The Senate just failed to roll back an Obama-era regulation
that will discourage energy production, cost millions of dollars, and kill
thousands of American jobs.
The rule, issued in the eleventh hour of the Obama
presidency by the Bureau of Land Management, was designed to limit already
decreasing methane emissions from oil and natural gas wells on federal lands.
The Republican-led Senate was expected to kill the regulation before it had a
chance to take effect. But instead, three Republicans broke with their party to
keep the rule in place.
That move was shocking. The environmental impact of the rule
is essentially negligible. Methane only accounts for 10 percent of greenhouse
gas emissions -- and federal lands host only 15 percent of natural gas
production. Indeed, the rule would only trim CO2 emissions by less than 1/100th
of 1 percent.
What's more, the industry already has a financial incentive
to capture methane emissions -- and has been making great strides to reduce
them. Between 1990 and 2015, according to the EPA, petroleum-related methane
emissions fell more than 28 percent.
But Americans will have to pay a hefty price for this
needless rule. One analysis predicts it could cost over $1.2 billion a year.
Small businesses will feel the brunt of this financial burden. Small oil and
gas producers are expected to dish out upwards of $64,000 each year to comply
with the rule.
Some companies -- especially those operating a single well
-- won't be able to handle such costs and may end up shutting down. In fact,
according to consulting firm Environmental Resources Management, the methane
rule could wipe out 40 percent of flaring wells on federal lands. When energy
firms fold, Americans lose their jobs. Indeed, regulatory constraints oil and
natural gas production, like this methane rule, could put 800,000 Americans out
of work by 2020.
The rule will also reduce tax revenues. By discouraging
natural gas production on federal land, it could pull $114 million out of
federal and state coffers.
Western states, which host vast swaths of federal land, are
particularly concerned about the rule's costs.
Utah's Public Lands Policy Coordinating Office says the rule
"gives BLM authority without accountability and lacks proper cooperation
with existing state regulatory agencies."
New Mexico Governor Susana Martinez maintains that,
"Absent a repeal [of the methane rule], funding for New Mexico's schools,
roads and healthcare will be dramatically reduced on account of the reduction
in revenue generated by the oil and gas industry."
Her concern is warranted. New Mexico, which has energy
development to thank for 30 percent of its state budget, could see 70 percent
of its northwestern wells shut down.
In Rio Blanco, Colorado, where 85 percent of revenue is
powered by oil and gas, market constraints on energy production have recently
caused a 30 percent revenue dip. The methane rule will only worsen this
All told, the methane rule could cost western America $9
million in economic output, royalties and wages.
Luckily, Kate MacGregor, the Interior Department's Acting
Secretary, has stated that the agency is working to "suspend, revise, or
rescind" the rule altogether.
It should. Doing away with the methane rule will protect
American jobs and energy production. The sooner the Interior Department
corrects the Senate's mistake, the better.
Jeff Stier is a senior fellow at the National Center for
Public Policy Research in Washington, D.C., and heads its Risk Analysis