Darren Woods, chairman and chief executive officer of Exxon Mobil, during the Summit on Methane and Other Non-CO2 Greenhouse Gases on day three of the COP28 climate conference at Expo City in Dubai.
Vicki Hollub, CEO of Occidental Petroleum, speaks during a session on eliminating methane emissions at the COP28 U.N. Climate Summit.
The CPS Energy Calaveras Power Station in San Antonio.
An oil and gas storage facility in the Eagle Ford Shale.
Vice President Kamala Harris, speaks during the Summit on Methane and Other Non-CO2 Greenhouse Gases on day three of the COP28 climate conference at Expo City in Dubai on Dec. 2.
Majid Jafar, chief executive officer of Crescent Petroleum Co., right, gives Sultan Ahmed Al Jaber, chief executive officer of Abu Dhabi National Oil Co. (ADNOC) and president of COP28, center, a scarf in the colors of the United Arab Emirates national flag during the Summit on Methane and Other Non-CO2 Greenhouse Gases at the COP28 climate conference at Expo City in Dubai.
Words are cheap, action is hard and new rules around one of the most potent greenhouse gases are putting oil and gas company climate pledges to the test.
President Joe Biden’s Environmental Protection Agency rolled out new regulations for methane, the principal component in natural gas. The amount of methane in the atmosphere has risen by 150% since 1750, making it the second-most human-released, heat-trapping gas after carbon dioxide.
Oil and gas operations are primarily responsible for methane releases, and dozens of corporations have pledged to slash emissions. The new EPA rule would stop routine flaring, where companies burn the gas instead of capturing and selling it.
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Predictably, the industry did not welcome the rules requiring them to keep their promises. Tim Tarpley, president of industry lobbyists Energy Workforce, said the group supports lowering methane emissions, but the EPA rule would serve as a tax on the industry.
“The implementation of a new tax on the oil and gas industry will directly impact the ability of Americans to obtain energy to fulfill daily needs, increasing the cost of oil and natural gas prices and decreasing domestic energy security,” he said. “As global energy demand continues to skyrocket in the face of instability overseas, overburdensome regulations are not the answer to reducing methane emissions. Technology and industry-led initiatives are.”
The American Petroleum Institute, the industry’s leading lobbyist, said it was studying the rule, which means it is polling its members before launching a broadside attack.
“To be truly effective, this rule must balance emissions reductions with the need to continue meeting rising energy demand,” Senior Vice President of Policy, Economics and Regulatory Affairs Dustin Meyer said.
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API hesitated because the Biden administration’s announcement came on the same day that 50 of the world’s largest fossil fuel companies announced the “Oil & Gas Decarbonization Charter” at the U.N. climate conference in Dubai. The charter is the premier emission reduction initiative from Saudi Arabia and the conference’s chairman, Sultan Ahmed al-Jaber, who happens to be the CEO of the United Arab Emirates’ national oil company.
The charter is a voluntary commitment to phase out methane emissions and flaring by 2030. The signatory companies, which include Exxon Mobil and Chevron, represent 40% of the world’s oil and gas production.
Phasing out methane emissions will be tough in Texas, where all three elected energy regulators deny humans are causing climate change. Texas oil and gas operators released or burned 564 billion cubic feet of methane in 2019 valued at $1.7 billion, and Texas wells accounted for nearly half of the flaring in the United States, the Environmental Defense Fund reported.
Drillers in Texas drill primarily for oil, but almost every well includes some natural gas that leaks out in the process. Loading oil onto trucks is easy, but transporting natural gas to market requires a pipeline. The Railroad Commission of Texas routinely allows operators without easy access to a pipeline to burn the gas with a flare.
Flares pollute the air and often malfunction. Older gas-gathering systems leak enormous amounts of methane. Smaller companies do not repair or upgrade their equipment to keep costs low in the absence of regulation.
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Half the nation’s leaked methane comes from small companies with low production that would probably shut in their wells rather than spend the money to plug the leaks, the Department of Energy reported. Those small operators are politically influential in Texas.
The new EPA rule requires state regulators to enforce the regulations. However, Railroad Commission Chair Christi Craddick declared during the public comment period in February that the methane rules were overreaching and unrealistic.
Craddick and Attorney General Ken Paxton have hinted they would ask a federal judge to declare the rules unconstitutional, leveraging a recent Supreme Court ruling that limits how much a federal agency can do without express congressional approval.
We’ll see whether the oil and gas folks responsible for most of their campaign donations will keep giving after committing to lower emissions.
Meanwhile, environmentalists do not think the EPA’s methane rules go far enough.
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“Reducing pollution during their operations is something fossil fuel companies should have been doing for the last 100 years,” said Josh Eisenfeld, corporate accountability campaign manager at Earthworks. “This is not accelerating a transition. It’s just cleaning up what they should have cleaned up in the first place.”
In just the last year, we’ve seen companies back away from their voluntary commitments to speed the transition to clean energy. Executives have repeatedly proven that trust in good intentions is insufficient, and federal law enforcement is necessary to slow climate change.
Chris Tomlinson, named 2021 columnist of the year by the Texas Managing Editors, writes commentary about money, politics and life in Texas. Sign up for his “Tomlinson’s Take” newsletter at HoustonChronicle.com/TomlinsonNewsletter or Expressnews.com/TomlinsonNewsletter.
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