Pruitt Nibbles at Methane Rule; Are Larger Bites to Come?

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By David Schultz

EPA Administrator Scott Pruitt launched a surprisingly narrow attack on Obama-era regulations limiting methane emissions from the oil and gas industry, but a more expansive attempt to repeal the regulations may be coming further in the future, according to industry insiders and observers.

Pruitt said in an April 18 letter that his agency will grant a request from fossil fuel industry trade groups and reconsider the regulations, which were finalized last summer. In the letter, Pruitt said the reconsideration will focus on the parts of the methane rules that he said the public wasn’t able to fully comment on before the rules were finalized.

By limiting the scope of this reconsideration, Pruitt may be signaling that he intends to modify the regulations rather than rescind them outright, according to James Goodwin, a senior policy analyst with the Center for Progressive Reform who specializes in administrative law.

“This doesn’t really get at the heart of the rule like I thought it might,” he told Bloomberg BNA.

Methane Rules

EPA spokeswoman Liz Bowman told Bloomberg BNA in an email, “All we are doing at this time is telling businesses ... that we intend to reconsider the rule. We can’t speak to whether the rule would be tweaked before we have a chance to formally reconsider it.”

However, Pruitt’s letter specifically avoids promising to rescind the methane rules, one of the centerpieces of the Obama administration’s climate change policy, as methane is a potent greenhouse gas.

In a March 28 executive order on climate and energy policy, President Donald Trump specifically instructed the EPA to immediately review any agency actions that “potentially burden the safe, efficient development of domestic energy resources.”

These regulations only apply to methane emissions from new and modified oil and gas wells. They require the well owners to take a number of measures to search for leaking methane and then repair any leaks that are found.

Compliance Deadlines

Though the measure was finalized last year, one of its key sections doesn’t go into effect until June of this year: a requirement that all well owners use an infrared camera at least once a quarter to search for leaks and then document what they find. In announcing the reconsideration, Pruitt also pushed back this compliance deadline by three months.

James Elliott, an attorney representing the Independent Petroleum Association of America, a coalition of small drilling companies, said this will impose huge costs on his clients. He said Pruitt likely acted now on the reconsideration to avoid forcing companies to comply with a rule that may eventually be rescinded in the future.

“That’s why you’re seeing this now,” Elliott, who is with the firm Spilman Thomas & Battle PLLC’s Harrisburg, Pa., office, told Bloomberg BNA. “I suspect that there will be other aspects of rule that will be evaluated.”

Mark Brownstein, an executive vice president with the Environmental Defense Fund, which has advocated for methane regulation, said even a three-month delay is significant at a time when petroleum prices are rebounding.

“Every month that goes by where these ... are not in place is another month where methane is wasted and needless waste and pollution occurs,” he told Bloomberg BNA.

Court Battle

In addition to the reconsideration, the rules are also being challenged in federal court by the energy industry. The EPA has asked the court to pause this lawsuit while it weighs how to ultimately handle these methane leak requirements.

Lee Fuller, executive vice president of the Independent Petroleum Association of America, said this may be another reason why Pruitt decided to act on this now with a narrow order, rather than wait to issue a more comprehensive repeal of the rules.

“They are showing to the court that, even though they’re seeking an abeyance, that they’re also in the process of addressing the issues that were identified to them,” he told Bloomberg BNA.

Regardless of what ultimately comes of the reconsideration that Pruitt announced today, whether it’s a narrow tweak or a wholesale repeal, Goodwin said it won’t prevent the Trump administration from revisiting this rule down the road.

“This doesn’t preclude the EPA from initiating a new rulemaking process or writing a new rule,” he said. “It does give them a unique method for halting the entire thing while they decide what to do.”

To contact the reporter on this story: David Schultz in Washington at dSchultz@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com

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