Oct 31, 2017

Trump EPA: Obama's EPA had legal basis for methane rule

President Obama had a strong legal case to limit emissions of methane, a potent greenhouse gas, from new oil and gas wells, according to a senior Environmental Protection Agency official.

Why it matters: President Trump's EPA is trying to repeal that methane regulation, so the official's comment suggest the agency could eventually issue a replacement rule, which itself would trigger a legal opening to regulate hundreds of thousands of existing oil and gas wells. As with many other regulations, the Trump administration is grappling with whether to repeal only or repeal and replace this particular methane rule.

Gritty details: A senior EPA official told Axios a 2007 Supreme Court case and a subsequent scientific finding Obama's EPA issued in 2009 that found greenhouse gas emissions, including methane, endanger public health and welfare indicate "a level of responsibility for the agency to consider" as it moves forward repealing the Obama-era methane rule.

EPA is preparing to release as soon as this week a proposal explaining the legal rationale for why it's seeking a two-year delay of the regulation that Obama had issued. That proposal doesn't make a commitment either way, the official said.

"There is a justification for it [methane rule for new wells] being on the books," the official continued. There's a very extensive record, and any change in approach or application will require an equally robust record."

Oil and natural gas trade groups, including the American Petroleum Institute, are opposed to a direct regulation on methane emissions, because that move would legally trigger an eventual regulation of existing oil and gas wells. Such a rule would affect hundreds of thousands of wells across the U.S.

"That's really the concern about methane being regulated for new sources," said Kyle Isakower, vice president for Regulatory and Economic Policy at API. "It triggers the existing source standard, which would put significant cost on hundreds of thousands of wells, many that are low-producing."

Yes, but: Not all oil and gas companies support trade groups' positions. Many companies want more, and some even want a direct regulation of methane on new and existing sources. But the companies that want less regulation want it more than the companies that want more regulation.

"If it would have been up to us, we would have built a methane rule for existing sources," said one oil industry executive. "We advocated that within our trade association, let's write a rule. Our position did not prevail. We understand why, and we don't necessarily strongly disagree with the approach API and others have taken."

The senior EPA official acknowledged the difference in positions within the oil and gas industry, and indicated any eventual regulation on methane emissions would try to address the fact that some companies have already spent money to comply with Obama's methane rule.

"I do understand and it's important for us to recognize in some regulatory way those who have made investments," the EPA official said. "There's a way the agency can give credit where credit is due when perpetuating a regulatory action going forward. I don't know fully what that looks like, but I know what the idea is in concept."

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