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The Stage is Set for the Obama Administration’s Last Act on Climate

February 1, 2016

For over seven years, the Obama Administration has pushed forward a series of policies to cut greenhouse gases from the biggest industrial sources in the U.S.  President Obama first issued a Climate Action Plan, and established a series of targets for the US to meet: 17% below 2005 levels by 2020, and 26-28% below 2005 levels by 2025; the latter our national commitment that was presented at the recent climate negotiations in Paris.  To achieve these reductions, the Administration has implemented regulations to address cars and trucks, and power plants, the two biggest sources of CO2 in the U.S.  Additionally, the Administration has proposed (and needs to finalize) regulations that would cut CO2 from heavy-duty vehicles, regulations to reduce methane from landfills, some common sense revisions to the regulations for HFCs, a very potent class of greenhouse gases.  In addition, the Administration is working to secure an international agreement to reduce HFC emissions.

On the methane front, the President has directed EPA to set a goal of reducing methane emissions from the largest industrial source, the oil and gas sector, by 40-45% from 2012 levels. Achieving the President’s methane reduction goal is imperative to meeting the Administration’s larger economy wide goals. And yet, it is a relatively straightforward task to achieve. With one executive action, regulating existing sources of methane pollution in the oil and gas industry, the President could meet the Administration’s methane reduction target.  The stage is now set for the final act of the Obama Administration’s efforts to address climate change.

To date, the U.S. has taken some very positive steps forward in reducing air emissions from the oil and gas sector. In 2012, EPA finalized standards targeting volatile organic compounds (VOC) from some sources within the oil and gas industry. While this standard achieved the co-benefit of some methane reductions, entire segments of the industry were ignored because VOC, not methane, was the target pollutant. Moreover, even with the 2012 VOC standards in place, methane emissions from the oil and gas sector are currently still expected to rise compared to 2012 levels.[1]

In a positive step toward remedying the problem posed by rising methane emissions, in August 2015, EPA proposed the first federal oil and gas methane standards in the U.S. – and the first greenhouse gas standards for the oil and gas sector – covering a much larger list of new and modified sources in oil and gas production, natural gas processing, and the previously unaddressed gas transmission and storage industries.

But EPA has failed to address methane from nearly all the existing sources of methane pollution in the oil and gas sector.  A 2014 study by ICF International predicts that emissions from sites that existed in 2011 (which will not be subject to either EPA’s 2012 or the proposed 2015 rules) will represent 90% of the sector’s total methane emissions in 2018.[2] Additionally, the proposed regulations omit a number of key emissions sources, including liquids unloading and intermittent bleed pneumatic controllers.

EPA’s omission in not covering methane from existing sources however has become something of an anomaly.  In February 2014, Colorado became the first state to crack down on methane pollution from new and existing sources in the oil and gas sector. The EPA used Colorado’s work as it developed its proposed regulations, but opted to only address new and modified sources.  Then just last week, Pennsylvania announced a process to develop regulations and policies to address methane from new and existing sources. Also last week, the US Bureau of Land Management (BLM) announced proposed regulations to address methane from new and existing sources on public lands. California has also initiated a process of developing regulations for new and existing sources of methane in the oil and gas sector, a process that will be fueled by the continuing massive Aliso Canyon gas leak in Porter Ranch, California.

The standards that EPA and BLM have proposed to date are important – our analysis shows that they will reduce oil and gas methane emissions in 2025 by 28 million metric tons of CO2e.  The problem is that more reductions – another 75 million metric tons of CO2e – are needed to meet the goal of a 40-45% reduction in these emissions by 2025. This is the methane emissions gap. The Administration has suggested that new voluntary methane reduction programs could bridge this gap between its proposed new and modified source regulations and its 2025 goal. However, analyses by both the Rhodium Group and CATF show that even full participation by industry in the most aggressive voluntary program would still fall well short of the 40-45% goal. Assuming optimistically that 100% of the industry participates in this voluntary program, these commitments would only reduce methane emissions by 21 million metric tons CO2e (on top of the reductions from proposed rules) leaving a gap of 54 million metric tons CO2e, according to CATF’s analysis. Of course, we know from experience that there is no chance industry will achieve more than a small fraction of these reductions voluntarily.  Clearly, enforceable regulations are needed to meet the President’s targets. And in fact, strong nationwide standards on existing oil and gas equipment would reduce emissions by 77 million metric tons CO2e – enough to meet the Administration’s goal.

So now, with roughly a year left in office, the stage is set for the Obama Administration to push forward one last climate policy to address methane emissions from existing sources in the oil and gas sector.  The opportunity is huge. Methane reductions from existing sources would allow the Administration to achieve its goal of reducing methane emissions by 40-45% from 2012 levels and could cut emissions by over 75 million metric tons CO2e. It would also play a critical role in helping the US to achieve its goal for total greenhouse gas emission reductions that the U.S. reaffirmed in Paris at the end of 2015, and the controls used to reduce methane emissions would also reduce emissions of other harmful air pollutants from oil and gas operations, which include cancer-causing substances and pollutants that form ground-level ozone smog.

No other Administration has done so much to combat climate change, and yet there is still time for a final action to dramatically reduce methane emissions from the nations oil and gas sector. Do that, and then take a bow, Mr. President.

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