story by developing “one size fits all” regulatory solutions. Our industry is big. It is complex. And operations vary substantially across the nation. As we learned in the development of the 2012 NSPS rule, EPA should exercise caution in the development of these rules to allow operational flexibility as it seeks “one size fits all” regulatory solutions. Industry must be able to comply with the requirements of these new rules. In the 2012 NSPS rule, EPA allowed implementation for storage vessel requirements to be phased in to accommodate the vast number of affected facilities. EPA should consider whether or not a similar compliance schedule is warranted in the proposed NSPS rule. We also urge EPA to accommodate operators that are currently implementing leak monitoring and repair requirements, whether due to existing air permits, state regulations (for example Colorado’s Regulation 7) or voluntary commitments, to satisfy the federal rule requirements and minimize regulatory burden for those operators.

Finally, we urge EPA to coordinate its efforts with other agencies to avoid implementing duplicative requirements that could potentially hinder the continued production of the energy that our nation will continue to demand. The rules we are discussing today are a small slice of the pending regulations that our industry is facing. EPA has also released proposed control technique guidelines for implementation of the pending revised ozone air quality standard and pending regulatory requirements from the Department of Interior’s BLM on federal lands. These will also add to the cumulative impact to our industry and future operations. We urge the EPA and the Administration to coordinate their efforts and strongly encourage EPA to extend its comment periods by 60 days, to allow a minimum of 30 days overlap with the proposed BLM rule. Without this overlap, industry will not have the chance to understand the cumulative impacts and provide meaningful feedback to avoid conflicting requirements across the separate agencies.

To close, API and its members recognize the importance of developing these valuable resources responsibly. However, the last thing we need is more duplicative and costly regulation that could increase the cost of energy for Americans and undermine our competitiveness when the operations that will bear the brunt of these regulatory impacts represent only 1.4% of total U.S. GHG emissions. API remains committed to working with EPA and the Administration to identify additional cost-effective control opportunities which, when implemented, do not hinder our ability to provide the energy our nation will continue to demand for many years to come.

Thank you.