The Environmental Protection Agency just announced a plan designed to reduce the number of regulations saddling the natural gas industry.
The intention is sound. Natural gas has become a critical component of the U.S. economy, powering our homes and offices and supporting millions of jobs. Easing regulations could help this industry reach new heights. But the plan won't succeed — as it'll keep many of the rules that are unnecessary and duplicative in place.
Natural gas production does pose some unique risks, chiefly from gas leaking out of the drilling and storage equipment. A key component of natural gas is methane, which is more potent than CO2 in terms of its potential contribution to global warming.
The natural gas industry has ample incentive to fix the problem on its own — when a rig leaks gas, it might as well be leaking money, since methane itself is a sellable product. That's why, over the past two decades, natural gas producers have invested more than $90 billion to develop new emissions-reducing technology, in large part to capture methane.
These investments have worked. As natural gas production has expanded, methane emissions have dropped. From 1990 to 2015, domestic natural gas output spiked more than 55 percent, yet methane emissions from natural gas production fell over 16 percent. These trend lines show no signs of slowing.
Two years ago, federal regulators decided to establish some formal rules for methane emissions. Regulators hoped that the rules would empower public inspectors to ensure that gas rigs are minimizing leaks and protecting the environment.
These rules — known in bureaucratic gobbledygook as the "New Source Performance Standards OOOOa" — established plenty of reasonable controls: certification of vent systems, caps on emissions volumes, safety rules for storage vessels, and so on.
However, these standards also set up some unnecessary mandates without any environmental purpose. One particularly egregious example? Both state and federal regulators can conduct their own, separate environmental reviews of drilling rigs. Imagine having to get your driver's license from both a state and federal DMV: two driving courses, two eyesight exams, two written quizzes, two driving tests. That's the mindless repetition many gas operations currently face.
Likewise, the standards require new emissions technologies to be approved at each site where they're used. What if the federal government had to approve every single iPhone sale, certifying that each device was safe to use for each individual customer? That would be an extraordinarily expensive, time-consuming process — and would clearly be unnecessary. Once the iPhone has been deemed safe for one consumer, it's effectively safe for all.
The same goes for emissions reduction equipment. One evaluation ought to be enough.
These excess rules sap time and capital that could be put towards building new rigs and further expanding production.
Companies are spending money on compliance that could be going towards new jobs and higher salaries. The oil and natural gas industry accounts for nearly 8 percent of national GDP — hampering its operations hurts the economy as a whole.
In September, the EPA announced it would be reforming the methane rules, selling its efforts as a serious streamline. Andrew Wheeler, the acting EPA administrator, called them "common-sense reforms (that) will alleviate unnecessary and duplicative red tape."
But this package simply ignores the major sources of duplicative regulations. Regulators whiffed on a rare opportunity to provide serious economic relief to an industry that puts Americans to work and keeps their utility bills low.
That failure has environmental costs as well.
For most of the last century, coal was the main source for electricity generation. Natural gas is a natural, cheaper replacement for coal, and the recent production boom has prompted power plants to switch over. Natural gas emits about half as much carbon as coal. So this migration has led to a precipitous drop in electricity-related emissions.3 comments on this story
According to the U.S. Energy Information Administration, total annual emissions have fallen 14 percent since 2005 "mainly because more electricity has been generated from natural gas than from other fossil fuels."
By smothering the growth of the gas industry, these excessive rules slow down this transition and keep electricity-related emissions artificially high.
There's still time for the EPA to make good on its promises, as this "reform" package has not been finalized. Regulators ought to cut the red tape and allow the natural gas industry to power the American economy to new heights.