New Methane Rules Will Curb Emissions, but the EPA Still Has to Measure Them Accurately

The Environmental Protection Agency’s new rules for methane emissions from new oil and gas production, released on Thursday, will cost the industry around $530 million a year by 2025 while providing $690 million annually in climate benefits, according to the agency. Unsurprisingly, oil and gas producers, who are suffering under the lowest prices in close to a decade, disputed those estimates: the American Petroleum Institute said the regulations will cost the industry more than $800 million a year.

While the announced regulations will apply only to new wells and infrastructure, the EPA is already crafting a set of rules for existing production. Once in place, the full suite of regulations should reduce annual emissions of methane—a far more potent greenhouse gas than carbon dioxide—by 510,000 tons in 2025.

Estimates of the costs and reduced emissions are complicated, though, by the fact that measuring methane leakage is at best an inexact science. The EPA forecasts that emissions will increase by 25 percent over the next decade. But an analysis by Energy in Depth indicates that the EPA’s own figures show that, while more than 86,000 new oil and gas wells were drilled in the U.S. between 2005 and 2012, methane emissions from the industry actually fell by more than 22 million metric tons. On the other hand, a paper published last year in the journal Earth Science & Engineering found that methane leaks may be sharply underestimated because of flaws in the technology that’s commonly used to measure them.

What’s not in doubt is that the new rules will raise costs for producers, helping to slow new drilling by a U.S. oil and gas industry that's already staggering. Reuters reported that more than 50 North American oil and gas producers have gone bankrupt since early 2015, and up to one-third of U.S. shale gas producers are at risk of failure this year, according to Deloitte.