social cost of carbon
Optimism abounds in the oil and natural gas industry since November 9th when Donald Trump unexpectedly won election. Like any industry, ours is a diverse one with all political viewpoints. But it was no secret that the Obama Administration was hostile to our industry and used regulatory overreach to make American development and production of oil and natural gas more difficult. The optimism results from not having four more years of a hostile regulatory environment, and the chance to overturn the redundant federal regulatory overreach that went far beyond reasonable oversight of oil and natural gas.
BLM’s proposed venting and flaring rule is the administration’s latest regulation targeting oil and natural gas production. BLM’s proposal suffers from wide-ranging problems including jurisdictional overreach into air quality, technologically infeasible requirements, and implementation costs that far exceed the rule’s benefits. Our comments on BLM’s proposal were 90 pages and spoke to the myriad problems, but I want to hone in on a few key numbers that demonstrate the flaws in BLM’s assumptions about the proposed rule’s impact.
Computer models are powerful tools, but as the old saying goes, “garbage in, garbage out” and models of the Social Cost of Methane (SCM) are no exceptions. The Environmental Protection Agency’s (EPA) new methane rules rely heavily on the SCM to show a benefit. Now, the Bureau of Land Management (BLM) is following suit in its venting and flaring rule, with supposed benefits between $115 million and $188 million that are largely based on the SCM.