Good news! Despite industry opposition, earlier this month the U.S. Environmental Protection Agency (EPA) went ahead and issued a rule that requires the oil and gas industry to join EPA's Greenhouse Gas Reporting Program--just like other major polluters. Producers will have to begin measuring their emissions in 2011 and reporting them in 2012.
Last month, I blogged about how oil and gas producers were opposed to federal regulations that would require them to report their annual greenhouse gas emissions to EPA.
They opposed these regulations, even though they also claim to already be successfully measuring these emissions, were given a one-year delay in complying by EPA, and can make money by capturing these emissions.
NRDC was very involved in providing public comment to the EPA on the substance of this rule, and we are pleased that EPA agreed with some of the points we made about how best to measure the greenhouse gas emissions from this industry.
What’s good about this new rule? EPA requires a comprehensive look at the industry’s emissions by requiring reporting from all equipment under common ownership or common control in a geographic area, known in the oil and gas world as a “basin” (such as the Los Angeles Basin, Denver-Julesburg Basin, etc). A comprehensive approach is critical to get accurate information on the greenhouse gas emissions from this industry.
EPA also included the emissions from contractors and portable equipment. This is essential, because the oil and gas industry outsources A LOT of its work to contractors and subcontractors, including drilling, hydraulic fracturing, waste management, pipeline construction, and more. While we are disappointed that the EPA exempted some sources from reporting pending additional analysis, we are hopeful that they will be included at some point down the road.
EPA included offshore operations in the reporting requirement, although it limited the reporting requirement to emissions from platforms and equipment physically attached to a platform, exempting support vessels and mobile offshore drilling units. Again, we hope these will be included at a later date.
There are a few provisions of the new rule that concern us – the exemption of certain equipment and the thresholds allow oil and gas producers to avoid reporting some emissions if they seem small, even if they would cumulatively add up to a lot. But we like how EPA provided for estimating emissions and collecting data, and overall we give this new rule a big “thumbs up!”
This new rule is essential because there is currently too much uncertainty about the magnitude of greenhouse gas emissions from the oil and gas industry. Some experts say the emissions could be twice as much as is currently thought. The industry emits a lot of methane during the exploration for and product of oil and natural gas.
The upside is that these emissions can be prevented, and the methane captured, which is a win-win for the environment and for the bottom line of companies that make money by selling methane. EPA's Natural Gas Star program makes clear all the solutions and the economic benefits. Methane is a very potent greenhouse gas and just venting it into the air, when we know such emissions can be prevented, is an inexcusable waste of a natural resource and threat to the climate. We look forward to seeing the reports from the oil and gas industry.
Thanks to Susan Harvey for her expert analysis of the new rule.