On January 14, 2015, the Obama administration roughly outlined what its next plan is for curbing global warming. This announcement came with no surprises since the release of Quad O back in 2011. The focus was on methane leaks from oil and gas production sites and to build on “commonsense standards” of methane and VOC emissions. Quad O (60.5400) already addresses leaks from affected natural gas processing plants, but there is a strong push to do the same with production site leaks.
Existing production:
As of now, the plan excludes existing oil and gas wells; however, the EPA is obligated to reduce methane emissions from existing sources per Section 111(b) of the Clean Air Act.
In 2012, New York Attorney General Eric Schneiderman threatened to sue the federal government for not regulating methane. He said it was “essential that the EPA also act on its responsibility under the Clean Air Act to regulate methane emissions from existing sources.” It appears this administration has been hearing what the oil and gas industry is saying by not including existing sites in new regulations. Many producers feel that to do so, would create a financial burden too heavy to carry.
Effects of methane leaks:
These leaks that are currently overlooked by regulators will erase any benefit of using natural gas over coal. EPA research found that methane leaks from oil and gas could be worse for the climate than coal if nothing is done to stop it. This same study says that while methane only accounts for 10% greenhouse gas emissions it is 25 times more absorbent than carbon dioxide.
Hopefully we will have more answers soon on what this plan really means for our industry. The administration said it will have more details out by this spring and proposed rules by this Summer. We will have to see.
