The American Petroleum Institute Tuesday plans to unveil a voluntary industry
program aimed at reducing methane emissions from US oil and natural gas
operations, an effort to launch as the Trump administration continues its push
to weaken and repeal methane rules finalized by the Obama administration.

The API initiative, known as The Environmental Partnership, will initially
include 26 oil and gas companies, including Shell, Pioneer Natural Resources
and Cabot Oil and Gas, in all major US plays, according to Erik Milito,
director of upstream and industry operations for API.

“It’s really a good foundation for us to have at the start,” Milito told S&P
Global Platts in an interview Monday.

Under the initiative, which will launch on January 1, participating companies
will: commit to implement leak monitoring using the latest detection methods;
replace or retrofit highly emitting pneumatic controllers; and attempt to
minimize emissions from manual liquids unloading for gas production sources.

“We’ve done it in a very surgical way so that we’ve picked programs that are
actually going to help us see tangible improvements and really provide us a
platform to really show continued emissions reductions,” Milito said.

Milito said the 26 companies already signed onto the program account for “tens
of thousands” of US oil and gas sites, including many with multiple wells. He
said the companies account for an estimated 25% of all domestic natural gas
production. The percentage of total oil output represented was unavailable, he
said.

The program is voluntary, however, and, outside of potential removal from the
program, there is no consequence for non-compliance. API will compile methane
data in an annual report from the partnership, but there will be no formal
monitoring and new industry standards implemented, Milito said.

“In the end, we’re going to see who is reporting and we’re going to see the
extent to which companies are reporting,” he said. “We think they’re all going
to do that, we’re fully confident they are.”

Despite the partnership, API has been a leading proponent of the Trump
administration “deregulatory” agenda, which is aimed at rolling back many of
the environmental protection rules put in place by the Obama administration.
Milito said Monday that API was supportive of “cost-effective regulations.”

On Monday, the Trump administration announced it would appeal a US District
Court for the Northern District of California ruling in October that it
violated federal law by freezing requirements in an Obama-era methane rule.

The rule, developed by Obama’s Bureau of Land Management, requires oil and gas
producers to use “available technologies and processes” to cut flaring in half
at oil wells on public and tribal lands and calls for increased leak
inspections and equipment upgrades.

Industry groups and the states of North Dakota, Wyoming and Montana have sued
to overturn the rule, arguing that it would shut in oil and gas production on
federal lands.

In July, the US Court of Appeals for the District of Columbia Circuit ruled
that the Environmental Protection Agency could not suspend an Obama-era rule
to restrict methane emissions from new oil and gas wells.

While questions over the future of federal methane regulations will likely be
complicated by court battles, industry will likely press forward with
voluntary programs, Milito said.

On November 22, eight of the world’s biggest energy companies, including
ExxonMobil, Royal Dutch Shell, Total and BP, signed on to a series of “guiding
principles” aimed at reducing methane emissions from their operations. The
principles include broad efforts to reduce venting and flaring, detect
emissions from leaking pipes and improve emissions data collection.

“Natural gas plays a major role in meeting global energy demand today,” the
voluntary agreement states. “Since natural gas consists mainly of methane, a
potent greenhouse gas, its part in the transition to the low-carbon future
will be influenced by the extent to which the oil and gas industry reduces its
methane emissions.”

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