Methane regulations an expensive mistake Tim Ball and Tom Harris examine the costs to the oil and gas sector by the EPA’s misguided regulations According to a new study by American consulting firm ICF International, cutting methane (CH4) emissions from industry will be far more expensive than originally thought. The ICF report, released on June 2, demonstrated that the cost to reduce methane emissions from natural gas systems is $3.35/thousand cubic feet (Mcf) of methane reduced. This flies in the face of the costs cited by Environmental Defense Fund of only $0.66/Mcf of methane reduced, a statistic EDF used in pushing for US Environmental Protection Agency (EPA) regulations on the gas. Richard Hyde, interim executive director of ONE Future, the coalition of natural gas companies that sponsored ICF’s latest work, explains, “This new study provides cost estimates of methane abatement technologies that are more consistent with current market realities.” In their press release on the topic, ONE Future state, “The increased cost of methane reduction is higher than previously estimated largely due to higher assumed costs for leak detection and repair (LDAR) and revised assumptions regarding the ability of midstream segments to monetize the value of recovered gas…This analysis updates the list of known emission abatement technologies and provides revised costs estimates for each one.” Methane emissions occur throughout the natural gas industry. They come from normal operations and maintenance as well as due to unintended and irregular leaks and equipment venting. Staggering costs Although the new cost estimates are staggering, the EPA already recognized that methane regulations will be expensive. In their final rule on new, modified and reconstructed sources of methane from the oil and gas sector unveiled on May 12, the agency admitted that the regulations will add about $530 million—at least 25% higher than their estimates only nine months earlier—in additional costs on the sector per year by 2025. Companies will have to upgrade pumps and compressors, and expand the use of technology designed to capture methane that can be released by newly fracked wells. The costs of exploring, producing, and delivering natural gas will all rise, likely driving many small oil and gas producers out of business and further threatening America’s energy security. Yielding to the demands of environmental extremists, the EPA expanded the final regulation to include low-producing wells that generate less than 15 barrels per day of oil (or its equivalent) and increased leak inspection frequencies at compressor stations. The new EPA rule is part of the Obama administration’s fight to ‘stop climate change.’ In particular, it will help the United States move closer to President Barack Obama’s target of reducing oil and gas sector methane emissions by 40-45% from 2012 levels by 2025. It also provides a legal stepping stone to regulating emissions from 1 million existing wells, something Obama promised during a March summit with Canadian Prime Minister Justin Trudeau. The EPA formally started work on this extension to the current methane regulations by releasing a draft Information Collection Request (ICR) requiring companies to turn over reams of data about emissions, pollution-reducing equipment, and associated costs. The ICR will impact 22,500 operators and 698,800 facilities. Canadian regulators plan to publish an initial phase of their proposed methane regulations by early 2017. The final impact of all this on consumers is unknown but undoubtedly significant, in increased heating and cooking costs, not to mention rises in the prices of food and other products, the production, transportation and storage of which require energy. Industry response Oil and gas industry leaders have responded that methane regulations are not needed since the sector is already reducing emissions on their own. They are right. Isaac Orr, Research Fellow in energy and environment policy with the Arlington Heights, Illinois-based Heartland Institute pointed out, “Methane emissions from natural gas development have fallen nearly 15 percent since 1990, despite the fact the United States increased natural gas production by more than 50 percent during this period and became the largest producer of natural gas in the world.” Dr H Sterling Burnett, also an energy and environment policy with Heartland, explains why: “natural gas producers and pipeline operators already have a financial incentive to capture every bit of it they can and not lose it to leaks. As a result, less than one-and-a-half percent of all natural gas produced, is lost.” Oil and gas leaders complain that the new rules are very tough on an industry already suffering due to low oil and gas prices, dwindling rig counts and thousands of lost jobs. They are right on this a well, of course. But, due to either ignorance or fear, they do not bring the most important point: any rules restricting methane are almost certainly pointless from a climate change perspective. Our knowledge about the impact of methane emissions on climate is far too immature to warrant the imposition of crippling costs on the sector and a public that rely on inexpensive power for their prosperity. EPA science critique To understand the degree to which we have been misled on the science backing the methane reduction plans of Obama, Trudeau and other political leaders, consider the following from the EPA website. In its news release announcing the new regulations, the EPA states: “Methane is the second most prevalent greenhouse gas emitted in the United States from human activities...” This is the misleading since it ignores water vapor, which the EPA does because the United Nations Intergovernmental Panel on Climate Change (IPCC) ignores it. The IPCC concluded that, while humans produce water vapour (for example, from reservoirs), the amount is so small relative to the total in the atmosphere (water vapour is 95% of all greenhouse gases (GHG) by volume while carbon dioxide (CO2) and methane (CH4) are 4% and 0.36% respectively) that our production is of no consequence. They can’t possibly know this because we lack even remotely accurate measures of total atmospheric water vapour or how much it varies in space in time. When climate alarmists finally recognized that there was an upper limit to the warming capacity of CO2, they needed a new paradigm to continue the climate scare. After all, a variation in water vapour of at most 1% equals all the possible warming from human produced CO2. At first glance, the new hypothesis sounded feasible: as the atmosphere warms due to rising CO2 levels, evaporation rates increase which amplify the supposed CO2-induced warming. In turn that leads to more evaporation and so on; in other words, a positive feedback. Problem was, the hypothesis was quickly debunked by scientists in the field. The critical issue is called climate sensitivity. This is a calculation of the amount of temperature increase caused by a CO2 increase. The IPCC Fourth Assessment claimed a 2.0°C to 4.5°C increase range. This is much lower than earlier and the estimate keeps going down as the theory of positive feedback is rejected. In addition, if there is any sensitivity, it is offset by the negative feedback of increased cloud cover. On the EPA web page describing the Obama/Trudeau agreement, the agency asserts: “Methane is upwards of 25 times more potent than carbon dioxide in warming the planet …” This comes from a dubious concept: the global warming potential (GWP) of each GHG, in other words, its effectiveness in causing atmospheric warming in comparison with the warming supposedly caused by an equal mass of CO2 (which is assigned a GWP of 1). When scientists pointed out how small the amount of atmospheric methane actually was—only 0.00017% of the total atmosphere and 0.36% of the total greenhouse gases—activists had to find a multiplier. Yet, there has never been good evidence supporting the global warming potential idea. The GWP concept became especially attractive to campaigners when the focus was originally on methane from animals. Farmers were under attack from animal rights groups with particular intensity in the 1970s and 80s. When the global warming due to GHG meme came along, it provided an excellent vehicle for activists’ agenda. They said that methane from animals, especially beef cattle, was causing global warming and destroying the planet. The New Zealand governments even planned taxes on animal emissions of methane. The charade was exposed by the EPA itself when they admitted: “EPA and other organizations will update the GWP values they use occasionally. This change can be due to updated scientific estimates of the energy absorption or lifetime of the gases…” If GWP values were based on well-understood physics and real data, they would not change over time. What slowed the methane from animals crusade was not better public understanding, but the fact that Mother Nature not cooperating. Just as the current 18-year global warming ‘hiatus’ is making a lie of activists’ predictions about the dangers of CO2, so the decline in the rates of increase in atmospheric methane levels (see Figure 1 - Figure 2.2 from the IPCC Fifth Assessment Report), now not very different from zero, has refuted the methane argument. Regardless, the very slight increase in methane levels since 2007 is not coming from hydrocarbon fuel production, according to a new study initiated by NOAA and other scientists around the world. Burnett explains, “Even the EPA acknowledges natural sources – or other sources, such as livestock or landfills – account for the vast majority of methane emissions, not natural gas production or transport.” Next, the EPA claims: “Globally, over 60% of total CH4 emissions come from human activities.” Such confidence is irrational. It was only in 2006 that researchers discovered that rain forests are a major, previously uncounted, source of methane. Similarly, in 2010, it was found for the first time that a wide expanse of Arctic Ocean seabed is bubbling methane into the atmosphere. If one is unsure about the amount of methane coming from natural sources, as indeed we are, you can’t determine the relative importance of the human contribution. And if one cannot determine our relative contribution, then another pillar supporting climate change alarm crumbles and, with it, funding for scientific research. Scientists who made the rain forest discovery must have realized what their research implied and back-pedaled. The EPA next asserts: “Methane is more abundant in Earth’s atmosphere now than at any time in at least the past 800,000 years. Due to human activities, CH4 concentrations increased sharply during most of the 20th century…” There is no convincing empirical evidence to support this. The determination to find a human cause of assumed methane rise has created tunnel vision. A list of targets included; Termites: forest clearing in Africa created more termite habitat which supposedly increased methane emissions. But then they discovered that termites numbers were overestimated by a factor of four. Beaver: the fur industry decline resulted in decreased trapping, and so more beaver, and so more beaver ponds, flooded land, thereby creating more methane. The actual numbers of beavers and the area covered by ponds proved insignificant. Cattle: there has been an increase in cattle, especially in North America. However, they ignored the parallel decrease in ruminants such as bison, elephants, and others. Those decreases are regrettable, but a fact in proper scientific assessment. In an apparent effort to appease political correctness, not included was the impact of 250 million sacred cows in India, or the increase in Asian rice paddies, the second largest source of human-produced methane. Permafrost: global warming was supposedly causing permafrost to melt, releasing more methane. Russian and other scientists, contradicted this claim. This is worse than pseudo-science, it is deliberate deception to create ‘science’ for a political agenda. Climate change concerns no excuse for methane rules The White House web site explains the Obama administration’s excuse for draconian measures to reduce methane emissions: “Reducing methane emissions is a powerful way to take action on climate change.” The EPA estimates the costs of their new methane rules will be offset by $690 million a year in savings by 2025 from averting severe storms, floods and other consequences of climate change. This is ridiculous. Even if it were correct that methane emissions from human activities is an important driver of climate change, EPA regulations are estimated to result in only 0.002°C of global warming by century’s end. Such an amount is too small to even be measured, let alone have any impact on climate-related events. Regardless, this is another of the administration’s misleading circular arguments. They are saying, ‘we decided methane is a dangerous GHG, so, obviously reducing the level is important.’ But the science does not back any of this. Industry stakeholders and states must highlight the EPA’s science mistakes if and when lawsuits are filed against the new methane rules. English biologist, TH Huxley, a staunch advocate of Charles Darwin’s theory of evolution, once said, “The great tragedy of science – the slaying of a beautiful hypothesis by an ugly fact.” It certainly applies to the hypothesis that human-caused methane emissions are a threat to the climate. ABOUT THE AUTHORS Dr Tim Ball is an environmental consultant and former climatology professor at the University of Winnipeg, Manitoba, Canada. He is the author of the 2014 book, The Deliberate Corruption of Climate Science. Tom Harris is executive director of the Ottawa, Canada-based International Climate Science Coalition. The final impact of all this on consumers is unknown but undoubtedly significant

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(a) Globally averaged CH4 dry-air mole fractions from UCI (green; four values per year, except prior to 1984, when they are of lower and varying frequency), AGAGE (red; monthly), and NOAA/ESRL/GMD (blue; quasi-weekly). (b) Instantaneous growth rate for globally averaged atmospheric CH4 using the same colour code as in (a). From the Fifth Assessment Report of the United Nations Intergovernmental Panel on Climate Change. Figure 1

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