EPA Methane Rule Will Increase Energy Costs, Suppress American Production

​DENVER –  Western Energy Alliance released this statement following EPA’s announcement today of new and existing source methane rules for the oil and natural gas industry. This statement is attributable to Alliance President Kathleen Sgamma:
 
“The oil and natural gas industry supports balanced efforts to reduce methane emissions, but this rule tips that balance and will suppress American production at the same time the president is asking Russia and OPEC to increase theirs. The industry has a successful track record of reducing methane emissions by 23 percent since 1990, even as oil and natural gas production have increased 49 percent and 71 percent, respectively. Further, fuel switching to natural gas in the electricity sector continues to be the primary reason the United States has reduced more greenhouse gases than any other country. 

“Besides targeting one industry with false information (*see below) and disadvantaging small marginal-well producers, EPA’s proposed rule would be extremely costly and therefore would shut in American production prematurely. It also threatens to increase the cost of natural gas for consumers. As we’ve seen this year, when natural gas prices increase, coal electricity generation increases and with it, greenhouse gas emissions, which could easily overwhelm the supposed savings that EPA claims from this rule.“
 
“Further, EPA is rushing out the rule to coincide with the president’s appearance at COP26. EPA claims the rule will result in methane reductions from existing wells even before it has the data to make an estimation. The National Energy Technology Laboratory study on existing marginal well emissions is not expected to be released until December. Without that study, much of EPA’s estimation is speculative.”
 
By the numbers:

• EPA claims in its fact sheet that there will be annual savings of 3.15 million tons of methane (70.77 million metric tons {mmt} of CO2) from the proposed rule. (Fact sheet: 41 million tons {920 mmt of CO2} over 13 years from 2023 to 2035). In 2019 alone, natural gas electricity generation reduced 525 mmt of CO2 equivalents. By making natural gas production more expensive and raising the cost to consumers, the EPA rule puts that much larger GHG reduction at risk.
  
  
• EPA falsely claims that “the oil and natural gas industry is the nation’s largest industrial source of methane.” According to EPA’s own 2020 GHG inventory, the oil and natural gas industry emits 27.8 percent of U.S. methane emissions while agriculture is the largest contributor at 39.9 percent. How can the public trust EPA’s estimates when it misquotes its own GHG inventory? 

In the chart, Natural Gas Systems plus Petroleum Systems together constitute oil and natural gas industry emissions. Enteric fermentation, manure management, and rice cultivation together constitute the agriculture industry.

Fuel switching from coal to natural gas in the electricity sector has reduced more greenhouse gas emissions than have wind and solar energy combined. Because natural gas has 55 percent lower carbon dioxide emissions than coal, it delivers huge GHG reductions in the electricity sector, where emissions are nine times higher. Natural gas has delivered 61 percent of the reduction in greenhouse gases resulting from fuel switching in the electricity sector, removing 3,351 million metric tons of carbon dioxide equivalents (MMT CO2 Eq) since 2005. In contrast, wind and solar have reduced GHG emissions by 2,125 MMT CO2 Eq , or 39% of the total reduction.  

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