EPA chief takes first step in reversing Obama-era methane rule

WASHINGTON (Bloomberg) -- U.S. environmental chief Scott Pruitt announced plans to roll back an Obama-era methane rule expected to cost oil and natural gas operators $320-$530 million a year.

The Obama administration finalized the regulation in June, imposing the first-ever federal standards to limit methane emissions from the oil and natural gas sector. The rule sought to curb methane leaks from new and modified wells, with the goal of reducing yearly emissions by 6.9 million metric tons of carbon dioxide-equivalent.

The Environmental Protection Agency will reconsider the regulation in response to industry objections, Pruitt wrote in a letter to the American Petroleum Institute and other petitioners opposed to the regulation. The EPA will also issue a 90-day administrative stay on part of the rule, which calls for operators to submit emission monitoring surveys by June 3.

“EPA is continuing to follow through with President Trump’s Energy Independence Executive Order,” Pruitt said in a statement Wednesday. “American businesses should have the opportunity to review new requirements, assess economic impacts and report back.”

Pruitt in March withdrew another Obama-rule initiative aimed at cutting emissions from the sector. That rule asked oil and gas operators to disclose information on leaks at their facilities, as part of an effort to develop a regulation that would govern existing oil and gas wells. 

EPA should have a discussion with oil and gas companies about how methane can be captured “without trying to burden industry,” Pruitt said last month at the CERAWeek by IHS Markit conference in Houston, the biggest yearly gathering of oil and gas companies.

Pruitt is also reconsidering an EPA initiative to cut water pollution from power plants, and has said his agency should not defend Obama’s carbon rules in court.