Industry Reacts to EPA Actions

U.S. Environmental Protection Agency’s Clean Power Plan: Final Rule released on Aug. 3.

EPA’s final rule establishes interim and final CO2 emission performance rates for two subcategories of fossil fuel-fired electric generating units:

  • Fossil fuel-fired electric steam generating units (coal- and oil-fired power plants)
  • Natural gas-fired combined cycle generating units

American Petroleum Institute (API): New power plant rule harms American workers and those struggling to pay for energy

The EPA’s final power plant rule imposes unnecessary costs on states and U.S. consumers, particularly poorer communities, while overlooking the proven, market-driven potential of natural gas to help reduce emissions, said API.

API opposes the rule because it oversteps the authority given to the EPA under the Clean Air Act.

“America is leading the world in reducing emissions thanks to a revolution in the production and use of natural gas,” Howard Feldman, API senior director of regulatory and scientific affairs, said. “We can continue that progress without costly new regulations that could hurt consumers and stifle economic growth.

“Meeting climate challenges must go hand-in-hand with ensuring that Americans have the affordable and reliable energy necessary to grow our economy and create jobs. Instead, the EPA rule could impose the greatest costs on those who can least afford it – Americans looking for jobs and families that don’t have the means to pay higher monthly bills to heat and cool their homes.

“Over the last few years, consumer-driven investments in natural gas have lowered energy bills for hard-pressed families while helping cut emissions to near 20-year lows. By picking winners and losers in the energy mix, EPA’s rules could force consumers to pay far more money for far fewer environmental benefits.

“America’s oil and natural gas industry invests more in zero- and low-emissions technologies than the federal government and nearly as much as all other industries combined. With or without new regulations, natural gas will continue to grow as a critical source of clean energy, but the EPA’s rule does more harm than good.”

RRC Chairman Porter Urges Governor Abbott to Refuse President’s ‘Radical Green Edict’

Railroad Commission of Texas Chairman David Porter in an Aug. 5 letter to Gov. Greg Abbott wrote:

“President Barack Obama’s illegal ‘Clean Power Plan’ will be used by the [EPA] to endanger the Texas economy, and severely stress the financial well being of every individual, family, and business in Texas. Despite lack of support, no debate, and even the failure to garner Congressional approval – including a Democrat controlled Congress in 2010 – the President is imposing his plan on states to dictate our national energy policy for generations to come.”

He continued:

“Just last year, the Supreme Court wrote about EPA’s greenhouse gas rule: ‘When an agency claims to discover in a long-extant statute an unheralded power to regulate a significant portion of the American economy, we typically greet its announcement with a measure of skepticism. We expect Congress to speak clearly if it wishes to assign to an agency decisions of vast economic and political significance.’ Ignoring the Supreme Court by adopting the Clean Power Plan, President Obama is effectively ruling by fiat. The National Economic Research Associates confirms … that most states will see a double-digit price hike as a result of this rule – hurting the pocket books of every hard working Texas that can ill afford to pay more. As if this wasn’t bad enough, this plan also severely threatens Texas’ ability to meet its power needs and destabilizes our electricity grid’s reliability.

He concluded:

“It is for this reason that I urge you as Governor of Texas to refuse participation in the President’s unlawful edict, and to coordinate with other states to ignore the rule. It is our duty to combat a dangerous and radical agenda that places the priority of a vocal minority over the well being of the hard working citizens of Texas, and the United States.”

U.S. Environmental Protection Agency’s Proposed Rule on Methane Regulations: Released on Aug. 18

EPA proposed measures to cut methane and volatile organic compounds (VOC) emissions from the oil and natural gas industry and clarify permitting requirements. The proposed rule would update new source performance standards to set methane and VOC requirements for additional new and modified sources in the oil and gas industry. In addition, the proposed rule would update draft control techniques guidelines for reducing VOC emissions from existing oil and gas sources in certain ozone nonattainment areas and states in the ozone transport region.

Independent Petroleum Association of America (IPAA): U.S. Oil, Gas Producers Call Methane Regs ‘Costly’ with ‘Few Environmental Benefits’

IPAA President and CEO Barry Russell said: “Independent oil and natural gas producers drill 90% of the nation’s wells. The Administration is proposing a costly and complicated regulatory program for few environmental benefits. The unnecessary costs and added uncertainty resulting from the Administration’s proposals could inflict more pain on the men and women who work in the oil and gas industry – at a time when market forces are already creating economic challenges.

“EPA’s additional regulatory scheme is not needed to meet the goals set in the President’s Climate Action plan for the exploration and production segment. According to EPA data, Clean Air Act (CAA) regulations will achieve the Administration’s Climate Action Plan goal of reducing methane emissions 40% to 45% below 2012 levels by 2025.

“There are over one million existing oil and natural gas wells in the United States. None of these wells individually is a major greenhouse gas emitter. Oil and natural gas exploration and production methane emissions, in the context of all U.S. greenhouse gas emissions, are small and declining. The oil and natural gas exploration and production sector accounts for 1.07% of total U.S. greenhouse gas emissions. In fact, EPA’s own data show that methane emissions from hydraulic fracturing are already declining despite rising production levels.

“The Administration could have worked with industry to develop a less burdensome and more cost-effective emission reduction program such as the Administration chose to do with the agriculture industry. For the agriculture industry – which accounts for more than triple the amount of methane emissions as the oil and natural gas exploration and production sector – EPA determined that a voluntary program was sufficient to achieve emission reductions.”

American Petroleum Institute: Additional oil and gas regulations unnecessary for reducing emissions

EPA’s proposal for additional methane regulations on oil and gas wells and transmission are duplicative, costly, and undermine America’s competitiveness, API said.

The industry has already led the significant reduction in methane through innovation and existing regulations, according to API President and CEO Jack Gerard.

“The oil and gas industry is leading the charge in reducing methane,” Gerard said. “The last thing we need is more duplicative and costly regulation that could increase the cost of energy for Americans. Even as oil and natural gas production has surged, methane emissions from hydraulically fractured natural gas wells have fallen nearly 79% since 2005, and CO2 emissions are down to 27-year lows. This is due to industry leadership and significant investments in new technologies.”

EPA’s own analysis shows that methane emissions from hydraulically fractured natural gas wells have fallen dramatically. Total methane emissions from natural gas systems are down 11% since 2005 – a direct result of industry innovation at the same time production has increased significantly, according to API.

“API supports a common sense regulatory approach that builds on cost-effective controls already required by EPA for new equipment,” Gerard said. “Combined with smart, voluntary efforts for existing sources, this approach will continue to lower methane emissions. To avoid undermining American competitiveness, we urge the EPA to coordinate its efforts and not add duplicative rules.”

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