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The White House Whiffs on Energy Reform

White Mountain Independent

The Environmental Protection Agency just announced a plan designed to reduce the number of regulations saddling the natural gas industry.

The intention is sound. Natural gas has become a critical component of the U.S. economy, powering our homes and offices and supporting millions of jobs. Easing regulations could help this industry reach new heights. But the plan won't succeed — as it'll keep many of the rules that are unnecessary and duplicative in place.

Natural gas production does pose some unique risks, chiefly from gas leaking out of the drilling and storage equipment. A key component of natural gas is methane, which is more potent than CO2 in terms of its potential contribution to global warming.

The natural gas industry has ample incentive to fix the problem on its own — when a rig leaks gas, it might as well be leaking money, since methane itself is a sellable product. That's why, over the past two decades, natural gas producers have invested more than $90 billion to develop new emissions-reducing technology.

These investments have worked. As natural gas production has expanded, methane emissions have dropped. From 1990 to 2015, domestic natural gas output spiked more than 55 percent, yet methane emissions from natural gas production fell over 16 percent.

Two years ago, federal regulators decided to establish some formal rules for methane emissions. Regulators hoped that the rules would empower public inspectors to ensure that gas rigs are minimizing leaks and protecting the environment.

These rules — known in bureaucratic gobbledygook as the "New Source Performance Standards OOOOa" — established plenty of reasonable controls: certification of vent systems, caps on emissions volumes, safety rules for storage vessels, and so on.

However, these standards also set up some unnecessary mandates without any environmental purpose. One particularly egregious example? Both state and federal regulators can conduct their own, separate environmental reviews of drilling rigs.

Likewise, the standards require new emissions technologies to be approved at each site where they're used. That would be an extraordinarily expensive, time-consuming.

The same goes for emissions reduction equipment. One evaluation ought to be enough.

These excess rules sap time and capital that could be put towards building new rigs and further expanding production.

Companies are spending money on compliance that could be going towards new jobs and higher salaries. The oil and natural gas industry accounts for nearly 8 percent of national GDP — hampering its operations hurts the economy as a whole.

In September, the EPA announced they'd be reforming the methane rules, selling their efforts as a serious streamline.

But this package simply ignores the major sources of duplicative regulations. Regulators whiffed on a rare opportunity to provide serious economic relief to an industry that puts Americans to work and keeps their utility bills low.

That failure has environmental costs as well.

Natural gas is a natural, cheaper replacement for coal and emits about half as much carbon. According to the U.S. Energy Information Administration, total annual emissions have fallen 14 percent since 2005 "mainly because more electricity has been generated from natural gas than from other fossil fuels."

There's still time for the EPA to make good on its promises, as this "reform" package has not been finalized. Regulators ought to cut the red tape and allow the natural gas industry to power the American economy to new heights.