EPA Is At It AgainAlan Carlin | May 13, 2016
On May 12 the US Environmental Protection Agency (EPA) issued its final methane emissions regulation for new or modified oil and gas facilities. It requires that specified technology be used to reduce methane emissions. The effects on global temperatures will not be measurable even if the regulation achieves everything EPA claims it will. It will, however, increase the cost of natural gas (as well as oil), which will make it less likely that natural gas will be used compared to other energy sources, particularly coal.
Since coal has double the CO2 emissions per unit of energy used compared to natural gas, the regulation will increase CO2 emissions relative to the current situation without the regulations by increasing the use of coal relative to what it otherwise would have been. And it will increase the cost of natural gas to everyone using it, such as homeowners for home heating. This will particularly affect those homeowners with the lowest incomes. It will also increase the costs of any product that uses natural gas in its manufacture, thus encouraging production in countries that do not have such regulations.
Government Intervention Is Unjustified
The oil and gas industry already have strong incentives to reduce methane emissions since escaped methane is methane that they cannot sell, which reduces their revenue; this means that they are unlikely to underinvest in methane control. There is no reason to think that EPA knows more about the tradeoffs between methane emissions and the cost of control than the industry or the market does and many reasons to think that it knows much less. EPA, of course, claims that the regulations will save oil and gas companies money by further reducing methane leaks, but If that were true, the industry would have carried them out long ago. All this has not stopped EPA from intervening in the market anyway. So in addition to the EPA greenhouse gas (GHG) power plant regulations discussed in considerable detail in my book, Environmentalism Gone Mad, we now have another expensive, unjustified, and counterproductive EPA attempt to directly reduce GHG emissions. The purpose of such EPA attempts to reduce GHG emissions has been described in various ways by the EPA Administrator, but the short version is symbolism.
Apparently EPA will continue with this nonsense until they are explicitly prohibited from doing so by the courts or Congress. The courts have issued a temporary stay on the power plant regulations, but not on this new regulation. Foreign producers, of course, are not burdened by these regulations, so this will encourage more expansion in production of natural gas on their part than would otherwise occur, generally with less or no controls.
And left unregulated is the major source of human-related methane emissions–cow flatulence. EPA is already planning new methane regulations on existing oil and gas wells, which will suffer from the same drawbacks but will probably be even more expensive. I cannot wait to see how EPA will tell cows what they must do with the methane produced in their digestive tracks. Or perhaps EPA will tell consumers that they cannot eat beef or drink milk. Some more extreme environmentalists would like nothing better.
The easiest solution I see is to prohibit EPA regulation of GHG emissions.