A coalition of 70 House Democrats – led by Raúl Grijalva of Arizona and Frank Pallone of New Jersey – sent a scathing letter to President Donald Trump last week that criticizes recent revisions of Obama-era oil and natural gas methane regulations. In the opening two paragraphs of the letter, the coalition claims that,
“For nearly two years, your administration has executed a strategy of ignoring threats to public health, abusing taxpayer resources, and undermining efforts to combat climate change. While these efforts have taken the form of multiple federal actions across many agencies, the recent proposed evisceration of methane emission controls by the Environmental Protection Agency (EPA) and Bureau of Land Management (BLM) will accomplish all three of these in one fell swoop.
“The EPA’s proposal to weaken methane leak inspection and repair requirements for oil and gas operations and BLM’s rule gutting measures designed to reduce methane venting, flaring and leaks from oil and gas operations on public lands will inflict tremendous harm on American citizens and on the air and water on which we all rely.”
Clearly driven more by politics than science, the letter is littered with misleading claims and characterizations that exaggerate potential environmental impacts and downplay the very real economic consequences the previous versions of the rules would have yielded.
Here are the most egregious claims made in the letter, followed by the facts.
CLAIM: “Between 2009 and 2015, oil and gas producers on public and Indian lands flared, vented and leaked 460 billion cubic feet of natural gas. … The U.S. Government Accountability Office has determined that taxpayers are losing as much as $23 million a year in lost royalty revenue from this wasted energy resource… Lost royalty revenue could have been used for critical education, health, and infrastructure programs…”
FACT: The Obama-era version of the BLM rule would have decreased oil production on federal lands, which in turn, would have led to a decrease in government revenue from oil production royalty payments far outweighing lost revenues from flaring.
This letter willfully ignores an Environmental Resources Management (ERM) analysis that found that full implementation of the Obama-era BLM venting and flaring rule could have resulted in 40 percent of oil wells on federal lands being shut in permanently because they would become uneconomical to operate. This is largely due to the fact that 73 percent of oil wells on federal lands are marginal producers.
A separate analysis from economist John Dunham found that 112.4 million barrels of oil would have been effectively shut in as result of the Obama-era rule. That oil would be worth roughly $8.3 billion at current oil prices. That translates to a loss of approximately $914 million in royalties – far outweighing the $23 million highlighted in this letter.
Realistically, even the Obama administration acknowledged the costs of its version of the venting and flaring rule would have far outweighed the benefits. As E&E News recently reported,
“Republicans in Congress and some members of the oil and gas industry fought the Obama rule, on the grounds that its costs outweigh the benefits. That’s true, even according to the previous administration’s own analyses — unless the climate impacts of releasing methane into the atmosphere are taken into consideration.”
Only by including its “Social Cost of Methane” estimate was the Obama administration able to claim that the rule’s benefits outweighed its costs. That estimate was not only flawed, but unlawful, considering the BLM does not have the authority to regulate air quality. Excluding the social cost estimate, the Obama-era rule estimates net costs of about $259 million – a figure that doesn’t even include the lost oil production royalty payments detailed earlier.
Further, federal law requires a Regulatory Impact Analysis be conducted to determine whether the costs of proposed federal regulations would be excessive. If the latter proves to be the case, an alternative is to be sought, which is what occurred when Trump administration correctly determined the Obama rule’s costs outweighed its benefits.
It is for these reasons that this letter’s claim that the Obama rule would have maximized taxpayer returns is disingenuous. The true objective appears to have been forcing operators to leave as much oil in the ground as possible by banning flaring, which is underscored by the fact that supporters of the Obama-era venting and flaring rule simultaneously blocked build-out of infrastructure that would have reduced the need for venting and flaring by providing a means to transport associated natural gas from the wellhead.
CLAIM: “Methane emissions from field production, which the EPA and BLM regulations were designed to address, are up 34 percent since 1990, with the growth in methane emissions from the natural gas sector is even outpacing the growth in natural gas production.”
FACT: Natural gas field production methane emissions have declined 10 percent since 2005 at the same time production has gone up 50 percent.
As the following chart from the latest EPA Greenhouse Gas Inventory shows, onshore natural gas production emissions have declined 10 percent since 2005, while overall natural gas system methane emissions have declined two percent during that time.
Only by including gathering and boosting station emissions are the authors of this letter able to make the claim that field production methane emissions are up 34 percent since 1990.
As EID has previously noted, the inclusion of gathering and boosting station emissions under the “production” category in recent EPA inventories is misleading, since gathering and boosting aren’t actually production-related. Recent gathering and boosting station emissions estimates – which make up more than 50 percent of total “production” emissions in recent years – have also been called into question.
More importantly, the above EPA chart shows total natural gas system emissions are down 15 percent since 1990. This is all-the-more notable considering EPA data show there are twice as many natural gas wells in production in the United States now than there were in 1990.
The most recent EPA data also show that overall methane emissions from petroleum systems have declined seven percent from 1990 levels, which the EPA states is “due primarily to decreases in tank emissions and associated gas venting.” There were also 8,000 more producing oil wells in 2016 than in 1990, according to EPA data.
With regard to venting and flaring methane emissions specifically, methane emissions declined 15 percent from 2013 to 2016. The EPA also recently downwardly revised its estimates of venting and flaring emissions for previous years, based on better data, finding emissions are up to 94 percent lower than previously estimated.
Despite the authors of this letter deliberately cherry-picking EPA datasets to present the most extreme and misleading representation of methane emissions possible, the fact remains that overall oil and natural gas system methane emissions have declined significantly over the past 28 years even as production has surged to record-high levels.
CLAIM: “As a result of the BLM’s new rule, federal regulation of methane emissions from public lands will largely revert to outdated measures that were in effect since 1979 and don’t take advantage of advances made in science, technology and the U.S. energy industry since then.”
FACT: The revised BLM rule allows the flexibility for states to implement their own versions of the Obama-era venting and flaring rule if they so choose.
The Trump administration’s revised BLM venting and flaring rule gives the seven states that are responsible for 99 percent of the oil produced on federal lands all the power in the world to implement their own versions of the Obama version if they so choose. Contrary to what proponents of the Obama-era BLM venting and flaring rule have claimed, not only do those states already have rules regulating venting and flaring on the books – they’ve each updated those rules in recent years. Air quality on federal lands is also already regulated by the EPA.
Put another way, the Obama-era version of the BLM rule would have imposed numerous duplicative federal requirements because oil and gas waste and air quality are already regulated on federal lands. And they will remain regulated in the Obama-era rule’s absence.
CLAIM: “A new scientific report from 24 authors representing 12 universities, two government labs and more, reported that methane emissions from the U.S. oil and gas supply chain were roughly 60 percent higher than EPA inventory estimates and that emissions from production operations were more than double EPA estimates.”
FACT: That Environmental Defense Fund (EDF) study was not only an outlier among the most recent body of methane research – it was an outlier among EDF’s own past methane research, which can be traced to a number of flaws that resulted in an inflated leakage rate estimate.
EDF has released a myriad of studies over the past several years that find methane leakage rates between 1.2 and 1.5 percent. These findings are not only in line with recent EPA estimates, but the vast majority of recent peer-reviewed research, as the following EID graphic illustrates.
But as EID highlighted when the outlier EDF study was released earlier this year, a number of questionable methodologies allowed the environmental group to produce a study that found a far higher leakage rate than its own past research.
Unlike past similar research that estimated national methane emissions from oil and natural gas development – most notably EDF’s Zavala-Araiza et al. (1.5 percent) – EDF ignored National Academy of Sciences (NAS) recommendations by not reconciling its emissions estimate with component-level emissions data in its latest study. Instead, EDF relied heavily on five facility-level studies as the basis of its estimate. Those five studies were also conducted without industry collaboration, which also went against NAS recommendations.
Only in the paper’s supplemental data is an “alternative” estimate that appropriately verifies its estimate by incorporating component-level data reported. That far more comprehensive estimate calculated a national methane leakage rate of 1.4 percent, which not only aligns with past EDF studies, but also the EPA Greenhouse Gas Inventory. Though the “alternative” estimate arguably should have been used as its topline finding, EDF chose not to promote it at all, opting to trumpet the 2.3 percent leakage estimate instead.
It appeared at the time that the study was released that EDF’s end goal was to work backwards from a conclusion aimed at making the strongest case possible for further regulations. This letter further confirms that suspicion.
CLAIM: “Methane accounts for close to 10 percent of annual U.S. GHG emissions, and of this amount, the oil and gas industry is the largest natural source.”
FACT: Agriculture is actually the largest source of methane emissions in the United States.
As the following EID graphic based on the latest EPA Greenhouse Gas Inventory data shows, enteric fermentation (livestock flatulence) is the leading source of anthropogenic methane emissions in the United States.
Only by combining oil and natural gas system emissions are the authors of this letter able to make the claim that oil and gas emissions are the United States’ top methane emissions source. The fact that the media oftentimes chooses to combine both categories exposes a double standard. After all, enteric fermentation (26 percent) and manure management (10 percent) are both livestock related, but are rarely combined. However, when combined, these agricultural activities account for 36 percent of anthropogenic methane emissions.
To be clear, oil and gas development is a significant source of methane emissions. But this letter’s inaccurate claim that this development is the top source is just another example of presenting the industry in the most unflattering light possible.
The oil and natural gas industry has made tremendous strides in mitigating methane emissions over the past three decades, reducing emissions by 14 percent since 1990 at the same time production has reached record levels. Recent commitments to further voluntary emission reductions show that the industry isn’t sitting on its laurels, either.
This letter’s efforts to exaggerate methane emissions and downplay the economic impacts of duplicative regulations reveals the authors are probably more interested in curtailing oil and gas production than actually reducing emissions. But then again, they call it the “Keep It in the Ground” movement for a reason.