The Trump administration drove a wedge into the U.S. fossil industry last week with a proposal to roll back Obama-era regulations to control climate-busting methane emissions from oil and gas wells, pipelines, and storage facilities.
“The EPA is claiming the changes would save the oil and gas industry US$17 to $19 million a year, or up to $123 million by 2025,” The Guardian reports. “Agency Administrator Andrew Wheeler, a former [fossil] energy lobbyist, said methane is valuable so industry already has an incentive to minimize leaks. He called existing rules ‘unnecessary and duplicative’.”
But “if the EPA manages to finalize and implement this illegal proposal, it will have devastating impacts on our climate for years to come,” countered Clean Air Task Force attorney Darin Schroeder, who said the rollback plan ignored past precedents and mountains of evidence. The climate impact of the announcement would be the equivalent of “dumping an additional 1.2 million tons of methane into the air in 2025—which will warm the planet as much as the pollution from 22 million cars.”
Janet McCabe, a top EPA official under President Barack Obama, called the proposed rule change a “rejection of the vast—the increasing—body of science that shows that climate change is affecting humans around the globe.”
While the American Petroleum Institute and smaller fossil producers are happy with the rollback, The Guardian says, colossal fossils like ExxonMobil, Shell, and BP supported the methane regulation. The New York Times says that dynamic produced “contradictory voices” following the announcement last Thursday, highlighting at least a tactical split “between those who supported the move as a boon to domestic energy production and others who viewed it as a counterproductive measure that would sully the reputation of natural gas as a clean fuel.”
The crux of the issue, the Times notes, is that methane is 80 times more potent a greenhouse gas than carbon dioxide in the 20 years it takes to dissipate in the Earth’s atmosphere. “Without constraints on harmful emissions, some in the industry feel they will be less effective in arguing that gas should replace coal in generating power,” the Times states. “And that would strengthen the case for favouring sources like wind and solar energy rather than gas to control global warming.”
“What some people in the industry do not get, but others are beginning to get, is that we are transitioning to a low-carbon economy,” said Colorado oil industry consultant Mark Boling, former executive vice president of Southwestern Energy. “If natural gas is going to replace coal, we need to show the climate benefit.”
“It’s for both moral and economic reasons that we should not vent methane or flare,” said Bill Maloney, a former Statoil/Equinor executive vice president who now serves on the boards of two private fossil companies. “Why in the world would we want to make a product that we can sell and then vent it into the atmosphere?”
But the Times coverage shows how quickly the notion of natural gas as a clean energy “bridge” is running its course. “Critics note that the problem of leaks may be underestimated to the point where the environmental benefits of gas have been overstated,” the paper reports. In response, “big companies that propose to ship gas around the world in pipelines and in cooled liquid form want to counter that argument so they can increase exports to countries like India and China.”
Smaller fossils respond that they simply can’t afford the higher regulatory costs. “They want us to comply with extremely expensive equipment and procedures that will hinder us from making a profit,” said Darlene Wallace, president of Oklahoma-based Columbus Oil. “Most people who own marginal wells are rural people, and all the regulation is going to do is take a living away from a lot of people.”
Extreme an impact as Trump’s methane rollback would carry, the split reaction from industry is just the latest indication that his administration’s bare-knuckle, divisive approach to governance is beginning to run its course—within the United States and beyond. “The polarizing politics of climate change have forced companies to choose between supporting the Trump administration’s deregulation policies that could boost profits or opposing them to win over environmentally conscious consumers,” the Associated Press reported last week.
The methane rule was the latest flashpoint. But the news agency cited two earlier examples: major automakers’ support for California fuel efficiency standards against a White House rollback plan, and power utilities’ tepid reaction to lower emission standards for coal-fired power plants.
“Some corporations have acted against conventional thinking by showing a willingness to forego short-term profits in favour of long-term planning and combatting global warming,” AP noted. “But it comes at the risk of hurting their bottom line while also incurring the wrath of Trump on Twitter.”
“It’s particularly a problem for any industry that is capital intensive,” explained Northwestern University marketing professor Tim Calkins. “I think almost every industry where there are long-term investments and there’s a long time horizon, they’re going to be looking at questions around this.”
University of Michigan business and law professor Erik Gordon pointed to companies’ public image as another major factor. “Millions are spent on ads trying to convince consumers that companies are good citizens and aren’t out to destroy the environment,” AP wrote, citing Gordon. “Opposing the deregulation of methane gas discharges that scientists say contribute substantially to climate change should boost oil companies’ image with people who care about the issue.”
“It’s probably more effective than ads showing your employees petting kittens on the head,” Gordon said.
Meanwhile, national leaders attending a recent international summit in France adopted a somewhat similar strategy: with less than 18 months remaining in Trump’s term of office, they’ve apparently resolved to hold their noses and wait him out.
“When Trump skipped a climate change session at the G7 summit last weekend, other world leaders said they were better off without him,” Politico reports. “We know his position…and at the G-7 we did not have [an] objective to convince him to return,” said French President Emmanuel Macron.
“They’re just trying to wait it out and hope he’s not there next year,” said Alden Meyer, director of strategy and policy with the Union of Concerned Scientists.