Aug 14, 2020 - Energy & Environment
The many divisions over Trump's methane rollback
EPA's decision to cut regulation of methane is laying bare an oil-and-gas industry divide and setting the stage for political battles this fall and beyond.
Why it matters: Methane is an extremely powerful greenhouse gas and the industry is a key emissions source.
Driving the news: The agency yesterday finalized rules that roll back requirements on curbing leaks from oil-and-gas wells and related infrastructure.
- EPA boss Andrew Wheeler said the industry is moving to capture methane without "burdensome" regulations.
- Environmentalists called it a dangerous decision that hinders efforts to fight global warming.
The intrigue: Here are a few takeaways from the move...
1. There's a rift between industry giants and independent companies.
- Giants like BP and Shell attacked the move, while trade groups including the Independent Petroleum Association of America and Western Energy Alliance embraced it.
- Quick take: There are differing motivations here. Multinational giants have more resources to comply and have already pledged emissions curbs, so it's even a competitive edge.
- And the majors — especially the European-headquartered ones — have other incentives too as they seek to tout climate efforts and maintain their "social license" to operate.
2. The regulation's architecture could affect future rulemakings on climate change.
- The agency is using the rules to "set a higher bar for regulating other emissions that contribute to climate change," the Wall Street Journal reports.
3. It can't be untethered from the 2020 elections and their aftermath.
- Wheeler announced the rules in Pennsylvania, a big swing state Donald Trump carried in 2016 and a huge natural gas producer.
- Joe Biden criticized the rules. And so did several senior congressional Democrats, a sign that they could seek to overturn them using the Congressional Review Act if Democrats control Washington next year.
- The CRA allows Congress and a willing president to nullify regulations finalized late in a predecessor's term with special resolutions that are immune from filibusters.
4. EPA's action also has transatlantic implications.
- Per Bloomberg, the rules "may provoke a backlash in Europe, where regulators are developing a methane strategy and eyeing tougher scrutiny of the carbon footprint of energy imports."
- Their piece cites a recent note from ClearView Energy Partners, which says European officials could back "more rigid regulatory protocols to compensate for a continuing U.S. federal deregulatory posture."