Obama Administration Proposes Limits On Methane Emissions

Date: January 25, 2016

Interior Department Regulations To Cost Oil, Gas Industry Hundreds Of Millions Annually

The Interior Department on Friday announced proposed regulations to reduce methane emissions on or near federal land, with the Washington Post describing the move as “a step … toward plugging thousands of small methane leaks from oil and gas operations around the country” because of concerns that “the escaping gas is contributing to climate change.” The proposed regulations “would require energy companies to reduce methane leaks in order to drill anywhere on land owned” by the US government or Native American tribes — about 100,000 oil wells that supply 10% of the country’s natural gas. The AP said the measures proposed by the Bureau of Land Management “would require oil and gas producers to limit the rate of flaring at oil wells,” conduct regular inspections for leaks, and “replace outdated equipment that vents large quantities of gas into the air.” According to Reuters, the BLM estimates the new rules will prevent the loss of as much as 56 billion cubic-feet of gas annually, which is enough to power about 760,000 households for a year, while averting emissions equivalent to as many as 4.2 million metric tons of carbon dioxide. The New York Times called Friday’s announcement the “latest step by President Obama to use his executive authority to clamp down on the fossil fuel emissions that contribute to climate change, and make it more expensive for oil, gas and coal companies to mine and drill on public land.”

What Happens Next

The Wall Street Journal reported that the rules are expected to be completed later this year, following a public comment period, with implementation to be phased in over three years. According to the Interior Department, the measures are expected to cost the industry $125 million to $161 million a year.

What This Means For Small Businesses

Small businesses always bear the brunt of cost burdens when the government decides to pursue aggressive regulations. The latest Interior Department proposal will cost the oil and gas industry hundreds of millions annually, and these costs will harm small businesses that contract with larger oil and gas companies or otherwise provide goods or services for the oil and gas industry and its workers.

Additional Reading

Bloomberg News also covered the story.

Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.

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