As Trump looks to roll back methane regulation, oil and gas industry feels divided – By PBS Newshour Staff (PBS Newshour) / Aug 29 2019
In an effort to boost production of oil and natural gas, the Trump administration is planning to relax rules regarding the release of methane, a highly potent greenhouse gas. William Brangham reports and talks to The Wall Street Journal’s Timothy Puko about what higher levels of methane mean for the environment, how technology can prevent leaks of the gas and a “big divide” within the industry.
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Judy Woodruff:
In an effort to boost oil and natural gas production, the Trump administration is planning to roll back rules regarding the release of the highly potent greenhouse gas methane.
As William Brangham reports, this is the latest move to dial back environmental rules put in place by the Obama administration.
William Brangham:
That’s right, Judy.
These rules were first put in place because methane is one of the most potent greenhouse gases, many times more potent than carbon dioxide at trapping heat in the atmosphere. When oil and gas is produced and shipped and stored, a lot of methane leaks out, which then makes climate change worse.
The Environmental Protection Agency now argues those rules about limiting methane leaks are illegal, too costly and that they don’t do very much to protect the climate.
Timothy Puko Of The Wall Street Journal first broke the story of this proposed change. And he joins me now.
Welcome to the “NewsHour.”
Timothy Puko:
Thank you for having me.
William Brangham:
So, environmental groups, a lot of leading Democrats are quite furious about this proposed change.
What are they arguing?
Timothy Puko:
They’re arguing that, because of climate change, that we really need these rules.
Methane, as you mentioned, is incredibly potent. The oil and gas industry is the leading industrial source of it. And they were intended to be part of a three-pronged attack from the Obama administration: Take care of emissions from cars. Take care of emissions from power plants, or at least limit them, and then the oil and gas sector was next.
That was seen as the other big emitter that could use some tightening up.
William Brangham:
And the rules, as they were written by the Obama administration, required the industry to do what about methane leaks?
Timothy Puko:
More inspections, adding newer technology to — primarily, the issue was, contain these leaks. Make sure you know when leaks happen, so monitoring systems, and then have better technology there to make sure that gas doesn’t escape.
William Brangham:
I touched on the sort of litany of rationales the Trump administration has put forward as to why they want to get rid of these rules.
What is their position on this?
Timothy Puko:
Well, climate, one, not a priority for this administration. Certainly, President Trump has made his feelings on that very clear.
And that has empowered a lot of people within the administration, not just at EPA, but other departments, too, who feel that the prior administration had gone too far, had used the Clean Air Act to address climate in ways that it was never intended to be used.
William Brangham:
Is there evidence that these rules actually did what they were intended to do, meaning, if we know that methane is a problem, we don’t want to let it leak out, did these rules stop those leaks?
Timothy Puko:
Technology would certainly help. Increased inspections would certainly help.
I think the big question is, what’s reasonable? And the oil and gas industry felt that, in many cases, these rules were not reasonable, that they asked too much, that they might be restrictive. They might prevent the industry from innovating and creating more effective technology.
Ultimately, we don’t even know the answer to your question, because, like many climate policies from the Obama administration, this was in limbo. It wasn’t something that had taken effect. They didn’t finalize it until 2016.
There were court challenges. And, then, ultimately, the Trump administration takes over, and they have their own ideas. So that — basically, there was a transitioning happening before those rules could ever really make an impact.
William Brangham:
One of the most interesting things in your reporting was that this wasn’t a unanimous industry opposition to these rules. Big companies wanted to keep them in place. Smaller didn’t.
Explain why that occurred.
Timothy Puko:
The industry is really divided.
And the larger companies that have more capital to address these things have, quite frankly, in many cases an advantage if there are more regulations governing the industry. But even beyond that, they’re realizing, they have realized, they have made giant investments that are climate-related into natural gas in particular.
It’s a cleaner fuel. As long as you are not leaking it, as long as you are not putting raw methane into the atmosphere, natural gas burns cleaner than — certainly than coal and oil. It produces many fewer emissions.
And so, you know, they have been able to market natural gas to governments and utilities all over the world. It’s a huge thing. It’s a huge business for them. The fear is that, if there are not strong government relations to regulate that, that bad actors can take over.
Or when times get tough and prices are lower, there isn’t as much of a profit motive for the industry to spend, to invest on the technology they need to capture this stuff.
So, Exxon, Shell, BP, they’re looking at it and saying, we’re trying sell this natural gas around the world. We want governments to believe that they can transition to it as a cleaner fuel. And we don’t want the run the risk that that gets undermined. We have to have a cop come in from the outside to make sure that everyone is playing by the same rules and keeping natural gas clean.
William Brangham:
Such an interesting dichotomy in the industry there.
Timothy Puko:
And you see — if I could say, you see that a lot. There are big divides right now on all sorts of issues between the large companies, the global majors, and then the midsized and smaller companies.
Those companies have less capital to spend. They want to produce and produce and produce. They, in many cases, have been the ones that have been most successful in the Permian and other shale plays.
They also have the ear of this administration. And so, in many cases, they’re there. They’re saying, no, our friends in the White House, make sure that the government is not in our way, that we’re not overburdened by costs and by rules that we have to follow. And they’re promising that they will police themselves and keep the drilling boom going full-tilt.
William Brangham:
Lastly, what are next steps here? I know these don’t go into effect right away. And legal challenges? What do you see?
Timothy Puko:
Absolutely.
Even before we get to legal challenges, 60 days of public comment. It will have to come back for administrative review. They’re aiming to get that finished and to get this finalized by 2020. It’s been very difficult for the administration to meet timelines like that.
And even if they were to get this finished while President Trump is still in office, as you allude to, there are going to be lawsuits. The environmental community wants tight regulations related to climate. They want climate issues to be addressed.
And they have launched — they have launched legal attacks on every rollback like this that the administration has done. Those are all still in the courts. And this one is likely to play out in the courts, if we get there.
William Brangham:
Timothy Puko of The Wall Street Journal, great reporting. Thank you.
Timothy Puko:
Great. Thank you.
