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'Significant' Election Could Affect Methane Rule, INGAA Chief Says

The natural gas pipeline industry's concerns about U.S. Environmental Protection Agency plans to regulate methane emissions from existing sources are similar to those it has for an earlier proposal to limit emissions from new and modified sources, a pipeline trade association president said Tuesday. Much could depend upon the upcoming presidential election.

Earlier this month the Obama administration announced plans to limit methane emissions from existing sources, including pipeline facilities (see Shale DailyMarch 10). This followed the announcement of plans to cut methane emissions from new and modified sources (see Shale DailyAug. 18, 2015Jan. 14, 2015).

"...[O]ne of the things on this [administration's] climate agenda that most affects us is methane emissions," Interstate Natural Gas Association of America President Don Santa said at the Pipeline Opportunities Conference in Houston. "I think none of us disagree with the notion of limiting methane emissions, but the thresholds within the rule for leak repair, the timelines for repairing those leaks and a number of other things are very, very unrealistic in our eyes."

Santa was speaking first of a pending rule to limit emissions from new and modified sources. Repairing a leak could require a full blowdown of pipeline facilities, which could release far more methane into the atmosphere than the leak itself would over a period of a couple of years (see Shale DailyDec. 7, 2015). A rule on emissions from new and modified sources could be a done deal before Obama leaves the White House.

"Clearly for the president...the climate issue has become a legacy issue," Santa said.

The future of a later rule to limit emissions from existing sources is far from certain, though. "That rule will probably not see the light of day during the remaining months of this administration, or if it does, it will be a proposal that is not yet finalized," he said. "It clearly sets the stage, particularly if a Democrat were to win the White House in November, to move ahead with regulation of existing sources.

"...I think our greatest concern would be to what degree are the repair thresholds and criteria and things like that just so unrealistic as to create some challenges in terms of the economics, to create challenges in terms of the effect on pipeline operations and also the question of how you deal with blowdowns..."

The upcoming election will be "very, very significant" for the pipeline industry, Santa said, noting that the two parties are far apart on climate and energy issues.

"...[F]or the Democrats and the two [presidential] candidates there, it is all climate, all the time. Clearly for the Democratic party's key constituencies, the climate issue is a big driver that becomes linked with energy policy and is featured fairly significantly in their discussions and their debates.”

Hillary Clinton has voiced skepticism about hydraulic fracturing (see Shale DailyMarch 15), while opponent Bernie Sanders has expressed outright hostility to fossil fuels. Sanders has pulled Clinton's views further to the left, Santa said. "Going back to 2008, she got outflanked on the left by Obama. She's not going to let that happen again," he said. "So if anything, you've seen the positions there gravitate further and further to the left."

Recently, however, in a speech at Ohio State University just before the Ohio primary, Clinton appeared to moderate her views, acknowledging the power of the states in energy regulation. “I will do everything I can as president to set the rules, to set the regulations, to try to figure out how to influence states."

Among Republicans, who are generally friendly to the energy industry, there has been little talk of energy and the environment, Santa said. "You can summarize it by saying 'all of the above' is their approach to these things, but you don't seem to get much discussion."

While times are tough out in the shale energy patch, there hasn't been much talk of industry troubles in Washington, DC, he said. During a recent market update at the Federal Energy Regulatory Commission there was some discussion of low commodity prices and their effect on power markets (see Daily GPIMarch 17). However, the broader effect of the energy commodities price downturn has passed mostly without comment in the nation's capital.

"As part of the larger discussion of things, the ripple effect of the downturn in commodity prices, the impact upstream, how that's affecting pipelines and all of that, it really is not much of a factor when you consider the discussion in Washington, DC,” Santa said.

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