EPA and BLM Methane Rules are Now in Effect for Oil and Gas Operations. Now What?

By Lev Blumenstein, Energy Law Fellow

Image Credit: Wild Earth Guardians (2014)

Methane is a potent greenhouse gas (GHG). Over a hundred-year-period, it has twenty-five times the global warming potential of carbon dioxide (CO₂). Both the United States Environmental Protection Agency (EPA) and the federal Bureau of Land Management (BLM) recently issued rules regulating fugitive methane emissions generated during oil and gas operations. The rules have the potential to meaningfully reduce GHG emissions from America’s energy sector, but an uncertain regulatory environment threatens to undercut the anticipated reduction in GHG emissions.

EPA’s Methane Rule

On June 3, 2016, EPA issued a rule regulating methane emissions from new, reconstructed, and modified oil and gas operations. Additionally, the rule directs well operators to inspect existing well sites for methane leaks and repair any leaks they discover. EPA estimates that the avoided emissions will total 6.9 million metric tons of CO₂ equivalent (CO₂e) in 2020 and 11 million metric tons of CO₂e in 2025.[1]

The regulations went into effect on August 2, 2016, and an initial survey to discover leaks was to have been completed by June 3, 2017. In April 2017, the new EPA Administrator, Scott Pruitt, announced his intent to reconsider provisions of the rule and issue a ninety-day stay of the June 3, 2017, compliance date.[2] On June 5, 2017, EPA issued an official notice of reconsideration of the regulation and a retroactive ninety-day stay of the compliance date. EPA then announced its intention to stay the entire rule for two years while it reconsidered the rule. Environmental groups sued.[3] On July 3, 2017, the United States Court of Appeals for the District of Columbia vacated EPA’s stay during the pendency of its reconsideration of the final rule.

BLM’s Natural Gas Rule

On November 18, 2016, BLM promulgated a rule regulating natural gas that is lost during oil and gas operations on federal and Indian land. BLM estimated that 114 billion cubic feet of natural gas was vented, flared, or leaked in 2014, which is enough to supply 1.5 million households with natural gas for a year.[4] BLM anticipates that the rule will avoid up to 4.5 million tons of CO₂e emissions per year.[5] In May, the regulation unexpectedly survived a Senate vote to repeal it under the Congressional Review Act. On June 15, 2017, BLM announced that it is postponing the compliance deadline for many provisions of the rule during the pendency of litigation concerning the rule.[6] A number of states and environmental groups filed a lawsuit challenging BLM’s stay in the United States District Court for the District of Northern California.[7]

An Uncertain Future for Federal Methane Rules?

The methane rules are now in effect, but their future effectiveness is uncertain in three key respects. First, through notice and comment rulemaking, the agencies may rescind or modify the rules in the next few years. Both EPA and BLM have announced their intent to revisit their rules. Operators may postpone rectifying sources of fugitive emissions in anticipation of a regulatory rollback. Second, courts could find the rules invalid. Third, the agencies may deprioritize enforcement of the rules. This is a more serious issue if BLM deprioritizes enforcement. There is no applicable citizen suit provision that would allow private citizens to directly sue emitters who violate BLM’s methane regulations.

EPA’s methane rule is different. Private citizens may directly sue emitters of fugitive methane emissions covered by EPA’s regulation. However, private citizens are not as effective as EPA in ensuring widespread compliance with regulations for two important reasons. First, private citizens may not leverage the threat of criminal prosecution. Second, private citizens lack the administrative, financial, legal, scientific, and technical resources available to the federal government. Nevertheless, the threat of a potential citizen suit should prompt most emitters to comply with EPA’s regulations for now, even if the Administration sends clear signals that it will not prioritize enforcement of EPA’s methane rule.

The regulatory uncertainty and the difficulty in challenging a possible decision by BLM to deprioritize enforcement of its methane rule threaten to undercut the potential gains from EPA and BLM’s rules.  

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[1] Oil and Natural Gas Sector: Emission Standards for New, Reconstructed and Modified Sources, 81 Fed. Reg. 35,824, 35,877 (June 3, 2016).

[2] Letter from E. Scott Pruitt, Adm’r, U.S. Envtl. Prot. Agency, to Howard J. Feldman, Am. Petroleum Inst., et al. (Apr. 18, 2017).

[3] Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources; Grant of Reconsideration and Partial Stay, 82 Fed. Reg. 25,730 (June 5, 2017).

[4] Waste Prevention, Production Subject to Royalties, and Resource Conservation, 81 Fed. Reg. 83,008, 83,010–11 (Nov. 18, 2016).

[5] Id. at 83,014.

[6] Waste Prevention, Production Subject to Royalties, and Resource Conservation; Postponement of Certain Compliance Dates, 82 Fed. Reg. 27,430, 27,431 (June 15, 2017). Wyoming, Montana, North Dakota, Texas, and energy trade groups challenged the validity of BLM’s methane rule. Wyoming v. U.S. Dep’t of the Interior, No. 2:16-cv-00285-SWS (D. Wyo. Nov. 18, 2016).

[7] California v. U.S. Bureau of Land Mgmt., No. 3:17-cv-03804-EDL (N.D. Cal. July 5, 2017).

Grid Defection: Environmentally Unjust and Bad for Renewable Energy in the Long Term?

By Casille Systermans, Policy Extern

Image Credit: NREL

Solar power is a rapidly growing industry with the potential to provide significant environmental and economic benefits to society. One solar technology option that is becoming more affordable and more widely available is solar-plus-battery systems, which allow home or business owners to install solar panels with a battery back-up on their property. These systems have the potential to allow energy customers to produce all the energy they need on site. This in turn gives customers the option to disconnect or “defect” from the electricity grid entirely. While increasing the amount of solar-plus-batter systems providing energy in the United States is certainly a positive thing, grid-defection is a separate issue and it is important to consider the major environmental justice concerns associated with large-scale grid defection, as well as the potentially negative consequences large-scale grid defection can have on the long-term goal of achieving an entirely renewable energy grid.  

When customers defect from their utility, the utility company loses a customer and ultimately sells less energy. If grid defection becomes wide spread and utilities lose a large portion of their customer base, they will likely end up having to raise rates for the customers that remain to pay for their stranded costs. As rates rise more and more, more customers will be financially incentivized to defect from the grid, causing the utility’s customer base to shrink further and rates to rise even more. This is commonly referred to as the utility death spiral.

The problem with this scenario is that the customers who remain with the utility are more likely to be low-income customers who cannot afford the up-front cost associated with solar-plus-battery systems. Low-income communities and families already have disproportionately high energy cost burdens and are more likely to be negatively impacted by the pollution associated with traditional fossil fuel energy sources. Transitioning to a renewable energy system should not exacerbate environmental justice concerns by placing the burden of this transition on marginalized communities. Large-scale grid defection has the potential do just that by leaving the poor with the bill for large fossil resources and grid infrastructure that were built to benefit everyone.

It is possible to mitigate the economic harm to poor communities caused by large scale grid defection by charging customers to defect, requiring the utility to absorb their stranded costs rather than raise rates or adopting other mitigation policies. However, the impact on poor communities is not the only potential problem associated with large scale grid defection. In the long-term, large-scale grid defection could lead to a sub-optimal energy system.

Solar-plus-battery systems have the potential to be hugely beneficial in facilitating a transition to a fully renewable energy system and expanding use of solar-plus-battery systems does not require grid-defection. Instead, solar power and battery power should be part of comprehensive energy reform.  Distributed generation is essential to achieving an 100% renewable energy grid and instead of viewing solar-plus-battery systems as a threat to traditional utilities, they should be treated as a key part of a larger renewable energy transition plan.

Renewable energy advocates and utility regulators need to consider environmental justice concerns when they choose which policies to pursue and how best to encourage a renewable energy transition. Poor and minority communities are more likely to be affected by pollution and environmental degradation and it is unfair to ask those same communities to pay higher energy rates so that others can defect from the grid. Solar and battery power are only going to become more prevalent and it is essential that the energy community encourages and manages that growth in a just manner.

Abandoning Evidence-Based Policy Decisions, Trump Makes a Bad Deal for America

By Natascha Smith, Energy Fellow

Flooding from Hurricane Harvey outside Beaumont,
Texas. Credit: Dominick Del Vecchio, FEMA

When most of us are faced with a major decision we like to consider our options. Whether you hit the net for online reviews or turn to the trusty pro-con list, we all want to feel like we made the best decision possible given the information before us. Shouldn’t we expect our government to do the same? When we elect officials to represent us in Washington D.C., we hope that they will put themselves in our shoes, weighing all the pros and cons, and making the best decision they can with the information they have. Nevertheless, President Trump has done the exact opposite. On August 15^th, Trump issued a new executive order rolling back the Federal Flood Risk Management Standard and abandoning evidence-based policy decision-making.

The Federal Flood Risk Management Standard, updated by President Obama by executive order in 2015, required the federal government to account for sea level rise and increased flood risk caused by climate change before constructing new infrastructure. The Obama Order, which only regulated federal projects, gave agencies three options when siting projects. Agencies could  consider the best available climate change science in their siting decision; build infrastructure two feet above the 100-year flood elevation standard, with critical infrastructure, like hospitals, five feet above the 100-year flood elevation standard; or build infrastructure at the 500-year flood plain level.

Trump’s new plan for streamlining the federal permitting process includes returning the Federal Flood Risk Management Standard to the standards set in 1977. These standards require agencies to consider only the outdated 100-year and 500-year flood elevation standards when siting new projects. Rolling back a common-sense protection like this serves as yet another example of President Trump eliminating his predecessor’s climate change policy on every level imaginable.

Despite the shortsightedness of rolling back infrastructure protections when extreme weather events are becoming increasingly common, Trump continues to find support for his increasingly outrageous actions (rollback). Representative Ralph Abraham (R-Louisiana) supports Trump’s rollback of the Federal Flood Risk Management Standard even though Louisiana experienced severe flooding in 2016, which caused over $10 billion in damage. While Rep. Abraham calls this catastrophic flooding an “isolated event,” severe weather events are becoming the new normal. Shortly after Rep. Abraham issued his statements, Hurricane Harvey dumped almost 10 inches of rain in Louisiana and nearly 50 inches of rain on Houston. At its peak, Houston’s flooding covered an area as large as New York City and Chicago combined. While Hurricane Harvey is being called a “500-year flood,” in reality this is the third “500-year flood” event that Houston has experienced in the past three years.

How can this be?  Michael Mann, Distinguished Professor of Atmospheric Science at Pennsylvania State University, explains that climate change has intensified severe weather events so much that we need a new set of guideposts. While the chance of severe weather events occurring is calculated based on how frequently such events occurred throughout history, a “500-year flood” refers not to a length of time, but rather to the 1-in-500 chance of such a flood occurring each year. Likewise, a “100-year flood” has a 1-in-100 chance of occurring and a “1,000-year flood” has a 1-in-1,000 chance of occurring in a given year. Professor Mann and other atmospheric scientists agree that these historical projections are no longer accurate because climate change is shifting the baseline. He analogizes the increased frequency of floods and other severe events to playing with loaded dice.

With severe weather events becoming more common, it becomes even more important to construct infrastructure with climate change in mind. It is not only socially irresponsible to ignore climate change; the financial impact is potentially devastating. Experts are estimating it could take nearly $200 billion to repair damage caused by Harvey, and the taxpayers will be picking up a large chunk of that tab. Eliminating requirements for agencies to make evidenced-based policy decisions when constructing infrastructure is irresponsible and may leave taxpayers footing the bill for projects that are vulnerable to severe weather events that are almost certainly going to get worse.  For a man whose presidential platform consisted of touting his business acumen, by encouraging agencies to ignore the best available climate science when making infrastructure siting decisions, Trump made a bad deal for America.