Top gas producer wants EPA to keep Obama’s Methane Emissions Rule

(Photo courtesy of XTO Energy)

One of the largest holders in U.S. natural gas reserves has asked the Trump Administration’s Environmental Protection Agency not to completely roll back the Obama-era policies on methane emissions.

ExxonMobil’s letter to the EPA said it appreciates the need for cost-effective rulemaking essential to the ever-growing industry, but also stressed the need to maintain underlying and strong environmental standards. Through its XTO Energy acquisition, the company produces about 157 million cubic feet per day in natural gas.

The U.S. electricity generation mix is increasingly dependent on low-cost natural gas and renewables while other sources such as coal-fired and nuclear are becoming less cost-effective in the current market. Natural gas-fired generation produces about half of the carbon emissions of coal, according to reports.

In its EPA letter, ExxonMobil said it was pursuing an internal initative to reduce its own methane emissions 15 percent by 2020. It’s also part of an industry-wide partnership focused on mitigation efforts to reduce methane through drilling efforts.

The Trump EPA in September announced plans to produce new rulemaking rolling back the Obama Administration rules of methane emissions from oil and gas operations. Interior Deputy Secretary David Bernhardt at the time called the previous rules “flawed” and “a radical assertion of legal authority.”

ExxonMobil responded that it certainly supported fine-tuned rules which are cost-effective, but argued that the EPA edict was a good foundation for controlling methane emissions.

“In that regard, we support maintaining the key elements of the underlying regulation, such as leak detection and repair programs, enhanced pneumatic device standards, control requirements on regulated storage tanks, and reduced emission completions on new wells,” the company’s Monday letter to the EPA docket reads. Monday was the deadline for comments to the rulemaking process.

“We further believe the correct mix of policies and reasonable regulations help reduce emissions, further supporting the benefits of natural gas in the energy mix,” the ExxonMobil letter added. “We have gained considerable experience from our efforts” working on emissions reduction goals and collaborating with peers in that area. “We appreciate the opportunity to submit these comments to the rulemaking docket.”

The company may also have been prodded by an earlier letter sent by environmentally friendly investors calling on the larger energy companies to oppose the Trump EPA’s planned rollback. Those investors represented close to $1.9 trillion in assets under management, and called on the oil and gas industry to “exercise its powerful voice” and act vs. the EPA plans.

Sustainable investment group As You Sow responded to the ExxonMobil letter favorably, noting it was engaged with the company on methane emissions issues since 2017.

 “Investors have vocally opposed the irrational methane regulation rollback proposed by the Trump administration which increases risk to the oil and gas industry and to shareholders of these companies,” said Lila Holzman, energy program manager for As You Sow, in a statement. “We are pleased that ExxonMobil has responded and taken action to demonstrate its commitment to sound methane policy by publicly commenting to the EPA that it “˜supports federal regulatory standards to mitigate emissions for both new and existing source oil and gas facilities.’ By urging the EPA to uphold the key elements of existing methane controls, ExxonMobil is demonstrating that such regulations are indeed in the best interests of all.”

Overall U.S. natural gas production has been revolutionized by the combination of horizontal drilling and hydraulic fracturing in shale rock deep below the earth’s surface. Daily production has surged beyond 80 billion cubic feet per day and growing 10 percent annually, according to reports.

The production glut has lowered prices to historic levels, sometimes as low as $2 per thousand cubic feet. This attractive pricing has driven natural gas-fired power to nearly a third of the nation’s electric generation mix, supplanting coal as the top choice.

(Rod Walton is content manager for the Power Engineering website and the PowerGen International conference and exhibition, which will be Nov. 19-21, 2019 in New Orleans. Gas-fired technologies and emissions reduction are part of the content sessions annually at PowerGen. Walton can be reached at 918-831-9177 and rod.walton@clarionevents.com).

 

 

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