wolfEffective this past August 3, the EPA has new regulations for methane and volatile organic compound emissions from oil and gas operations  As you know, reducing methane emissions is a key component of the President‘s climate change agenda.

Why should I care?

Because if you own or operate an oil and gas production, processing, transmission or storage facility, you will be required to comply with the new rule by no later than June 3, 2017. Other than that, don’t worry, be happy, and continue to go about your daily business in blissful ignorance of the impending regulatory burden.

What does it mean?

More expenses for operators of the aforesaid facilities, more demand for good inspectors, more operations for the EPA to meddle in oversee, and a risk of fines for a substantial failure to comply, whether willfully or by inadvertence.

Last weekend I heard Keith Kottrill of Innovative Ventures present a synopsis of the new standards.

The summary is an attempt in 22 pages to capture the spirit and effect of the new rule. It was not prepared by a lawyer and is not intended as a legal analysis. It is the product of Keith and his colleagues who will be implementing and conducting the on-site testing required by the rule. It should be viewed, relatively speaking if you aren’t an engineer, as a good place to begin to understand the rules.

Highlights

  • Get familiar with the term “Quad Oa”, an informal reference to the new rule.
  • There are two main parts of the rule: Control devices or practices must reduce methane and VOC emissions from certain equipment by 95%, and fugitive emission leak detection and repair (LDAR) applies only to well sites and compressor stations.
  • The rule applies to “affected facilities”, specific types of equipment or facilities that are new, modified, or reconstructed after September 18, 2015. Beware, those terms have certain, definite meanings under the rule.
  •  There will be a reporting and paperwork burden.
  • Look forward to quarterly inspections of some midstream facilities.
  • Generally, repairs must be made within 60 days.
  • See pages 13 and 14 for the EPA’s estimated industry-wide costs of compliance, including projected economic benefits. Honk if you believe the costs will be far higher.
  • The rule is based partially on a model called the the “Social Cost of Methane”, and the “methane-related monetized climate benefits” of the rule. Honk twice if you believe those models are based more on ideology than on science.

Time will tell how this rule will work. Among other things, supporters and detractors alike will learn the true extent of methane leakage in our oil and gas infrastructure.

A musical interlude

Today, girl singers you might not have heard of:

 

wolfLast week we discussed why the EPA’s plan to limit methane emissions from existing oil and gas facilities is good. Now we will consider reasons why the plan is not prudent.

Will the rules be good or bad for America?

The President says good. Will it be as “good” as the ACA?  While you decide for yourself, consider these facts:

Methane is down

From 2005 to 2014 natural gas production increased by 33 percent and methane emissions from natural gas systems decreased 11 percent.  The EPA places the natural gas industry in third place on the list of methane emitters behind landfills and “enteric fermentation” (It’s Blazing Saddles, but with cows).

What’s wrong with the free market?

EPA’s last greenhouse gas inventory in April 2015 specifically credited a 38 percent drop in methane emissions since 2005 to voluntary efforts by producers.  Where is Friedrich Hayek when we need him?

Is it worth the cost?

Methane emissions from natural gas systems represent 3.4 percent of all the greenhouse gases emitted in the United States.  EID has done the math: Assume methane emissions every year from 2025 to 2100 are kept at the target of 45 percent reduction from 2013; that would impact global temperature by .004 degrees Celsius. Some would call that benefit de minimis compared to the cost.

Close enough for government work

In justifying new methane rules the EPA assumed substantially higher natural gas prices than did the EIA. Result: Faulty cost-benefit analysis. How has the agency has fared in other regulations? It estimated its new CAFE standards would save consumers a few thousand dollars on gas and add $948 to the cost of a new car. Three different groups have gauged the additional cost to be more like $3,800 even after fuel savings.

Crazies debunked

EID reports on the debunking of Bill McKibben’s fracking “facts”  Highlights (details in the links):

  • Several of his claims have even been rebuked by the IPCC, the international global-warming alarmist enterprise.
  • The IPCC considers the rapid deployment of hydraulic fracturing as an important reason for the reduction of greenhouse gas emissions.
  • The Harvard study allegedly showing the nation is leaking methane in “massive quantities” doesn’t point to shale gas production as its source.
  • The greatest methane increases have been in areas where there is no shale development.
  • Even the EDF agrees: Study after study shows that emissions are far lower than Ingraffea claims.
  • Gasland has proven to be a fraud.

A contrary look at the EDF study 

Several observations about last week’s EDF’s study:

  • Alex Trembath of the Breakthrough Institute explains that methane leakage is a minor factor in determining the benefit of coal-to-gas transition; such levels are within acceptable ranges.
  • Even after targeting the “super emitters”, the EDF study shows an overall very low methane leakage rate.

Mother’s Day is coming up.  How about a musical interlude for Mom!

wolf“Remember, I can do anything to anybody”, deranged and murderous Roman emperor Caligula to his grandmother (Julia, widow of Tiberius and herself no stranger to things done to other people as and when they pleased).

In related news, the White House intends to limit methane pollution from thousands of existing oil and gas wells, pipelines and other facilities.

Why should I care?

Because, if you suspect the new rules are .. pick the word … unnecessary, too expensive for the benefit, anti-capitalist, “overbearing leftist bulls&%t” … you should understand the point of view of those who see it differently. That way you can defend the industry to those who don’t know better. This week is a discussion of the rationale for the rules.

The new rules good for America, aren’t they?

No they aren’t, (That’s an opinion; feel free to disagree). Here are reasons why we need the new rules.

The Environmental Defense Fund, through its Energy Exchange blog, asserts that methane emissions are far higher than EPA estimates. According to EDF, the oil and gas sector is the largest industrial source of methane emissions in the United States and reducing these emissions is the biggest, most cost-effective opportunity to make “fast meaningful reduction in greenhouse gas pollution.”

Reducing methane emissions isn’t as difficult or as costly as the industry claims. For example, Jonah Energy reduced fugitive methane emissions by 75 percent and cut repair time by 85 percent, saving more than $5 million in product. We’ve got to do it now.

Methane traps 84 times as much heat as CO2 over 25 years.  The IPCC suggests methane is responsible for 25 percent of the world’s global warming and is a climate destroying fossil fuel.

According to a recent study published in Environmental Science and Technology, the biggest problem is the “super emitters” – large, unpredictable leaks caused by equipment failure, human error or other factors.  The study recommended that “regularized, widespread monitoring facilities across the supply chain” could quickly find and fix leaks in equipment.

According to the EPA, methane constitutes about 10 percent of total US greenhouse gas emissions.  Methane has a warming potential that is about 25 times greater than carbon dioxide, according to the EPA and the IPCC.

What do the fabulists say?

Bill McKibben, whose fracking “facts” have been debunked more often that your president has apologized to foreign dignitaries, is still at it. Here are his assertions:

  • Fracking would do more climate damage than coal even if only a small percentage of methane is leaked;
  • America’s contribution to global warming increased during the Obama years;
  • the nation is leaking methane in massive quantities;
  • new research backs prior claims of McKibben and Ingraffea;
  • Gasland is one of the classic environmental documentaries of all time.

Next week: Why the new rules are neither good for the industry nor helpful in reducing global warming.

Our musical interlude: Here is where these studies take me.

 

EPA in  ActionUSA v. Citgo Petroleum highlights the excruciating degree of detail in federal regulations and the gymnastics the EPA will employ to justify a prosecution. The Fifth Circuit has reversed Citgo Petroleum’s conviction for violations of two federal laws.

Breathing Easier Under the Clean Air Act

The EPA regulates oil refinery waste water treatment systems under the Clean Air Act. They emit dangerous levels of volatile organic compounds, which produces ozone. so far, so good; now for the minutia:

Can an equalization tank be an “oil water separator”?  The district court used a purely functional explanation – defining an oil water separator by how it is used. This was not correct. Subpart QQQ (See the regs at 40 C.F.R § 60 et seq) defines an oil water separator by how it is used and also by its constituent parts.  It is equipment “… used to separate oil from water consisting of a separation tank, which also includes the forebay and other separator basins, skimmers, weirs, grit chambers, and sludge hoppers.”  When used in this way, “consists” is as an exhaustive list; the components are a part of the definition.

That is different than if the regulation had said “includes”.  Used in that way, that phrase does not mean that the listed equipment is necessary for the regulation to be invoked.  The Court explained that “including” is “inclusive but not mandatory” and distinct from “consisting of”.  The court also cited “Subpart Kb”, which regulates storage vessels excluded from Subpart QQQ.

The government warned that this reading of Subpart QQQ would create a “massive loophole” in the regulatory structure.  The court replied that equalization tanks were not under-regulated because “Subpart Kb” still applies.  Further, the government is authorized under the Clean Air Act to fix the loopholes with new regulations.

How did Texas Approach It?

Is there a difference between state and federal regulators?  Some years before the inspection at issue the Texas Department of Environmental Quality cited Citgo for operating the tanks as oil water separators, agreed that the tanks were not separators under Subpart QQQ, and dropped the charges.

The Migratory Bird Treaty Act of 1918 – Is it “Taking” or Bird Murder?

The MBTA declares it “ … unlawful, by any means or in any manner, to pursue, hunt, take, capture, kill, … any migratory bird.” According to the court, “taking” is limited to deliberate acts done directly and intentionally. To “take” is to reduce those animals by killing or capturing to human control. It involves only conduct intentionally directed at the birds, such as hunting or trapping, not commercial activity that unintentionally and indirectly causes bird deaths.

By contrast, the Endangered Species Act defines “take” to mean “harass, harm, … ”  “Harass” includes a negligent act or omission and “harm” means any act which actually kills or injures wildlife, not only acts that directly result in the death of endangered species.

Other Interesting Facts in the Opinion

  • Take a tour of the refinery wastewater treatment process
  • Have a grammar lesson reminiscent of your high school English class
  • Find out why the court refused to define “kill”
  • Impress your friends by knowing how many birds are killed each year by flying into windows
  • Face the ugly truth that house cats in Wisconsin are “serial violators of the MBTA”
  • Ponder the difference between means rea and actus reus
  • Learn to spot a “temporizing modifier” when you see one.

Speaking of Byrds, here they are for today’s musical interlude. From an under-appreciated album.

dunceI often wonder if anybody actually reads our modest, quasi-weekly offerings. They do! And they respond! To criticize!  I earn my keep being “critiqued” by impatient judges, aggressive opposing counsel and, occasionally, less-than-happy clients, so – challenge accepted.

“Critique” One:

Lipsky was not Range’s lessor, therefor I know nothing about the case. Surely, this person lives in my house, where I enjoy a long history of knowing nothing about anything. (Memo to self: check progress on subpoena for kids’ “sent” box). And the inquisitor is as adept as my beloved family in drawing expansive and incorrect conclusions from meager evidence.

As for Mr. Lipsky, he was a nearby landowner and not a lessor.  But the point – and the lesson – remain the same: His big mouth spread accusations that Range says are untrue. Range wanted to put a stop to it and was partially rebuked. Whether against a lessor or a stranger, it will be more difficult than in the past for anyone to use litigation as a tool to quash criticism.

“Critique” Two:

The EPA did not find Lipsky’s claims to be false, says our inquisitor. To evaluate this one, let’s use the time-honored, citizen-friendly, and court-validated process invoked by the TCPA: Can the reader draw rational inferences from circumstantial evidence in determining what the EPA believed about Mr. Lipsky’s claims?

What Really Happened?

The Railroad Commission ordered Range to test its gas, launched an investigation, and held a formal hearing – in which Mr. Lipsky and the EPA were invited to participate (they declined). The RRC considered scientific testimony on “geology, hydrogeology, microseismic analysis, hydraulic fracturing, geochemical gas fingerprinting, and petroleum engineering” and determined that gas in Mr. Lipsky’s water well was most likely from the Strawn formation, found at 200 to 400 feet, and not the Barnett Shale, from which the Range wells produced at 7,000+/- feet, and that Range’s wells did not contribute to the contamination. Shortly thereafter, the EPA – declining to explain why – withdrew its earlier finding that Range’s wells were an imminent and substantial endangerment to a public drinking water aquifer. The inquisitor blames “political pressure”.

A Quiz:

Who had the motive and stroke to apply “political pressure” on the EPA to withdraw its report?

A.  EPA BFF then-Gov. Rick Perry

B. Sen. Ted “Hands Across the Aisle” Cruz

B. Al Armendariz

C. The ghost of George Mitchell

Who is it?

Who is our nemesis, the avenger of truth, the harbinger of a world purified by its abstinence from hydrocarbons? The inquisitor claimed to be “Sharon Wilson”. Given the anger revealed in the communications and on a certain Website, I assume it is “Texas Sharon”. Those running for high office adhere to a cardinal rule: Never name your adversary. However, this is a public service. When you hear a story, consider the source. Get to know Texas Sharon as a source. Then draw your own inferences, rational or otherwise.

Answer to the Quiz:

Nobody. It was a trick question. My “inference”: The EPA realized they were wrong and, wisely, drug the report off into a gloomy corner of the bureaucratic netherworld where it died, alone and abandoned, shorn of its misshapen graphs, charts and footnotes.

In the name of “debate”, we have this musical interlude.

Invasion Update:

The dog barked last night; thought I heard the rumble of tanks from the invasion. Turned out it was just thunder.

Our wardens at the EPA are “racing to turn out new regulations before the clock runs out on President Obama’s term”, says The Hill.

The EPA is revising its Mercury and Air Toxics Standards for coal fired power plants. According to the US Energy Information Administration, owners of U.S. operators are facing choices:

  • 20% must decide whether to upgrade their coal fired plants at the end of 2012 or retire them,
  • 9.5% intend to retire plants,
  • 5.8% plan to add environmental control equipment,
  • 64% already have appropriate control equipment.

The EPA is also looking to cut greenhouse gas emissions by reaching beyond the plants themselves. The reductions could be met by encouraging power plant owners to expand renewable energy, improve the efficiency of their grids, or encourage customers to use less power. This rule would also allow states to reach their goals by using existing emission-cutting schemes, such as state-controlled and regional cap-and-trade plans.

Questions

 Is this authority is allowable under the Clean Air Act? The complaint is that the EPA has gone “way beyond the original intent of the Clean Air Act … ”, said Sen. John Barrasso (R. Wyo.). The administration’s response is the EPA is just doing what Congress allowed under the CAA, and we Americans, and thus the EPA, must do more to prevent global warming.

Is this a passing thing or are we in an eternal regulatory vice grip?  Some say the EPA has been winning at the courthouse lately.   Not to worry.  Nothing in politics lasts forever … unless Edwin Edwards wins his congressional election.

Been-There-Done-That

Actor-activists like Mark Ruffalo remain committed to the untruths about contaminated drinking water in places you’ve heard of before: Pavilion, Wy; Dimock, PA; and Parker County, Tx. He has lent his name to a request by fringe group Food and Water Watch and the Natural Resources Defense Council to the EPA to re-open investigations of these alleged contamination sites. Those claims have repeatedly proven to be false.

The Takeaway

“Low Information Voters” are those who, it’s been said, don’t know what they think they know. Those who can be motivated by Hollywood personalities to actually vote can be a threat to progress and common sense. Witness the fracing bans in college towns in Colorado and even in our own Denton County, Texas.

Who’s Next?

The U.S. Chamber of Commerce is concerned that the. EPA’s plans will result in increased energy costs, which will diminish hU.S. competitiveness in the world economy and kill jobs. Coal is “dirty”, you say, and it competes with natural gas, so you might not care. But will the regulatory stampede stop short of sending us all hurtling over the economic cliff? Time will tell. And to be fair, not all regulations cost as much as originally feared.

This musical interlude is dedicated to the EPA and its Administrator Gina McCarthy.

Ever the schoolyard bully, the EPA has been pushing its agenda against the will of the states, at least until the principal intervenes.

A minority (that’s the Republicans) report by the U. S. Senate Committee on the Environment & Public Works asserts that the EPA is in violation of “cooperative federalism”, in which the EPA would set national standards on an emissions rule and allow states to administer the regulation in the most cost effective way. The rationale is that states and localities are better suited than the feds to design and implement compliance strategies.

The report says the agency has failed to consult with states or has coerced states to adapt stringent regulation that come at a huge cost to the state’s citizens and economy.

The report focuses on “sue and settle” agreements the EPA makes with environmental activist organizations in which the agency, after being sued by an environmental group, enters into a consent decree allowing regulations to move forward without comment from the states or regulated industries.

The bully doesn’t always get its way.

Alt v. EPA was about the EPA’s assertion of regulatory authority over stormwater runoff from Ms. Alt’s farmyard. She challenged the EPA’s findings that she had violated the Clean Water Act. The case was about the discharge of “particles, dust and feathers” from Ms. Alts’ poultry farm into a federal waterway. Inother words, when it rained, chicken poo-poo ran into “Mudlick Run”.

The EPA found that Ms. Alt was in violation of the Clean Water Act and threatened a civil action in which she could be subject to penalties of up to $37,500 per day. The question was whether Ms Alt’s activity was exempt from liability under the agricultural storm water exception to the definition of a “point source”.

I’ll skip the legal analysis and get to the larger point: According to the court,“it appears to be a central assumption of the EPA’s position that the agricultural stormwater discharge exemption had no meaning whatsoever from the time the exemption was added to the statute until 1987 until the EPA promulgated its new regulations in 2003.”

In rejecting the EPA and ruling for Ms. Alt, the court concluded that “common sense it the most fundamental guide to statutory construction.”

In Iowa League of Cities. v. EPA, the federal 8th Circuit ruled that the agency was pushing a new interpretation of its wastewater treatment rules in letters sent to cities in Iowa in order to prohibit selected internal techniques for treating wastewater during high-flow storm events.

If you would rather not read the opnion, I refer you to the NCPA’s Energy and Environment  newaletter by Sterling Burnett, from which I plagiarize joyfully. The ruling says that what goes on within the plant is not within the EPA’s purview as long as the effluents leaving the plant meet pollution limits. If the EPA wants to regulate an activity, it must go through the rule making process, not simply give opinions. The EPA can’t contradict its own rules.

Makes sense to me.

According to a Sunday blog post by Conn Carroll in the Washington Examiner, the EPA is hurrying efforts to implement regulations that would ban coal-fired power plants before the end of the year, in fear that a loss by President Obama in Tuesday’s election would put an end to what would otherwise be on the second-term agenda.

Some will discredit that post as another example of  a “right wing”, get-out-the-vote-in-the-swing-states, fear-mongering polemic.  However, the post refers to a well-researched May 2012 Manhattan Institute paper by Senior Fellow Robert Bryce questioning the wisdom of over-regulation of coal. 

And one could question the need for additional regulation of this sector of the energy industry.  According to an October 15 post by Brad Plumer in the Washington Post, heavy regulation might not be necessary for those who would like to wean America off coal.  

A tongue-in-cheek  musical interlude to remind us what it could be like.

 

Ron Curry is the EPA’s new administrator for Region 6, which is responsible for enforcement of federal environmental laws in Texas, Louisiana, New Mexico, Oklahoma and Arkansas.  Mr. Curry replaces Al “Crucify ’em” Armendariz, who was sacked earlier this year after comments, caught on video, in which he likened his tactics to the Romans of antiquity who supressed the villages they conquered by killing the first five men they saw.  It made the rest of the citizenry easier to subjugate, was the rationale. I’m sure it did. 

Here is a selection of news reports about Mr. Curry’s appointment:

The Dallas Business Journal says the industry hopes for science-based regulatory enforcement.  This is ironic, given that the current administration promised just such a policy in the last presidential campaign

The Dallas Morning News reminds us that he is not from  Texas.

The Houston Chronicle says environmentalists are pleased with the appointment.

The New Orleans Times Picayune says that Public Citizen touts Mr. Curry’s ability to work with industry and environmental groups.  

The Texas Tribune says he is an advocate for action to stop climate change.

I close with this seldom-seen video featuring the EPA  in the act of encouraging other agencies to join in on the regulatory frenzy.  In the full moon of this administration’s first, perhaps only, term, hear the howling chorus respond with joy and enthusiasm: the Consumer Financial Protection Bureau, Hugo Chavez, the central planners at the countless boards and commissions created by the Patient Protection and Affordable Care Act, bankrupt California taxing entities, and the town that busted the little girls’ lemonade stand.

DISCLAIMER:  All opinions and feeble attempts at humor are mine alone and not necessarily those of my colleagues at Looper Reed or some of my family members.  My dog Daisy forgives my derisive references to her cousins and generally agrees with my politics.

The predator returns.

I don’t usually forward content created by others, and I try to avoid overtly political entries, but this one is from the June 14 Daily Policy Digest of the National Center for Policy Analysis.  It is worth reading if you pay attention to energy and environmental policy: 

“For the last three years, the Environmental Protection Agency (EPA) has justified new air quality regulations — unprecedented in stringency and cost — on the assumption that even trace levels of particulate matter can cause early death. The EPA’s guiding principle in this effort has been that there is no price too high to preempt further particulate reduction, says Kathleen Hartnett White, a senior fellow at the Texas Public Policy Foundation.

“The EPA has gone so far in this endeavor as to claim that its rules will save 230,000 lives by 2020. However, such rhetoric is built on implausible assumptions, biased models, statistical manipulations and cherry-picked studies.

•The EPA emphasizes the killing potential of airborne particulate matter, yet physicians and toxicologists have found little evidence of this drastic conclusion.

•The EPA’s zero-tolerance principle for health risks compels it to herculean regulatory ends, including reducing particular matter below levels found in nature.

•Natural background levels of 1 microgram of fine particulate matter per cubic meter will logically become the next target for the EPA.

“The EPA’s claimed mandate places it on a losing path; particulate matter realistically cannot be reduced below certain ambient levels. Nevertheless, its rules will impose enormous cost on the economy in an ill-advised effort to accomplish exactly this.

•Indoor levels of fine particulates are far higher than outside levels.

•Simple tasks such as cleaning a closet and cooking expose individuals to high levels of particulate matter that cannot be reduced by regulation.

•Nevertheless, the EPA will continue to make a show of targeting particulates under the guise of fulfilling the directives of the Clean Air Act.

“Interestingly, the national standard for acceptable particulate matter concentration remains at 15 micrograms per cubic meter. Were the EPA truly so convinced of the rightness of its conclusions, one would think it would be quick to revise this standard. The fact that it hasn’t suggests that EPA regulators are well aware of the fallibility of their claims.”

Source: Kathleen Hartnett White, “The EPA’s Flawed Zero Tolerance Policy,” Daily Caller, June 4, 2012.

That is what the NCPA says about the situation. On the other hand is a report from GreenFacts Initiative supporting the proposition that perhaps current standards should be revisited. This group approached the issue from a scientific viewpoint and didn’t concern itself with cost, which is the NCPA’s point – the regulations cost too much for what they deliver.