Editorial: Methane regs another drain on economy

The Detroit News

As it nears its end, the Obama administration is accelerating its onslaught of regulations, particularly with regard to the country’s energy industry. As part of its overall effort to curb climate change tied to burning fossil fuels, last week the Environmental Protection Agency issued first-ever federal rules to curb methane emissions from oil and natural gas wells.

But the regulations — which aim for a 45 percent reduction in methane by 2025 from 2012 levels — aren’t necessary. Over the past decade, the oil and gas industry has cut methane emissions 50 percent from field production of natural gas, according to the EPA’s own inventory of greenhouse gas emissions.

And there’s every reason to believe methane emissions will continue to fall.

Methane is the primary component of natural gas, and when these oil and gas producers are drilling for their main product, they want to capture as much methane as possible. It has considerable value.

There’s an inherent incentive for them to do the very thing the federal government will now mandate they do. The federal standards will simply impose onerous costs to achieve a goal the industry could very well meet, and has been meeting, on its own through ingenuity and innovative technologies.

The rules, which currently only apply to new oil and natural gas wells, require companies to install technologies to limit and monitor methane emissions during the production and transmission of natural gas.

The new regulations will add somewhere between $500 million and $1 billion in costs annually to an industry that is already struggling under the weight of other costly regulations and a saturated market.

And it’s just the beginning.

The EPA has also stated it intends to issue regulations for oil and gas wells that already exist, a much more burdensome and expensive attempt. The agency is preparing draft requirements for companies to provide information about their activities involving oil and gas, including production, transmission, processing and storage, EPA Administrator Gina McCarthy said in March.

Those tentative regulations could affect hundreds of thousands of existing wells throughout the country. The EPA is justifying it under the Clean Air Act.

This kind of overregulation has become the norm. Three times now the Obama administration has issued over 80,000 pages of regulations in a year. In 2008, the last year of the George W. Bush administration, the Federal Register came close to breaking the 80,000-page mark. In 2007, the Federal Register actually decreased by almost 4 percent from 2006 levels.

For the second year in a row, those regulations will impose $1.9 trillion of annual costs on the economy.

That’s a huge chunk that’s being removed from national GDP — and the trend lines aren’t good.

Regulations such as these latest methane standards are often unnecessary because industry is already achieving the goal the government wants. The feds simply want the control. But that comes with a huge, and growing, cost to a struggling U.S. economy.