As IHS Markit’s CERA Week, the world’s premier gathering of executives and ministers to discuss energy, environment, and climate, comes to a close it is clear climate change will – as Biden promised – take center stage in this administration. Unfortunately for the American people, Biden’s actions on methane emissions, as well as other climate change policies, are based on unfounded fears, not on facts.
In articles about the EPA’s replacement of Obama-era methane regulations, the first thing we usually read about methane is that it is a “super-pollutant” because each molecule we emit traps 25 times as much heat in the atmosphere as CO2 over a 100 year period.
But while methane, also known as natural gas, is a greenhouse gas that contributes to mildly increasing global temperatures, it is not a pollutant in the sense of soot or smog, which cause direct harm to human health. Like CO2, it is biologically inert. It is also incredibly useful for heating our homes, cooking safely, producing electricity, and providing the feedstock to create thousands of products that we use every day.
So why did the Obama EPA, under the Clean Air Act, choose to regulate methane emissions in the same category as those other pollutants? And why is the Biden administration likely to follow in those footsteps?
The given answer is that methane’s ability to trap heat contributes to climate change and that methane is one of many precursors to the formation of smog. The Obama EPA cited these reasons when it promulgated the final rule in 2016. However, its arguments for the significance of methane’s contribution to temperature change and to ozone formation, which are crucial to its ability to regulate methane under the Clean Air Act, fall flat upon closer inspection.
If the U.S. eliminated all of its methane emissions by 2050, climate models used by the EPA estimate that average global temperature in 2100 would be 0.03 degrees C lower. About 30% of U.S. methane emissions come from the oil and gas industry, so the significance of those emissions is even less. The EPA recently finalized a rule concluding that any stationary source of greenhouse gases that emits less than 3% of total U.S. emissions is not significant enough to warrant regulation under the Clean Air Act. The rule specifically cites emissions from oil and gas production and transport as falling below this standard.
While methane is known to increase ground-level ozone, a.k.a. smog, over long time-scales, the effect is global in nature and difficult to measure. Therefore, the EPA did not even try to quantify the benefits of reducing methane emissions on ozone pollution levels. Plus, ground-level ozone is already regulated under the Clean Air Act.
Given the negligible environmental benefits of the Obama-era methane regulations, the only true consequence would have been the cost, estimated at more than $500 million annually by 2025. Furthermore, the 2016 rule tried to force technology that was meant for large high-volume facilities on small facilities, without sufficient research to prove that such technology would have a positive impact. These actions would have put a disproportionate burden on small businesses.
Fortunately, the EPA reversed these requirements in August 2020 and chose only to regulate emissions of volatile organic compounds (VOCs). Efforts to eliminate VOC emissions also address methane emissions because natural gas flows as a stream, not as separate components. As a result, the EPA estimates that the new rule will alter the emissions reductions projected from the 2016 rule by only a few percent a year, while cutting costs by over $100 million per year over the next 10 years.
Another key point missing from the hype about methane emissions is that even without direct regulation, emissions from the U.S. energy sector have declined 30% since 1990. Because methane has economic value, companies have a natural incentive to capture as much of it as is economically feasible. That is why many American companies, such as ExxonMobil and Chevron, which have the technology and the economic means, are voluntarily working to reduce methane leaks. Additional regulations will only make American energy more expensive and drive more oil and gas production to countries with far fewer environmental protections.
It is impossible for us to protect our environment without freedom and prosperity, and our global environment will benefit the most when our governments allow energy producers and consumers, not regulatory bureaucracies, to determine our energy future.