EPA to rescind methane regulations for oil and gas

The Environmental Protection Agency is preparing to adopt new rules that would rescind regulations for methane-gas emissions, including ending requirements that oil-and-gas producers have systems and procedures to detect methane leaks in their systems, senior administration officials said.

The rule changes will apply to wells drilled since 2016 and going forward, and remove the largest pipelines, storage sites and other parts of the transmission system from EPA oversight of smog and greenhouse-gas emissions. The changes also ease reporting requirements for the industry and, for some facilities, how often a plant must check for leaks of other pollutants, the officials said.

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The new rules, expected to be signed and issued this week, adopt most of the core elements of two proposals from 2018 and 2019. Agency officials are fulfilling a directive by President Trump to ease regulations on U.S. energy producers, and have said the rules being eliminated are duplicative of other federal and state rules.

They were adopted in 2016 under former President Obama amid concerns about methane-gas leaks contributing to climate change.

Methane accounts for about 10% of U.S. greenhouse-gas emissions and it is about 25 times more potent than carbon dioxide in trapping the earth's heat, according to estimates used by the EPA. Agency figures show the oil-and-gas industry has long been the nation's largest emitter of methane, even before the shale boom.

As the drilling boom sent natural-gas production surging, the EPA responded in 2016 with requirements for companies to make plans for reducing emissions at new wells and the pipelines they feed. That included regular checks to close leaky valves, pipelines and tanks in the sprawling network covering millions of miles that supplies home furnaces, power plants, industrial sites and other consumers.

Rescinding these requirements was a priority for small-and midsize oil-and-gas producers, which say the requirements were so costly to meet that it would be unprofitable to drill in some places.

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But larger producers, including international giants Exxon Mobil Corp., Royal Dutch Shell PLC and BP PLC, favored retaining the rules, saying a lack of climate regulation undermines their promise that the U.S. natural gas they sell is a cleaner source of energy.

In recent days, the EPA and White House officials have agreed, tentatively, on a final rule package after sometimes-contentious negotiations, according to senior administration officials.

It is pending a final signoff from the White House Office of Management and Budget, where the EPA sent a final draft of the rule on Friday, one of those officials said.

As part of those discussions, the White House agreed to drop plans that would have eased the rules further, reducing inspections to once a year from the current twice a year. The EPA said the environmental benefits of twice-annual inspections are so large that it would be difficult legally to justify fewer inspections, the officials said.

White House officials relented after EPA Administrator Andrew Wheeler told them that crafting a rationale for fewer inspections could delay the rest of the methane rollback past the Nov. 3 election and maybe beyond Mr. Trump's term in office, the senior administration officials said.

Their compromise requires twice-annual inspections across nearly all the oil-and-gas industry, the officials said. That maintains the status quo for most operations; it eases what had been a quarterly-inspection mandate at compressor stations, which push natural gas from the wells through the pipelines.

Administration officials have largely sided with the smaller producers and pushed to roll back the methane rules as much as possible. The central tenet of their new policy is that the Obama administration erred to begin with when it claimed that the EPA had the authority to regulate methane from oil-and-gas operations.

The Obama administration didn't go through the proper scientific and legal process required to justify the 2016 rules by first determining that the oil and natural-gas industry's greenhouse-gas emissions, primarily methane, cause or contribute to dangerous air pollution, the EPA says in the new rules, according to the senior administration officials.

That determination would make it harder for a new administration to reclaim that authority without a congressional mandate. And, most important, industry and legal experts say, the new policy stops the EPA from requiring companies to add leak-prevention systems to wells drilled years ago, something that isn't currently required, but which the EPA would eventually have been obligated to do had the Obama-era policy been allowed to stand.

Leak monitoring would still be required, just not for methane directly. While the methane mandate is gone, the 2018 proposal being adopted in this package did keep well-monitoring requirements for volatile organic compounds, pollutants that cause smog. Agency leaders have said a benefit of that monitoring is that it will trap most methane emissions, too.

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The agreement on the frequency of those inspections now sets the stage for the EPA to officially finish the rules this week, the officials said. And agency leaders have been exploring the possibility of an event to mark the moment, with Mr. Wheeler signing them Thursday in the Pittsburgh area, heart of the country's biggest natural-gas field, the Marcellus Shale, the officials added.

Several of the country's biggest oil-and-gas companies have major offices and operations near Pittsburgh, and the region is a key source of Mr. Trump's political support.

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Pennsylvania is one of the country's biggest swing states and Mr. Trump rode it to victory in 2016. He has boasted a pro-fossil-fuel platform and seized on enthusiasm for Republicans in western Pennsylvania that has grown alongside the oil-and-gas industry.