Methane, a short-lived but potent greenhouse gas, is the latest flashpoint between a Trump administration hellbent on advancing oil and gas interests and advocates for cleaner air and power sources.
Last week, Trump EPA delayed by two years a landmark rule put in place by the Biden administration that required oil and gas producers to upgrade equipment, identify and plug leaky wells, and monitor and track their methane emissions. It is expected to try to eliminate the rule altogether.
The delay, according to EPA’s own estimates, will lead to some 3.8 million tons of natural gas being flared, vented, or leaked rather than captured and sold, a loss estimated at about $170 million.
“The 2024 methane standards are already working to prevent that pointless waste of American energy—while reducing pollution, protecting people’s health, and lowering risks from weather disasters fueled by climate change,” said Rosalie Winn of the Environmental Defense Fund, one of 13 environmental groups that are suing the EPA. “Americans deserve cleaner air and less energy waste, but the Trump EPA’s final rule rushes us in the opposite direction.
Winn said that oil and gas companies in 2023 alone “wasted enough natural gas to cover all heating and cooking needs at 19 million homes,” the equivalent of “every home in Michigan, Pennsylvania, and Texas.”
In the spring, the EPA also repealed an Inflation Reduction Act rule that would have levied a per-ton methane fee on facilities that emit methane above a certain threshold. .
Competitive disadvantage
The move comes as hyperscalers are building new natural gas plants to fuel their AI ambitions, creating new sources of highly potent methane leaks. Methane has more than 80 times the warming power of carbon dioxide during its first 20 years in the atmosphere, and has contributed up to 30% of warming since the Industrial Age.
States including California and New Mexico are taking the lead. New Mexico in 2021 enacted methane rules similar to the Biden rule; it also required oil and gas operators to develop gas capture infrastructure. The rules, wrote Governor Michelle Lujan Grisham in October, cut the state’s oil and gas facility emissions in the Permian Basin by half compared to Texas, and yielded $125 million in captured natural gas and $27 million in tax and royalty revenue.
The methane rollback is part of a broader effort by the Trump administration and its EPA to stomp out clean energy alternatives that have a competitive cost advantage over fossil fuels.
The EPA has also proposed gutting the Greenhouse Gas Reporting Program, which for 15 years has required large US emitters including energy producers to report on their CO2, methane and other emissions. The framework has provided standardized, high-quality data that US businesses rely on to reduce risk, attract investment, drive innovation and compete globally, wrote Andrew Logan of the nonprofit Ceres in a recent guest post on ImpactAlpha.
Shareholders and even oil and gas companies support the regulation. As the EU rolls out tough new emissions limits for importers, “Relaxing US methane regulations will not protect our domestic oil and gas sector: it will leave American companies less competitive in a transitioning global market,” says Logan.
Logan urges investors to Introduce shareholder resolutions, updating engagement priorities, and backing multi-stakeholder initiatives will continue to drive this home.
