Obama considers new climate regulations for oil, gas sector

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The White House said on Friday it will take a hard look at whether new regulations are needed to cut emissions of methane from the oil and gas industry, part of President Barack Obama's plan to address climate change.

The suggestion drew a sharp rebuke from the main oil and gas lobby group. The American Petroleum Institute said its members were already taking steps that will cut emissions and expressed concern that more regulations could put a damper on natural gas drilling by raising costs.

But environmental groups said regulations are needed to make sure all players take action to reduce methane emissions. The greenhouse gas is 84 times more effective than carbon dioxide at trapping heat in the first 20 years after being released, according to the U.N. Intergovernmental Panel on Climate Change.

The White House said regulators will propose new rules later this year to reduce venting and flaring from oil and gas wells on public lands, one way to begin cutting emissions of methane.

However, most oil and gas production takes place on privately owned land. So the Environmental Protection Agency is going to study this year whether additional, broader regulations are needed for methane emissions under the Clean Air Act, said Dan Utech, Obama's top energy and climate aide.

If the agency deems more regulations are needed, they will be completed before Obama leaves the White House at the end of 2016, Utech said.

Obama has said he wants to cut U.S. greenhouse gas emissions to 17 percent below 2005 levels by the year 2020.

"This methane strategy is one component, one set of actions the administration is going to take to get there," Utech told reporters on a conference call.

Colorado A Model?

Methane is the main component of natural gas. It is also released by dairy farms, landfills and coal mines.

The EPA will propose additional regulations for methane produced by new landfills in coming months, and will consider updating rules for existing landfills, the White House said.

Next month, regulators will gather comment on developing a program to curb methane emissions from coal mines on land leased from the federal government.

The government will also work with the dairy industry on voluntary measures to cut emissions from their barns, the White House said.

But the biggest part of its strategy looks at how to stop leaks of methane from natural gas wells and pipelines, which the White House said was responsible for 28 percent of U.S. methane emissions in 2012.

Recent studies have found that U.S. methane emissions have been higher than estimated by the EPA. A study led by Stanford University last month said emissions of the gas from the U.S. natural gas supply chain were nearly two times higher than current estimates.

The Environmental Defense Fund (EDF), an advocacy group, said the administration could look to Colorado's tough new rules to limit air pollution from oil and gas drilling as a model.

The rules, approved in February, emerged from a deal struck between the EDF and energy producers Anadarko Petroleum, Noble Energy, and Encana Corp.

"We know from the information that's out there that what the EPA will find is there are abundant opportunities to deal with this problem right now with technologies that are at hand and inexpensive to implement for the oil and gas industry," said Jeremy Symons, the EDF's senior director for climate policy, on a conference call with reporters.

The EPA in coming months will issue a series of "white papers" to look at the technology and evaluate its options, determining later this year whether regulations are needed.

The Clean Air Task Force, a health and environmental group, said it was cautiously optimistic more regulations were in store.

"We applaud this strategy as a good first step by the administration, but it doesn't commit them to reaching the end of that road," said Conrad Schneider, advocacy director for the group.

The American Petroleum Institute said it expects the EPA will find that additional regulations are not required.

By January 2015, natural gas wells will be required by existing EPA regulations to use technology to reduce air pollution, including methane emissions, Howard Feldman, the lobby group's director of regulatory and scientific affairs, said in a telephone interview.

As the United States enjoys a boom in natural gas production many power plants have switched to the fuel, which releases half as much carbon dioxide as coal when burned.

"Somewhere that's gotten lost," Feldman said.

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