The climate rollback that irks even oil heavyweights

The Donald Trump administration announced last week the rollback of a crucial environmental regulation on methane emissions that even some of the world’s biggest oil-and-gas companies support. 

Carbon dioxide (CO2) is the more-discussed greenhouse gas, but methane is more dangerous — one pound can capture up to 84 times as much heat as a pound of CO2. Methane is a byproduct of fossil fuel production as well as agriculture and accounts for about a quarter of all human-made global warming. 

So when the Environmental Protection Agency (EPA) announced the rollback, environmental groups were quick to object and so were some of the world’s biggest oil-and-gas companies. 

That’s partly because the rules introduced under President Barack Obama were not burdensome. They required oil-and-gas companies to take action to prevent methane leaks from new wells, pipelines and storage tanks. Companies have a reason to do this anyway as unlike CO2, methane is a fuel. And existing wells, which outnumber new ones, would have plenty of time to adapt — the EPA would have taken years to develop new standards for them. 

If Trump’s administration has its way, those wells won’t need to be checked for leaks. It would save oil-and-gas companies maybe $20 million a year — a drop in the bucket for a $100 billion-plus industry, a Bloomberg report said. No wonder oil majors aren’t impressed. The industry isn’t united in opposition — but the heavyweights understand the costs of bad publicity are more than a few million dollars each year.

But the EPA rollback wasn’t aimed at helping the big firms. Instead, the agency said it will help smaller oil-and-gas companies, many of which are drowning in debt, and would benefit from anything that reduces their compliance costs. The EPA estimated that the rollback would save companies a total of up to $19 million annually — a small sum for oil majors, but a significant expense for some other firms. 

The divide in the oil-and-gas industry foreshadows a coming conflict within the industry over how to deal with climate change. The voters agree that global warming is happening, is dangerous, and requires serious government action to stop it. Smart businesses understand this.

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