ESG & Industry Updates

Everything Old is New Again - Methane Regulations on the Agenda

Posted by Kelly Burke on Nov 4, 2021 12:21:54 PM

Methanemolecule

The Biden Administration has announced new methane regulations from the COP26 Climate Summit in Glasgow, Scotland this week. Estimates are that the new regulations will affect  up to 75% of the methane emissions in the United States. Regulations will apply largely to the Oil & Gas industry, specifically addressing “flaring” (purposeful venting) during production and leaks across the system infrastructure.

Methane is responsible for up to 30% of global warming, according to the UN Environment Program, and is estimated to be 25 times more potent than Carbon Dioxide. In recent years this had led to more focus on methane (versus Carbon) emissions, as because of the potency, decreases in methane are much more likely to have a faster and more meaningful impact on slowing Climate Change.

If this sounds familiar, it’s likely because in 2014 the Obama Administration announced similar Methane regulation controls (you can get a refresher here: Methane & Consumers Giving Nat Gas Headaches ) Those rules were enacted in 2016 and subsequently relaxed by the Trump Admin, before being reinstated by the Biden Admin. Hard to keep track of.

The oil & gas industry is responsible for an estimated 30% of methane emissions domestically, and the new rules are expected to reduce emissions from equipment, production sites, and covered areas by up to 75%. In tandem with the expanded EPA regulations, the DOT’s Pipeline & Hazmat Safety Administration is implementing the PIPES act which upgrades and expands existing pipeline setups to cut methane leakage. Other targets of emission reduction are landfills, and enhancing the abandoned mine & well closure program – orphaned mines have been an oft ignored thorn in the side of the federal government & EPA for decades, abandoned mines often leak methane and other gasses, or pollute their areas (For a refresher on that, check this article out: Accidents Happen: EPA Spill Highlights Difficulty of Mine Decontamination)

In an odd continuation of an ongoing trend, the new methane regulations will be “voluntary, incentive-based” changes in the Agricultural sector. This would seem to clash with the global concern over agriculture produced emissions, particularly those from concentrated feed lot (CAFO) based livestock production. The agricultural sector produces emissions comparable with the entire transportation sector (including airplanes) globally (14-18% for both), and agricultural emissions have increased approximately 12% since 1990, which is in contrast to the focus on emission reduction we have seen implemented (in a mandatory fashion) in other sectors. In terms of emissions, the US Agricultural sector produced approximately 698 million metric tons of CO2 equivalent in 2018, a staggering 36.2% of which was in the form of methane.

One of the items regarding agricultural emission control in the White House Proposal is investment in methane reducing practices like “alternative manure management systems”. Presumably (hopefully) this would be an investment in technology like the anaerobic digester technology we have seen make an appearance in MA, where dairy farmers have been diverting manure & food waste to be upcycled into energy. (More on that here: Mass Dairy Farmers Use Food Waste & Manure to Generate Renewable Energy)

So while we will have to wait to see how the new proposals take shape in actual regulation and enforcement, it’s worth noting that according to reports, the American Petroleum Institute (API) appears to support the proposal, with a response indicating they were “committed” to “continued progress” on methane emission reduction. 2020 methane emissions by oil & gas were down 10 percent versus 2019, but that was as a result of a collapse in production, not because of corrective action. The IEA estimates that 10% of methane could be reduced “at no perceptible cost” and where the US (along with Russia) is one of the world’s largest emitters, the new Biden regulations are an attempt to remedy that and push forward progress on a broader Climate agenda.

Stay Tuned!

 

 

 

 

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Topics: methane, climate change, climate change summit, Biden Administration

Senate Strikes Down Clean Power Provisions Ahead Climate Change Summit

Posted by Ed Burke on Nov 18, 2015 4:24:41 PM

Image of the U.S. Capital Building

Yesterday, the Senate voted to block President Obama’s Clean Power Plan with respect to the new EPA regulations on Power Plant Emissions announced in August, as well as blocking the moratorium on new Coal Fired Plant building. (For a refresher on those regulations, read this “Obama, EPA Announce First-Ever Federal Limits on Power Plant Emissions” )

The Senate challenged the regulations under the somewhat obscure Congressional Review Act which allows the legislature to vote to block enactment of new federal regulations as long as they do so within 60 days of publication. It was a fairly clever move, given the rules came out in August, but because technically they were not published until October, they were fair game.

The rationale behind using the Congressional Review Act cited was that nearly half of the States are suing the EPA over these specific parts of the Clean Power Plan, and several are vowing to refuse to comply pending said lawsuits.

The Review Act also is not subject to filibuster and only requires a simple majority, not 60 votes – so the final count of 52-46 (on both the emissions regulation vote, and the moratorium vote) was sufficient to block the regulations. That is, until it hits the President’s desk, where it will immediately be vetoed. It’s extremely unlikely that a veto could be overridden, so essentially this legislation will drop off in the same fashion the Keystone Bill did earlier this year.

The Power Plant portion of the multiple Climate Change resolutions proposed by the Administration is essentially the centerpiece to the overall plan. The timing of the vote is not advantageous for the Administration because, as we’ve mentioned, the Climate Change Summit is to be held in France a few days from now.

 Essentially, the regulations are critical for the U.S. if a broad Climate Change agreement is to be secured at the conference, which is really the entire point of it – to broker a global agreement.  Without being able to cite massive overhauls and regulation of emissions on a broad scale, the U.S. has much less of an ability to point to what we are doing as a model for a global pact.  

 

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Topics: EPA, obama, clean power plan, climate change summit

Ahead of the Climate Change Summit, Here's Where We Are on Regulations

Posted by Ed Burke on Nov 16, 2015 2:39:21 PM

Image of Climate Change in a dictionary

Despite the horrific ISIS terrorist attacks in Paris this past weekend and the fact that France will still officially be in a State of Emergency, as declared by French President Hollande, the Global Climate Change Council Meeting is still slated to take place in Paris on November 20th

 Some are arguing that at the very least the venue ought to change, others that it should be postponed, and still others that the best thing we can do in response to terrorist attacks is carry on with scheduled events versus cancelling  in fear.

 Regardless of anyone’s position, at the moment, the Council meeting is a go.

 We’re likely to hear new proposals from both the US, and several European countries on comprehensive changes. So before new policies or talking points are rolled out, it’s a good time to recap the steps the United States has taken policy wise to combat Climate Change over the past year through EPA proposals and regulations.

 I wrote a “roundup” of major EPA rulings and proposals from 2015 aimed at combatting Climate Change and how they may impact the industry for Fuel Marketers News Magazine recently - You can read the article in PDF format here: 

"Climate Change: Regulations Roundup"

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Topics: EPA, climate change, climate change summit

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