Customer Logins

Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.

Customer Logins

US energy trade groups show support for nationwide methane regulation

26 January 2021 Kevin Adler

With the debut of a US administration that has put climate change near the top of its agenda, energy trade groups have started to indicate they support federal policies implemented by President Barack Obama to regulate methane emissions, and watered down or canceled by President Donald Trump.

In January, the American Petroleum Institute, Edison Electric Institute, Interstate Natural Gas Association of America (INGAA), and the US Chamber of Commerce each issued statements that they support a national program to regulate methane emissions, rather than the current state-by-state approach. In the case of INGAA, the announcement is a continuation of prior policy statements, but for the other groups the announcements represent a change in position.

INGAA, which represents operators of interstate gas pipelines, issued its "2021 Vision Forward: Our Clean Energy Commitments" on 26 January, a set of principles that define the role of gas as critical to US and global energy needs for the next 30 years, but also reinforced gas as a resource enabling the transition to a net-zero energy future. In a briefing to discuss the principles, INGAA's leaders said they support "cost effective" regulations that bring "certainty" to the gas industry.

"INGAA has expressed concern about the lack of predictability on methane regulations for many years," said Amy Andryszak, president and CEO. "From that perspective, we would be open to new [federal] regulations, but they need to be safe, sound, and avoid unintended consequences that would affect system reliability. And we would want the rules to allow companies [to] have appropriate flexibility to minimize emissions from their own operations."

When the US Environmental Protection Agency (EPA) issued the New Source Performance Standards for oil and gas producers in 2016, which were designed to reduce methane emissions by about 40%, INGAA sued over the regulation. But Sandra Snyder, vice president and senior regulatory attorney for INGAA, explained that the association did not challenge EPA's authority to regulate methane; it just objected to one part of the regulation related to the 30-day period required to repair leaks on pipelines. Given the length of time needed to obtain parts such as new valves to repair a leak, INGAA wants a longer period for repairs, said Snyder, and then "we would support the [Obama] regulation as written."

Changes afoot

The Biden administration has been encouraged by environmental and public health organizations to return to and implement those New Source Performance Standards. At the Trump administration's request, a federal court stayed the regulations, while EPA revised them. New rules were finalized in August 2020, to the disapproval of environmental groups and even some oil companies such as Shell.

Biden also could revive 2016 methane limits the US Bureau of Land Management issued; its Methane and Waste Prevention Rule for oil and gas operations on federal lands. Those regulations were challenged by numerous industry trade groups, attorneys general in oil- and gas-producing states, and some individual companies. The Trump administration opposed those rules as well, and a federal court vacated those rules in October 2020.

But it's a new policy regime in Washington, DC. "The message is clear," said IHS Markit in an oil market briefing on 21 January. "US politics and policies are moving rapidly away from those pursued by the Trump administration over the past four years. The effects are likely to be extensive and profound, including in the world of energy, which is now at a pivotal moment in its transition to cleaner power and fuels."

The API seems to be seizing the moment with its "a new position" on methane regulations, as outlined by CEO Mike Sommers during the association's annual "State of American Energy" presentation, held virtually on 13 January. "We believe that this administration is going to want our industry at the table to make sure that they can put forward the most effective regulation possible in this space that can actually survive judicial scrutiny," he said. API met with Biden's transition team on the topic, he said.

Like INGAA, API wants to see rules that allow for new technology to be implemented in a "cost-effective" way, Sommers said. API has been a leader in the voluntary methane-reduction program known as the Environmental Partnership and is stepping up its work with that coalition to share best practices to reduce flaring of methane. Methane emissions in five of the largest US producing regions were down nearly 70% between 2011 and 2019, thanks largely to industry's voluntary programs, Sommers added.

However, API's new position on methane was apparently not enough to satisfy Total, as the French oil company announced on 15 January it was leaving API over several policy differences, including what Total called API's "support for the [Trump] rollback of US regulation on methane emissions."

Meanwhile, the EEI, which represents US investor-owned electric utilities, announced on 22 January that it supports Biden's return to the Paris Climate Treaty, electrification of the transportation sector, and "EPA regulation of methane emissions throughout the gas supply chain for new and existing sources."

Calling the switch from coal-fired power to gas "the single most effective tool over the past decade for reducing carbon emissions," EEI said gas was established as an affordable, reliable fuel source. "Strong and cost-effective federal regulations on methane emissions across the value chain are essential to ensuring the continued availability of natural gas as a 24/7 on-demand energy source," it said.

Also in January, EEI and the American Gas Association circulated their draft "Natural Gas Sustainability Initiative," a voluntary program aimed at reducing the gas industry's methane intensity (methane emissions per unit of gas output) from production through gathering and boosting; processing; transmission and storage; and distribution. The initiative lays out test procedures and other protocols for reducing and tracking methane emissions, as well as how to provide greater transparency in reporting emissions. The two trade groups say that when the protocol is finalized, they will encourage gas distributors and buyers to incorporate it into their long-term contracts.

The US Chamber of Commerce is apparently onboard on methane, too, as it issued what it called "an updated position statement" on 19 January. "The Chamber supports the continued reductions of methane emissions, both voluntarily and by direct regulation under the Clean Air Act," it said. "Such regulation must be smart and follow the appropriate process under the Clean Air Act for regulating methane as a pollutant and not be duplicative of existing regulations while preserving state regulatory programs. Additionally, regulations must encourage innovative solutions by not prescribing technologies and be solely focused on the detection and reduction of emissions in the US."

Posted 26 January 2021 by Kevin Adler, Editor, Climate & Sustainability Group, IHS Markit

Explore

Follow Us

Filter Sort