Oil drillers to accept some EPA rules to avoid curbs on methane

12/5/2014

Oil drillers to accept some EPA rules to avoid curbs on methane

MARK DRAJEM

WASHINGTON (Bloomberg) -- A lobbying group for oil producers including Exxon Mobil and Anadarko Petroleum said, it would accept proposed rules on pollution from oil wells in order to head-off a broad federal standard for methane leaks.

The American Petroleum Institute, which has fought U.S. mandates on everything from smog rules to renewable fuel quotas, said it is willing to meet Environmental Protection Agency limits on the release of smog-forming compounds from hydraulically fractured wells. Such rules are in place for gas wells, and the EPA is considering expanding them to oil wells.

“That’s a far better approach than any regulation towards methane,” said Howard Feldman, Director of regulatory affairs. “If it were done in the right way, it could be something acceptable.”

In what environmental advocates say is the next climate test for President Barack Obama, the EPA is set to announce this month how it plans to regulate methane released in production, transport and delivery. Methane is the second-most emitted greenhouse gas, after carbon dioxide, and it’s 25-times more potent as a global-warming agent.

Environmental advocates are pushing the EPA to regulate methane throughout production and refining, not just when gas and oil are extracted from underground, as the only way to reduce the volumes of gas being leaked.

“We’ve been trying to convince them that you can get much greater tonnage by going the methane route,” said David Doniger, climate Director at the Natural Resources Defense Council. “The indirect approach would not deliver anywhere near that” benefit, he said.

Organic Compounds

The approach API backs would target so-called volatile organic compounds, which are released from the hydrocarbon-rich flow from the well after it’s fracked. Those compounds, such as butane and acetone, can react in the atmosphere and cause smog. Equipment that captures those compounds, however, also grabs methane, and so measures to get the compounds from wells also leads to the reduction in methane released after fracking.

After the gas is prepared to be shipped by pipeline, though, those compounds are removed and rules that don’t specify methane won’t cut emissions of the gas during transit and refining, according to Doniger.

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