Growing support for methane regulation
Major independent producers want to find solutions that reduce emissions
As a new Congress and administration prepare to enter office with historic economic turmoil, the federal government must find a way to square campaign promises with reality. The Biden campaign promised “the most aggressive climate agenda ever put forth by a leading U.S. presidential candidate.” The American Exploration and Production Council (AXPC), a national trade association representing the largest independent oil and natural gas exploration and production companies in the United States, stands ready to work collaboratively with the incoming administration to achieve meaningful action to address climate change, including on the critical issue of methane.
AXPC believes that methane regulations must promote innovation and recognizes the importance of oil and natural gas as part of the climate solution. We want the opportunity for dialogue and partnership among policymakers and industry partners to find solutions that will meaningfully drive down emissions.
Even under the International Energy Agency Sustainable Development Scenario, which assumes every country meets their Paris commitments, the world will still get almost 50 percent of our energy from oil and gas in 2040. If we are going to address climate change, our industry must be at the table.
Despite what some environmentalists claim, renewables are not poised to replace natural gas due to their costs, reliability and battery storage capacity issues.
Energy experts have determined that energy storage would have to cost roughly $20 per kilowatt-hour for the grid to be 100 percent powered by a wind-solar mix — that is a 90 percent drop from today’s costs. And, competing with a natural gas peaker plant would require energy storage costs to fall to $5 per kWh.
According to the Department of Energy, for grid applications, electricity must be reliably available 24 hours a day. Even second-to-second fluctuations can cause major disruptions that could potentially cost billions of dollars.
Despite advancements in battery technologies, the annual output of the world’s largest battery factory could store three minutes’ worth of annual U.S. electricity demand. According to a 2019 Manhattan Institute report, it would require 1,000 years of production to make enough batteries for two days’ worth of U.S. electricity demand. Meanwhile, 50 to 100 pounds of materials are mined, moved and processed for every one pound of battery produced.
American oil and gas producers safely use some of the most advanced technologies in the world to reduce emissions and safely extract our abundant domestic resources. Over the past decade, increased use of natural gas in power generation has been the most significant factor in reducing emissions.
Methane emissions from oil and natural gas systems are down 23 percent since 1990, according to the EPA. Innovative methane reduction methods are driving this decrease in emissions during a time when oil and natural gas production increased dramatically. It is important that regulatory policy enables us to build on this success.
We support the regulation of methane emissions that:
• Encourages innovation and flexibility, instead of bureaucratic regulations that hinder the goal of reducing methane emissions;
• Allows and incentivizes the development and deployment of technologies to monitor and mitigate methane emissions for compliance purposes and considers the costs and benefits of applying new regulations to existing facilities;
• Avoids creating overlapping regulatory regimes at the federal and state levels.
Our industry is one of the most thoroughly regulated industries in the U.S., and we recognize the importance of regulations that balance the essential value of U.S. oil and natural gas production with the global challenge of addressing climate change.
Because of AXPC companies, the U.S. is now the leading producer of both oil and natural gas, and we supply the energy that drives the American economy and is required for every other industry to succeed, from manufacturing to health care to technology. The U.S. needs homegrown, affordable energy now more than ever, to recover from the economic devastation caused by the COVID-19 pandemic.
Natural gas was the largest source — about 38 percent — of U.S. electricity generation in 2019, and upstream oil and gas production provides hundreds of thousands of jobs in states across the country and billions of dollars in revenue for state and local economies, including over 1.2 million direct and indirect jobs and $43 billion in state and local tax impacts in Texas.
America’s independent oil and gas producers are committed to working with the Biden administration to meaningfully reduce emissions to address climate change, while providing the affordable and reliable energy to grow back our economy. As the industry responsible for the American shale revolution that brought our country out of the last economic recession, we can help the incoming Biden administration meet its environmental and economic goals.
Bradbury is CEO of the American Exploration and Production Council and served as one of the top legislative strategists and technicians in Congress as floor director to two successive speakers of the House of Representatives and deputy floor director in the offices of both the majority and minority leaders.