In case you missed it – and chances are you did, because virtually no one in the media covered the story – there was a recent report out of Washington that once again underscores the positive role of natural gas in environmental protection.
The U.S. Environmental Protection Agency released its latest greenhouse gas inventory, updating emissions estimates for oil and gas operations. The findings show that methane releases from natural gas production continue to drop:
Those numbers are significant for a lot of reasons.
To begin with, they are absolute evidence that energy companies can and will continue to operate in an environmentally responsible fashion – without intrusive, burdensome government regulations. Keep in mind that these successes were achieved voluntarily. They prove that the industry does not need punitive, politically motivated rules to meet its cleaner-air obligations.
The data also pretty much deflate the hot-air rhetoric coming from critics of both drilling and hydraulic fracturing. Natural gas is a clean-burning fuel, and it can provide a bridge to a clean energy future. Environmentalists may not like that, and they certainly won’t admit it. But facts are facts, and when those facts come from an EPA that has the energy industry in its crosshairs, their relevance cannot be denied.
Finally, and along those same lines, the EPA estimates reinforce the impact that natural gas is having on overall carbon emissions. CO2 releases have been plummeting and are now at a 20-year low. Anyone who doesn’t believe that natural gas – and especially its increased use in electricity generation – has not contributed in a big way to that decline just isn’t paying attention.
Of course, none of this is likely to have any effect on EPA’s upcoming methane rules, which are scheduled to be proposed this summer and become effective in 2016. That’s interesting, too, given that the agency’s latest report acknowledges the reduction in emissions was in part due to voluntary efforts by the industry.
So much for the “if it’s not broke, don’t fix it” theory.
It’s been said before, but bears repeating: When the government pursues expensive, unnecessary policies that target oil and gas development, it risks crippling an industry that – even in the current price climate – is still an economic force. That’s unfortunate.
But to do it despite clear evidence that the industry is already pretty much accomplishing what the rules would mandate? That’s not just unfortunate. It makes no sense at all.
Richard L. Burleson
With the release last week of hydraulic fracturing rules for federal and tribal lands, the Obama administration has shown once again how White House rhetoric trumps reality when it comes to domestic energy policy.
On Friday, the Interior Department unveiled the new regulations, which will become effective in 90 days. They include language that imposes stricter rules on wastewater management and cement well casings, and a requirement that chemicals used in the process be posted on FracFocus.org.
The rules are so wrong, on so many levels, that it boggles the mind.
To begin with, states are already doing a good job at drilling oversight. There hasn’t been a single proven instance where fracking has tainted water. That sends a strong message that there’s no justification for the feds to step in and usurp what should be a state responsibility. What’s more, in states like North Dakota that already have disclosure rules, it could add a costly, time-consuming, unnecessary layer of regulation.
Speaking of government overreach, the rules are tougher than those that exist in most states. For example, they require that wastewater now has to be secured in covered tanks prior to permanent disposal rather than in pits. Ten states have similar requirements. So the federal government is now basically superseding rules in the other 40 that to date have been working pretty well.
Beyond that, compliance costs are expected to run about $11,400 per well. To the majors, that may not seem like much. But it will have an impact on smaller, independent companies that are already struggling in the current price environment. That’s ironic given that the White House has repeatedly voiced its support for small businesses. Apparently, that support doesn’t extend to small businesses in the energy industry.
The paperwork demands of the rules will probably increase the length of time required to process drilling applications, too. Right now, with the Saudi price war on U.S. shale companies slowing activity, that’s probably not a huge concern. But when prices do come back, and the declines in output are reversed, it could be.
Which brings me to the subject of timing. Issuing rules that add costs when oil prices have dropped 50 percent and natural gas prices are low makes absolutely no sense.
When you add all of this to the fact that the White House has shown no real inclination to lift the ban on crude exports; that it has shown no interest in allowing a waiver of the Jones Act to facilitate shipment to light, sweet crude to U.S. refineries equipped to handle it; and that it continues to target oil and gas companies by pushing punitive tax policies, one thing is clear:
For all its talk about the benefits of the U.S. energy revolution, this administration is more interested in crippling the boom than in sustaining it.
Let’s s face it, these rules are less about fracking than they are about fear. Because fracking, done responsibly, is safe. A number of former White House officials – including ex-EPA administrator Lisa Jackson, ex-Energy secretary Kenneth Chu, and ex-Interior secretary Ken Salazar – have all said as much. But the environmental community has successfully pushed the White House into advancing policies based on a doomsday “what if” scenario rather than on a real-world, fact- and science-based “what is” scenario.
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