President Obama’s Methane Rule Threatens to Stymie U.S. Energy Growth and Innovation

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Posted by Justin Sykes on Tuesday, January 19th, 2016, 10:00 AM PERMALINK


In 2015 President Obama and his EPA cronies unveiled a plethora of new regulations that will surely send energy costs skyrocketing and stymie the ongoing renaissance in U.S. energy development. Regulations such as the Clean Power Plan, Ozone Standard, and the Waters of the U.S. Rule all pose a threat to efficient and affordable energy. On top of these costly new rules, President Obama will use the EPA in 2016 to once again impose his regulatory agenda on the American consumer and energy industry.

For 2016 the EPA is set to push new regulations to cut methane emissions once again targeting the already overregulated energy industry. According to the EPA’s own estimates, this new rule will cost $180 to $200 million in 2020, with costs possibly reaching $500 million in 2025.

To achieve its goal, the EPA is expanding its regulatory powers over a vast array of equipment not previously under its control. Under the EPA’s expanded powers, energy producers will be forced to install highly expensive equipment on new operations, the costs of which will inevitably be passed onto consumers in the form of higher energy rates.

These new rules would especially harm the boom in natural gas production the U.S. has experienced, which has created huge economic growth in the past few years. In 2012 alone the industry boosted the economy by $284 billion and supported over 2 million jobs. The new set of EPA rules threatens to stymie such momentous economic growth.

The EPA’s methane rule is quite simply a regulation for regulations sake. According to the President’s own EPA, the U.S. natural gas industry has successfully cut methane emissions by 11 percent in recent years, even as gas production has increased 44%. During that same period methane emissions from hydraulically fractured natural gas wells are down 79 percent.  

The industry has accomplished these reductions through investment and innovation in new technology. Because of such innovation, researchers estimate that less than 2% of methane is lost during natural gas production. 

However by seeking to impose new methane rules on the industry, the President and EPA will effectively deter further innovation and improvement by the energy industry. Such government overreach and intervention in the market will interrupt the drive to continue these advances by diverting attention away from innovation back towards regulatory compliance.   

The energy industry is complex and varies greatly across different operations. The industry’s efforts to reduce methane emissions, without directly regulating methane, dwarf the emission reductions EPA has estimated in their rules. The bureaucrats at the EPA simply cannot match the expertise and knowledge of industry experts.

Lawmakers should be aware that the President’s regulatory agenda, in particular the new methane rule, is nothing more than a thinly veiled attempt at preserving his personal legacy at the expense of the consumers and the American economy. 

 

Photo credit: Erik Kamfjord

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