Biden races to reverse Trump on methane

Source: By Jean Chemnick, E&E News reporter • Posted: Sunday, January 24, 2021

EPA is expected to propose regulations by September that would set new methane standards for future and existing oil and gas infrastructure — including segments of the supply chain the Trump administration tried to exempt.

The executive order President Biden signed Wednesday night directed the agency to review standards that EPA finalized last year. Those 2020 standards require leak detection and repair for new and modified oil and gas development.

But Biden’s order goes on to specify that EPA must propose additional standards — also by September — for controlling methane for existing oil and gas infrastructure, “including the exploration and production, transmission, processing, and storage segments.”

The rules the Trump EPA finalized in August covered only new and modified production and processing operations (Climatewire, Aug. 14, 2020). They replaced Obama-era rules that regulated a broader swath of the oil and gas supply chain.

As a rationale, the Trump administration argued that the Obama EPA had failed to make a necessary finding that oil and gas was a “significant” contributor of planet-warming methane.

Instead, the Trump EPA’s replacement rule focused on volatile organic compounds — an ozone precursor that is present largely in upstream oil and gas operations but dissipates before fuel is transmitted and stored. Methane is captured from wellheads as a byproduct of controlling VOCs, but the Trump VOC rule effectively created a carve-out that left transmission and storage unregulated.

Biden makes clear that his administration would take a more holistic approach to regulating the industry — including the midstream segments the Trump EPA tried to exempt — by specifying that those sources would be covered by the proposal for existing oil and gas operations.

The Clean Air Act requires rules for new sources in a set category as a prerequisite for regulating existing sources. So EPA couldn’t legally regulate existing sources in the transmission and storage sectors without revising the new source standard to include those sources.

EPA last year used its new source rule to argue that regulations for existing oil and gas leakage could never be written, because existing sources are not significant contributors to VOCs, and EPA had not written a rule controlling methane from new sources.

But environmentalists predicted at the time that the justification would not create an insurmountable obstacle to a new administration regulating methane from the sector. Biden’s Wednesday night order shows his administration agrees.

Jay Duffy, an attorney with the Clean Air Task Force, said the Trump EPA’s gambit to construct regulatory barriers around what sectors make a “significant contribution” meriting regulation would be unsuccessful in part because the agency failed to give adequate notice before finalizing the language. That was true in last year’s oil and gas rule, he said, and was true of the new power plant rule EPA finalized a week before Trump left office.

CATF and other groups submitted a petition for reconsideration of the methane rule revision and planned to do the same for the power plant rule, he said.

“Not only were the rules improper procedurally but they were also unreasonable, so we think the Biden administration can move forward with regulating greenhouse gases from many sectors — and need to, if they’re going to meet their climate goals,” he said.

Matt Watson, the Environmental Defense Fund’s energy lead in North America, said regulating methane is critical because it is many times more climate-forcing in the short term than carbon dioxide.

“Because it’s such a potent GHG and is responsible for a quarter of the warming we’re currently experiencing, reducing methane is a way to immediately slow the growth in the rate of warming,” he said. “It’s basically a way of quickly taking your foot off the gas pedal.”

Environmental groups such as EDF want to see the Biden EPA tighten requirements for monitoring and repair even beyond the rule EPA finalized in 2016, with requirements for existing sources that are substantially similar to those for new sources.

They say that while the federal government has lagged in regulating methane, evidence has continued to accumulate that shows that deep emissions cuts are not only technologically feasible but cost-effective. Indeed, oil majors and many independents already have taken stronger actions to find and limit methane leakage than the Obama EPA required in its 2016 rule.

But while industry leaders long ago embraced best practices and support for federal regulation of methane as a way to even the playing field, trade groups including the American Petroleum Institute have bowed to demands from smaller independent producers opposed to federal methane standards.

That changed Wednesday when API expressed a willingness to consider backing methane regulation under Biden. API CEO Mike Sommers in a blog post yesterday called direct federal regulation of methane from new and existing sources “key to public confidence in our industry’s performance as we engage with the new administration.” He added that API has “signaled this to President Biden’s team.”

“Specifically, as providers of America’s leading energy sources, we should be included in discussions to shape a regulatory regime that’s sensible, workable and promotes further technological advances and innovation,” he said.

Watson said API’s reversal was nothing to celebrate.

“I think API sees the writing on the wall, and this sudden spiritual conversion they seem to have had is them trying to get a seat at the table after spending the last decade doing everything possible to oppose and tear down methane regulation,” he said.

Biden’s same executive order also set timelines for agencies to revise the Trump administration’s rollback of Obama-era vehicle emissions standards, promulgate efficiency rules for buildings and appliances, and ratchet up controls on hazardous air pollutants.

It also shines new light on the role Biden’s domestic climate adviser, Gina McCarthy, will play at the White House.

Within a month of the order’s signing, agency heads are directed to provide the White House Office of Management and Budget, which oversees interagency review of rulemakings, with a preliminary list of rules they plan to complete this year on climate, the environment and environmental justice and that will require review.

A more complete list of rulemakings up for review that are planned for Biden’s first term is due to OMB 90 days after Inauguration Day. McCarthy is to receive both lists, indicating that part of her job will be to shepherd these rules through the review process.