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Trump has backed away from regulating methane. Now industry says it will reduce emissions itself.

December 7, 2017

Amid an effort by the Trump administration to ease rules on the oil and gas sector, 26 companies said they will take voluntary steps to ratchet down emissions on a potent greenhouse gas the Obama administration tried to regulate.

This week, the American Petroleum Institute, the largest oil and gas lobbying group in Washington, announced the launch of a program aimed at reducing emissions of methane from oil and natural gas production.

“The program overall is set up to continuously improve the environmental performance for onshore operators throughout the country through the process of learning, collaborating and taking action,” said Erik Milito, director of upstream and industry operations for API. “This is a very robust program.”

However, some environmental groups called the initiative, titled The Environmental Partnership, too little, too late given the industry’s embrace of Trump’s deregulatory agenda.

“It’s somewhat amazing that the industry hasn’t already put forward its own standard,” said Chase Huntley, director of energy and climate at The Wilderness Society.

Oil and gas firms participating in the program, which includes such heavyweights as Chevron, BP, Royal Dutch Shell and ExxonMobil onshore subsidiary XTO Energy, have agreed to cut pollution by monitoring and repairing leaks and replacing or retrofitting “high-bleed” pneumatic controllers, identified by the Environmental Protection Agency as a top spot for the release of methane. “It’s a very targeted, surgical approach,” Milito said.

Methane is between 28 and 36 times more effective than carbon dioxide at warming the atmosphere over a 100-year time period, according to the EPA. The measures are also meant to curb the release of volatile organic compounds, which can act as a precursor to ground-level ozone, a component of smog linked to heart and lung problems.

The voluntary program, in which 23 of the top 40 U.S. natural gas producers by volume are participating, focuses on the process of producing natural gas, not the final product - that is, not on the amount of methane actually released into the atmosphere. Under the program, API will publicly report on its progress, with the first report coming in 2019.

Energy firms have a financial incentive to work together, as they are under this program, to capture as much methane as possible. Because methane is the main component of natural gas and can be burned for fuel, every molecule of methane emitted is lost energy - and lost revenue.

The Obama administration, through rules issued by the EPA and the Interior Department, attempted to rein in methane emissions. But President Donald Trump has put both agencies’ policies under review, a move API and other industry players welcomed.

For example, the Bureau of Land Management, finalized a rule in late 2016 designed to curb the practice on public lands of venting and flaring - or burning off some gas as it arises from a natural gas well - that the new API program leaves unaddressed.

After Congress narrowly voted against repealing the BLM rule, Interior decided to take action itself. It’s expected to announce a two-year delay in the implementation of that rule before the end of the year, according to Huntley from The Wilderness Society.

“We suspect the timing is not coincidental with the administration’s next step of seeking to significantly revise the rule,” Huntley said of API’s announcement.

The launch of API’s program follows a similar announcement earlier this month by eight large oil firms, including Exxon, BP and Shell, that they would significantly shrink the amount of methane emitted across the natural gas supply chain.

“For years, many in industry have argued against government action to address their climate impact, touting voluntary corporate pollution reductions as a substitute for regulations,” Environmental Defense Fund, an environmental group that helped those firms develop that plan, wrote in a blog post.

EDF says there is one important difference between the two initiatives: Their plan emphasizes that “regulations are needed,” while API’s does not. “We’re looking at this outside of the regulatory scope,” API’s Milito said.

“The last several months have produced a number of good examples of what leadership in reducing methane looks like,” said Matt Watson, EDF’s associate vice president of climate and energy. “At a time when API is aggressively putting its full weight into tearing down federal methane rules, this weak initiative does little to show that API is serious about tackling the methane problem.”

The divide: Compliance with regulations is more costly for independent operators extracting gas domestically than it is for such multinationals as Exxon, BP and Shell. In general, while industry giants may prefer watered-down rules, smaller players are more likely to favor little to no regulation at all.