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Expanded Methane Regs Among Possible Amendments to Senate Energy Bill

As the Senate prepares to vote on a comprehensive energy reform bill as early as this week, a number of Senate Democrats are pushing the Environmental Protection Agency (EPA) to expand its proposed oil and gas methane emissions limits.

Last week, a group of 21 senators, led by Sens. Brian Schatz (D-HI) and Sheldon Whitehouse (D-RI), penned a letter to EPA Administrator Gina McCarthy urging regulators to go beyond current plans to limit methane emissions from the oil and gas industry.

The senators wrote that they “strongly support many features” of EPA’s proposed methane rule, which would apply to new and modified sources in the oil and gas industry.

“However, several critical sources of methane emissions were omitted from EPA’s proposal, including liquids unloading, pneumatic controllers that operate on an intermittent basis, compressors at well sites and some storage vessels,” they wrote. “These sources are associated with significant methane emissions, and low cost controls exist for all of them. We therefore urge EPA to cover them in the final rule.”

The senators also asked EPA to propose methane emissions standards for existing sources “under the categories covered by the proposed NSPS [new source performance standards], as well as the additional categories” detailed in the letter.

“Addressing methane from existing oil and gas sources is one of the most significant steps we can take to reduce our greenhouse gas emissions and bolster the effectiveness of” the Obama administration’s Climate Action Plan, they said. The lawmakers argued that regulating methane from existing oil and gas industry sources would be necessary in order to meet international commitments made during the December climate talks in Paris (see Daily GPI, Dec. 14, 2015).

Schatz has made a push to include language on methane regulations in the energy bill currently being debated on the Senate floor, submitting an amendment to require EPA to issue a proposed rule “to amend the existing source performance standards for the oil and natural gas source category by setting standards for methane emissions” no later than 240 days after passage of the legislation.

Meanwhile, observers continue to look on as the Senate debates its first comprehensive energy reform bill since 2007, dubbed the Energy Policy Modernization Act of 2015. The bill, led by Sens. Lisa Murkowski (R-AK) and Maria Cantwell (D-WA), passed through committee last summer (see Daily GPI, July 31, 2015). Among other things, the bill would help speed up approval for liquefied natural gas (LNG) export projects.

American Petroleum Institute President Jack Gerard wrote a letter last week to Senate leadership in support of the bill. In particular, he praised measures to speed up reviews of LNG infrastructure.

The bill “provides a streamlined process for natural gas export projects before the Department of Energy, which will accelerate America’s rise as a world-class exporter of natural gas, create U.S. jobs, grow our economy, and will significantly strengthen the global energy market,” Gerard wrote.

Still, with more than 200 amendments proposed so far, some analysts have wondered whether the legislation will be undone by political grandstanding.

In a note released Monday, analysts with ClearView Energy Partners LLC said they see two possible outcomes for the bill: either “a consensus bill facilitated by resolution of hot-button issues such as wind and solar power incentives and crude oil exports within December’s FY2016 spending package [see Shale Daily, Dec. 16, 2015]” or “a proxy battleground for election-year partisan rancor.

“The first outcome seems more likely to us,” ClearView said, noting incentive for Senate Republicans to “demonstrate leadership competence instead of a ‘messaging’ exercise to fulfill an ideological litmus test.”

But while the White House has signaled “support for a middle-of-the-road bill...neither House Speaker Paul Ryan (R-WI) nor conservatives within his caucus may be eager to cede their hardline stances on climate policy and fossil energy production until after the election.”

The House of Representatives passed its own energy reform bill in December (see Daily GPI, Dec. 3, 2015).

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