Oil Industry Group Responds To Methane Limit Rollback

Aug 30, 2019
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NOEL KING, HOST:

Environmental groups are pushing back on President Trump's rollback of regulations that are aimed at curbing methane leaks from oil and gas facilities. Now, you would expect that from environmental groups, but some major oil and gas companies are pushing back too. The Trump administration made this announcement about the rollback yesterday.

Methane is a greenhouse gas. It's 25 times more powerful than carbon dioxide, although it does stay in the atmosphere for less time. Here to help us figure some of this out is Erik Milito. He's vice president of upstream and industry operations for the American Petroleum Institute. Good morning, sir.

ERIK MILITO: Good morning.

KING: So API represents hundreds of oil and gas producers, some big ones and some small ones. Your organization pressed the administration for this rollback, but some of the biggest oil and gas companies - Exxon, BP, Shell - they want the regulations to stay in place. What is going on here?

MILITO: Well, that's correct. But it's also important to understand what these regulations do and what they do not do. First of all, it's a proposal. So we're not sure what the final rule is going to look like. But more importantly, this proposal does not impact the mission control requirements that EPA put in place back in 2012 and 2016. So we worked closely with EPA to put in good regulations back in 2012 and 2016 that address emissions of methane.

What this proposal does, it raises the question of the legal authority as to whether or not EPA can actually regulate methane as a pollutant. So it's really a question of statutory construct and whether or not they're following the letter of the law.

KING: But isn't methane a pollutant?

MILITO: Well, that's the question. It's not a hazardous air pollutant. It's a greenhouse gas. So under the Clean Air Act...

KING: It's contributing to climate change.

MILITO: Yeah. They have to determine whether or not under this section they have not made an endangerment finding when they did this in 2016, when they added this as a pollutant. And they're bound to do that by the law. And so right now they're going to go out to the public and take comment and determine whether or not they've met that threshold question.

KING: NPR talked to former Shell Oil president John Hofmeister yesterday. I want to play you something he said.

(SOUNDBITE OF ARCHIVED NPR BROADCAST)

JOHN HOFMEISTER: In the future, the ability to operate in the fossil fuel industry is going to demand an environmental performance where the public believes that you are protecting the land, the water and the air. So regulations that protect the water, the land and the air, which enable the industry to continue to do what it does, are essential for the industry to be successful down the road.

KING: The former president of Shell Oil is talking about reputation, right? Regulations convince regular people that there's no funny business going on. What do you think about that point that he's making - regulations are important because they make us believe that things are being done right?

MILITO: Oh, we fully agree with that. And we support these regulatory requirements they have in place right now. And the industry's performance over the past 10 to 20 years in reducing methane emissions has been a really - a success story because we've come up with technologies to get out there and look at the leaks and reduce them. We've come up with ways to capture emissions during operations.

And all these technologies and all these innovations have now become part of the regulations. And they're part of the regulations that we support and want to see kept in place. These questions now are really about, what does the future hold? Is methane something that EPA has the authority to get out there and regulate in this way? And what does that mean for the older wells, the smaller wells owned by smaller companies?

KING: If nothing was going wrong, if companies were making moves to limit the leaks themselves, why did the Obama administration determine that we needed these regulations in the first place?

MILITO: Well, this gets down to the question as to whether or not regulating new sources as they come online and phase out the old wells is enough or whether or not EPA should consider going after the old wells, the ones that are marginal wells not producing very much. And that could impact really small businesses like farmers and ranchers who have them on their properties and kind of even elderly people. Retirees have these wells, and they rely on them for their income on a monthly basis. These types of rules could impact those types of people disproportionately because they could shut those wells in and really take away that income that they rely on.

KING: OK. So it's about small producers here. Just quickly in the seconds we have left, if methane emissions from the oil and gas industry begin rising again - you've said they're falling - will the API then support the federal regulations on methane?

MILITO: Well, as I've stated, we support the regs that they have in place. They're effective. They utilize the technologies that we've come up with. And I'm fully confident the emissions are going to continue to go down. There's been recent research by NOAA and the federal government that shows that the methane that we're seeing isn't going up. It's coming from other sources. It's not coming from the oil and gas industry. So we have a good story, and we're going to keep innovating and advancing technology.

KING: Erik Milito of the American Petroleum Institute. Thanks.

MILITO: Thank you. Transcript provided by NPR, Copyright NPR.

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