EPA looking at new mandates on methane

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WASHINGTON — The Environmental Protection Agency is considering a broad strategy to clamp down on methane emissions tied to oil and gas development, with a mix of both voluntary steps and regulatory mandates possible.

The Obama administration has previously said the agency will make a decision on whether new rules are needed this fall.

But EPA Administrator Gina McCarthy just gave a strong signal that the agency is poised to decide something is needed to combat methane emissions tied to oil and gas development. And, she suggested, the next step might not be regulation.

“There are lots of things we can do regulatorily under the Clean Air Act, and there are lots of things we can do to expand our voluntary programs,” McCarthy said, speaking to executives and analysts at the Barclays Energy-Power Conference in New York on Tuesday. “We are looking at what are the most cost-effective, targeted regulatory and/or voluntary initiatives that we may be able to put on the table that significantly takes a chunk out of the methane emissions from the oil and gas sector.”

Methane, the main component of natural gas, is about 30 times more potent as a greenhouse gas than carbon dioxide over 100 years, even though it dissipates much more quickly in the atmosphere. The Obama administration is taking aim at methane as part of its overall climate action plan.

McCarthy stressed that no decisions have been made on the next steps. The agency already released a series of white papers on methane leakage, and it has been soliciting input from stakeholders about the scale of the problem and the resources available to tackle it.

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McCarthy said she was encouraged that current technology already exists to stem leaks, including those tied to new oil wells, where methane can escape as part of the hydraulic fracturing process or when gas is vented or flared at the sites.

“We don’t need to innovate; what we need to do is commit,” McCarthy said. “We need to commit to getting the methane leaks out of the system, to capturing the product and delivering the benefits that consumers expect.”

McCarthy made a business case for capturing methane, stressing the economic opportunity in trapping the gas that might otherwise be vented and flared at oil wells.

“It’s a product that’s being wasted,” she said. “If that isn’t an opportunity waiting to happen, I don’t know what is. The less methane is leaked and gets away from you, the more profitable your business will be and the better it is for our families’ health, and we need to do more about it — something more than we are doing today.”

An existing EPA rule already requires companies to capture pollution from natural gas wells that are stimulated through hydraulic fracturing, a well completion process that involves pumping water, sand and chemicals deep underground.

That “green completions” mandate technically focuses on reining in smog-forming volatile organic compounds and other substances that can escape after a well is hydraulically fractured and before it begins producing natural gas. But trapping those VOCs also means capturing methane.

The EPA could decide to extend a similar requirement to oil wells.

“The further upstream you go, the more we recognize this (methane) is a traditional pollution problem,” McCarthy said. “A significant amount of volatile organic compounds and various air pollutants are released in the upstream oil and gas sector in a way that is unacceptable if there are cost-effective technologies that are available to recapture those.”

Other agencies are tackling methane too, including the Energy and Interior departments. At Interior, the Bureau of Land Management is considering new limits on venting and flaring at oil and gas production facilities on federal and Indian lands, even as it moves closer to imposing new mandates on hydraulic fracturing.

McCarthy, who several times noted the importance of the domestic oil and gas drilling boom, took pains to stress her desire to combat methane emissions in a way that balances health and business needs.

“Our challenge, this fall, is to put out a strategy that is engaging (and) a strategy that will continue the dialogue moving forward, but a strategy that will clearly articulate how we can most cost-effectively reduce VOCs and methane so we get the job done that the American people want to see us get done and ensure that oil and natural gas will continue to be a big factor in every state (and) every county in the most positive way we can make it. This is really about building a healthy industry.”

Jennifer Dlouhy

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