EPA Proposal Risks Even Higher Costs

After a tumultuous year of misguided energy proposals that have threatened to impose new hidden cost burdens on Americans, and just as gasoline prices are rising again, the Environmental Protection Agency has proposed a set of new rules that will do the opposite of what they are intended to do.

Energy policy is complex, and it takes more than just government regulators to formulate the right balance of environmental protection with standards and procedures that allow the efficient production of energy, which in turn translates to lower costs for our energy bills, and greater service reliability for our electricity.

The latest proposal regarding methane from the EPA is a great example of good intentions gone astray . The natural gas and oil industry stands ready to work with the agency to develop a workable standard that is technically feasible, has realistic timelines, and provides access to the best available methods and technologies to achieve a shared goal of lowering methane emissions.

Alas, the plan as-is will thwart efforts to improve the environment and inflict a further price hike on electricity, food, fuel and fertilizer prices at a time when American families and small businesses are shaking off the elevated prices left behind by the highest inflation in 40 years, ever-high interest rates and the aforementioned return of higher gasoline prices at the pump. Americans need a break, and this rule will add just one more regulatory layer and hidden cost while failing to achieve what it is theoretically designed to do.

If unchanged, the rules would take working, economically efficient technological solutions off the table, create unrealistic and expensive timelines, and improperly delegate the EPA’s enforcement power to private third parties.

No prizes for guessing that those third parties would include many activists and organizations with zero expertise but a modus operandi of acting to thwart American energy production and security, regardless of the consequences for Americans and their wallets. Putting government enforcement powers in private hands in this context is unlawful, and well beyond the pale of any reasonable limits the United States government has considered before.

We cannot lose sight of the goal here, which is something we can all agree on: the need for a better environment, an important element of which is lowering methane intensity. But how we get there matters, and expertise from the real world is required.

Already, private companies in the American west are showing that innovations already being implemented are paying off in the real world. One company recently got acquired at a substantial premium after demonstrating that it could cut its methane emissions to one 10^th of the industry average. Adding to this, states are already showing how sensible methane regulations can provide level playing fields for industry and good government oversight.

The good news is there is a proven solution to align the EPA’s proposal with successful methane reduction. It is a formula that has served the United States well time and again when solving big problems or striving for big goals. Private industry brings technical expertise, and the government brings its resources to collaborate to create the appropriate, realistic and almost always innovative fix to the current challenge. From the westward railway expansion of the 19^th century, to the nuclear age, the space race and the creation of the Internet and the digital age, it has brought forth breakthrough innovations.

This is the exact kind of formula we ought to be using as we tackle the much-needed permitting reform required to expand and repair our ailing electrical grid, renovate or build state-of-the-art critical pipeline infrastructure – which itself will help lower methane emissions – and to help ensure that new solar, wind and nuclear energy sources – all carbon-free – can contribute to our improving environment.

We have already proven this during Texas oil and gas production boom in the Permian Basin, after the advent of hydraulic fracturing. Production shot up over 300% while methane intensity fell 75% from 2011-2021. That is the direct result of companies focusing on the technical and engineering challenge lowering methane requires.

That is the optimal situation – real-world fixes. Industry innovations, expertise and data are critical to helping regulators develop workable, beneficial programs that achieve the intended goals without confusion, overlap and needless costs that, at the end of the day, end up burdening families.

Anything that needlessly restricts energy supply risks higher prices and pressures an economy clouded by recession fears should be something no one wants. The last thing America needs is a self-inflicted energy and electricity price hike, especially when we can achieve the goal with the kind of collaboration that has served us so well, time after time.

It’s possible to be uncompromising about environmental improvement and energy affordability at the same time, and the EPA has the opportunity to lead the way by smartly changing course.

_______________

David Holt, president of Consumer Energy Alliance, has more than 30 years of experience working for state and federal agencies and Congress and directing outreach and advocacy efforts. David founded HBW Resources in 2005 to provide counsel and guidance to companies regarding governmental and industry energy initiatives, including issues related to energy security, exploration and production, advanced technologies, air quality, and refining. Previously, David served as Vice President of Government Affairs for Hart Energy Services; Senior Legal and Energy Counsel to Chairman James E. Nugent of the Texas Railroad Commission; Counsel to the House Judiciary Committee; and in the Public Affairs and Media Office of the U.S. Department of State under President George H.W. Bush.