US Methane Mayhem

US gas producers spent years fighting tooth and nail against federal regulation of releases from their operations of methane, a potent greenhouse gas. That dynamic has recently shifted. Majors, as well as some larger independents, now acknowledge the need to slash methane emissions if gas is to have any role in a low- or zero-carbon world. Along with the rollout of voluntary programs aimed at cutting emissions, that acknowledgement has been accompanied by a slow but genuine pivot toward acceptance of federal oversight -- a change of heart visible when the Trump administration proposed to strip methane-related curbs from Obama-era emissions standards for new wells, storage tanks and other equipment (WGI Apr.3'19). Not everyone has pivoted, however. Smaller independents whose operations often include low-producing wells where methane controls are considered less economically feasible continue to complain that blanket, top-down federal methane standards are unnecessarily and disproportionately burdensome. They instead favor voluntary and state-level regulations, which can be effective but lead to a patchwork of varying degrees of stringency. The result has been an industry split that has so far remained largely under the radar, given that the Trump administration is gearing up to finalize its rewrite of its predecessor's methane standards for new wells. But the divide could worsen if Democratic candidate Joe Biden wins the US presidential elections in November. Biden has not been shy about his plans to immediately tighten federal methane standards, frequently citing it among his core environmental priorities even when speaking to news media in gas-rich Pennsylvania, a key battleground state. Policy advisers underscored the point in a recent strategy document from a task force aimed at unifying Biden’s campaign with that of former Democratic challenger Bernie Sanders, calling for “robust federal standards” of greenhouse gas emissions. A coalition of states, cities, and green groups is meanwhile advancing a lawsuit that could prompt a victorious Biden administration to take the landmark step of regulating existing wells and other sources, a nightmare scenario for smaller producers. The way that policy fight plays out could have long-term implications for the gas industry. Environmentalists have long argued that the lion’s share of emissions comes from existing wells and older equipment, but these have never been subject to federal oversight. According to an analysis of federal data by the nonprofit Environmental Defense Fund (EDF), developing existing source standards would capture more than 3 million tons of methane each year. EDF senior attorney Rosalie Winn says the industry is clearly divided on the issue, and that dynamic will continue to play out as the litigation wends its way through the courts. She says most majors and some independents have backed the idea of federal regulation of existing sources of methane, not just new wells, which are lower hanging fruit, “due to the recognition that methane pollution as a whole is a fundamental problem” that threatens the industry’s social license to operate. But the question could go beyond social license. As gas increasingly competes with renewables for market share in the US, it faces a growing universe of state clean energy and low-carbon standards. Navigating those waters without solving the methane problem could prove treacherous.