On Methane Leaks, Obama to Trump Administration Rules Illustrate Fundamental Priority Shift

Seth Johnson
Associate Editor
Loyola University Chicago School of Law, JD 2020

The Trump administration recently delivered a one-two punch to late Obama administration environmental regulations designed to curb the release of methane gas into the atmosphere while simultaneously encouraging its capture for sale. Two Obama era regulations were modified. The first, from the Department of the Interior, was effectively abrogated, while the other stemming from the Environmental Protection Agency (“EPA)” is expected to retain only a fraction of its original force. Environmental groups have already responded to the repeal of the department of interior regulation with a lawsuit in federal court. Methane gas pollution became a greater concern in recent years as the production and use of natural gas as an energy source continues to increase. Proponents of earlier regulations point to methane’s potent contribution to the greenhouse effect, while critics argued the regulations were unnecessary given the natural gas industry’s own efforts and incentives to reduce leaks and capture as much usable gas as possible.

Venting and flaring

Methane primarily enters the atmosphere during the production of oil and natural gas through a process known as venting. During venting, natural gases including methane are released from an oil or natural gas well. This can occur intentionally for safety and maintenance purposes, or as a result of waste. Flaring occurs when escaping gases are intentionally combusted. Though this process still releases carbon dioxide, it tends to fully combust methane, which is a much more potent greenhouse gas.

Obama administration regulations

The more extensive rule that the Trump administration nullified last month was promulgated by the Department of the Interior through the Bureau of Land Management. The regulation applied to oil and natural gas producers operating on public and Indian-owned lands. Under the rule, affected operators were required to reduce the amount of vented gas through a variety of measures. Operators could combust more of the gas through flaring it, and they were required to adopt better equipment to prevent unintentional leaks. These methods would result in operators capturing more gas, which could then be sold. Regarding flaring, where the Bureau of Land management found that an operator burned more gas than necessary, it would be assessed royalties. The EPA regulations introduced in 2015 required better monitoring and reporting of methane leaks, as well as stricter requirements for workers.

Trump effectively repeals

The administration announced in February that it intended to modify the Department of Interior regulations. The administration cited reducing costs to oil and natural gas producers, as well as a desire to harmonize federal regulatory policy with existing state regulations, which constitute a larger share of regulations imposed on producers. Oil and natural gas producers claimed that the cost of compliance with the earlier rule would have exceeded any savings derived from more sellable gas. On Indian-owned lands, the regulations may have taken many small wells out of business as many operators there were likely to be unable to afford the costs of compliance. While the administration’s change gutted the department of interior rules, it mostly reduced, rather than totally eliminated the requirements of the earlier EPA rule. The worker qualification provisions were reduced, as were the monitoring and reporting requirements. Operators are now allowed more time to conduct repairs without being penalized. In a nod to the administration’s stated goals of increased federalism, the new rule allows operators to substitute the regulatory requirements of the state in which the federal or tribal land lies in place of EPA rules. The administration argues that the change will save hundreds of millions of dollars for operators, even though emissions are almost certain to increase.

State rules and industry standards

While federal rules ease, some states maintain more stringent rules for gas releases. California and Colorado impose strident rules on methane emissions from oil and natural gas production, while Wyoming is currently considering imposing a requirement of regular inspections that the Obama EPA rule imposed. This past September, when the Trump administration rolled out its revisions, Pennsylvania announced that it was preparing new regulations for oil and natural gas wells to reduce emissions. In New Mexico, the EPA recently announced that methane emissions in two of the state’s highest natural gas and oil producing regions decreased from 2016 to 2017. Environmentalists disputed the data, which they say too narrowly center on natural gas mining and not oil production or processing of either product. Industry proponents argued that the apparent decrease in emissions in spite of an overall increase in the amount of natural gas mined proves that the Obama regulations were unnecessary. Industry leaders also pointed to longer trends, with some data showing that methane emissions from production decreased fourteen-percent since 1990, while production increased fifty-percent in the same time span.

Legal challenges

The same day the Trump administration finalized its new Department of Interior regulation, the Sierra Club and various other environmentalist groups filed a lawsuit seeking a declaratory judgment that the rule change is in violation of federal statutes, and an order completely vacating the new regulation and restoring the Obama rule in its entirety. The plaintiffs allege that the Obama regulation was authorized by federal statutes mandating that the government take measures to prevent waste. The lawsuit argues that the Trump administration’s new rule fails to do this because it defines waste solely in terms of potential harms to the profits of oil and gas producers, rather than also considering broader economic and environmental harms. The suit further alleges that the effective repeal failed to follow the proper procedure under the Administrative Procedure Act for a rule change. If the administration and oil producers are to be believed, improving industry standards may prove the prior regulations redundant. If environmentalists’ concerns are borne out, the repeal may have dire consequences for the environment.