PennFuture Energy Center - Blog
By Rob Altenburg
August 19, 2015
The recently proposed New Source Performance Standards (NSPS) from Environmental Protection Agency (EPA) to curb volatile organic compound (VOC) emissions from the natural gas sector are a good start. The EPA predicts the standards will reduce leaks of methane by 20 – 30 percent below 2012 levels by 2025. They also show that the rule will be highly cost-effective with benefits exceeding costs by as much as $150 million by 2025.
Like many EPA rules, this is a modest step. For sources covered by the existing (2012) NSPS, no additional controls would be required. The major advance here is extending some basic requirements like leak detection and repair (LDAR) to some categories of sources not covered in 2012.
Because this is a modest step, there is plenty of room for improvement. For example, readers may notice that the 20 – 30 percent reduction predicted from this rule is much less than the 40 – 45 percent reduction President Obama set as a target in his Climate Action Plan. Why so much less? It's because this rule leaves control of existing sources up to the industry who, we are left hoping, will make up the difference with voluntary measures.
Will that work?
No, it won't, and we have a lot of experience with this sort of thing. Back in 1966, Henry Ford II claimed in Senate testimony that requiring "unreasonable, arbitrary, and technically unfeasible" safety features such as front seat belts and safety glass in windshields would shut down the industry. In 1973, General Motors vice president Earnest S. Starkman claimed in an EPA hearing that "it is conceivable that complete stoppage of the entire production could occur" if catalytic converters were required. Ford went even further and claimed the catalyst rule would reduce the American gross national product by $17 billion and cause the loss of 800,000 jobs. (Spoiler alert: it didn't.)
To be sure, there were auto manufacturers who undertook voluntary measures. Nash and Ford offered seat belts as options in the mid 1950's and by the late 50's Volvo and Saab had them as standard equipment. Cars even started to appear with mounting points so that owners could buy their own seat belts. But, it's not surprising that the vast majority of cars had none, despite a clear and growing record that they saved lives.
While it's not an excuse for delaying installation of life-saving features, we know that asking a business to take voluntary measures creates a conflict of interest. Even if they want to do the right thing, they have to worry that their competition will opt-out or cut corners to get an advantage in the market.
So, the result was predictable. We didn't get the safety equipment most of us take for granted today until regulations required it.
Is the gas industry different?
Again, No. Not from the evidence we have seen.
Like the auto makers from decades ago, the CEO of the American Petroleum Institute was quoted as saying, "The last thing we need is more duplicative and costly regulation." Instead, they want to go with "voluntary efforts for existing sources." As we saw with auto makers, there are companies that are taking voluntary measures either by adopting federal rules earlier than required or by adopting additional measures of their own. But, for the most part, the outcome is the same: industry-wide, few companies are willing to take meaningful additional steps and voluntary measures don't get the job done.
Lets look at the data
In the 2013 emissions data, the Department of Environmental Protection (DEP) showed a 13 percent reduction in methane emissions. While a reduction is positive news, those reductions come almost entirely from operators phasing in federal requirements for "green completions," which no longer permit uncontrolled release of pollutants as wells are completed. When we look even more closely, we see that those reductions come, for the most part, from a single company (Cabot) reporting lower completion emissions.
If it were not for Cabot's reporting, the remaining natural gas companies would be reporting a 10 percent increase in emissions year-over-year. If we look at the source types that are relying on voluntary measures for reductions (those other than completions), we see a 14 percent increase in emissions. It's no surprise, voluntary measures are not working.
This current EPA action is a proposed rule. Once it's published in the Federal Register, there will be a 60-day comment period where the public and other interested parties can have their say. It's important for EPA and the administration to hear that the public supports the added environmental protections this proposal offers, but it's also fair to add constructive criticism about what the EPA can do better.
While EPA action is one avenue, Pennsylvania doesn't need to rely on the federal government. As the second largest producer of natural gas, it's vitally important that we be a leader in protecting our citizens. The gas industry in Pennsylvania—including the existing sources—can and should be the cleanest and safest in the nation. To make this happen, our leaders in Harrisburg need to hear voices of support.
Read the full article here