President Donald Trump stated “I am going to lift the restrictions on American energy and allow this wealth to pour into our communities.” On that same day as the first quarter ended, President Trump issued an executive order titled “Promoting Energy Independence and Economic Growth.”
This executive order maps a new course for American energy policy by directing federal agencies to reverse previous actions and regulations taken by the Obama administration to address climate change, the Clean Power Plan and specific issues that directly impact the midstream industry.
This executive order overhauls federal policies of the past eight years, cutting regulations that impact fossil fuel industries. This moves us from a federal energy and environmental policy of “keep it in the ground and address climate change” to a much more realistic “promote the development of fossil fuels.”
Before we delve into the details of this new policy, there is one statistic we should remind ourselves of. It’s a widely held fact that total U.S. methane emissions have dropped by 15% since 1990, as Bernard Weinstein of Southern Methodist University told the U.S. House of Representatives last fall—even though domestic oil and gas production has doubled over the past decade. Our industry has continued to reduce methane emissions because we lose money when we lose methane.
The previous administration ignored this significant fact and took an unnecessary, industry-specific, punitive approach to the midstream industry by promulgating expensive and unnecessary methane emission rules for new and existing operations.
Trump’s new executive order addresses the Clean Power Plan but also covers much more. It also addresses one of the Obama administration’s unnecessary methane rules for new and modified sources. This final rule from the U.S. Environmental Pro¬tection Agency (EPA), known as the Quad OOOOa rule, sets emission standards for new and modified sources.
Trump’s executive order directs EPA to review this rule. It further directs EPA to review to see if the rule “potentially burdens the development or use of domestically produced energy resources.” Federal agencies have 180 days to complete this review. Based on the review, an agency may take further steps to rescind or revise the rule.
GPA Midstream’s hope is that the Obama-era Quad OOOOa rule is repealed since it would be costly and unnecessary for our membership to implement. This rule also has the potential of impacting and hindering midstream infrastructure development. Developing midstream infrastructure is crucial to growing our economy, and removing this unnecessary and burdensome rule would help in that midstream infrastructure development.
Also as May began, GPA Midstream filed comments on the EPA’s proposed addition of natural gas processing facilities to the Toxics Release Inventory (TRI). The agency is proposing to add gas processing facilities to the list of industries required to report to TRI. The general intent of TRI is to make information on chemical releases publicly available.
GPA Midstream feels this is an unnecessary expansion of government regulation where the evidence as presented in the docket does not support the need to add gas processing facilities to the list of industries required to report to TRI. It’s also important to note that the EPA has completely underestimated the cost of this proposed rule on the industry and does not adequately assess the admin-istrative burden of tracking and record keeping that this proposed rule passes onto GPA Midstream members. We hope that the EPA withdraws this proposed rule.
While the Trump team is taking some key steps, the process for reversing a federal regulation is extremely complex.
The process an agency most follow to rescind a regulation is essentially the same notice and comment rulemaking process that it used to develop the regulation or rule in the first place. The agency will also have to provide a persuasive and sound rationale for why it is shifting course. This is by no means a quick and easy solution.
Next, states and environmental activists groups that support these Obama rules and oppose the Trump administration changes will almost certainly challenge these changes in federal court. These potential legal challenges will not only delay these possible rule changes, but could potentially overturn some of them.
Regardless, regulatory relief is in sight for the midstream industry with this recent executive order.
Matthew Hite is vice president of government affairs for the GPA Midstream Association.
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