EPA’s Fundamentally Flawed Rule Underestimates True Costs

April 18, 2012

(DENVER) – Western Energy Alliance’s Kathleen Sgamma, Vice President of Government & Public Affairs, released this reaction to today’s announcement by the Environmental Protection Agency (EPA) concerning final air rules for the oil and natural gas industry.

“Small, independent producers work hard to protect air quality while ensuring clean energy is delivered to the American people at an affordable price. The small amount of emissions produced at the natural gas wellhead must be put in perspective with the significant full life-cycle clean air advantages of natural gas. When too many resources are spent to achieve minimal environmental benefit compared to the cost, as in this rule, the impact is less American energy and higher costs.”

“Only a federal agency far removed from real-world economics and on-the-ground conditions could say with a straight face that a regulation is cost effective when it has $745 million in costs and only $11-19 million in benefits. Even with that disparity, we believe EPA seriously overestimated the benefits and underestimated the costs of compliance.”

“This rule continues to be about circumventing Congress and using the Clean Air Act (CAA) to regulate greenhouse gas emissions and global warming. This regulatory proceeding provided EPA with the authority to regulate air toxics and Volatile Organic Compounds (VOC), yet EPA’s real target is methane which is not a pollutant regulated by the CAA. EPA’s own data show that the oil and gas industry is a low source of VOCs, and that the risks from air toxics covered by the rule are already within the acceptable range.”

“Furthermore, the rules are not flexible enough to account for new exploratory areas where infrastructure does not yet exist. Small businesses disproportionately operate in such conditions, and this rule could make exploring in new areas cost-prohibitive. This is another example of the federal government imposing one-size-fits-all rules on the states that could hamper the expansion of American natural gas exploration and production.”

While the fundamentals of the rule remain flawed, Western Energy Alliance does applaud EPA’s common sense phased implementation, which takes into account real constraints in manufacturing and acquiring new equipment.


About Western Energy Alliance
Western Energy Alliance, founded in 1974 as the Independent Petroleum Association of Mountain States, is a non-profit trade association representing 400 companies engaged in all aspects of environmentally responsible exploration and production of oil and natural gas in the West. More information on Western Energy Alliance and its members is available at www.westernenergyalliance.org.