New EPA rule may hurt oil industry

The American Petroleum Institute decried the United States Environmental Protection Agency (EPA) for its new set of emission rules embodied in the New Source Performance Standards.  According to the Director of Regulatory and Scientific Affairs for API, Howard Feldman, the rules might constrain the O&G industry to shell out US$783M.

It may be unfair for the industry to release such amount merely for EPA compliance when it can channel it to other vital projects that call for investing in oil exploration and production.

“We haven’t opposed the rule, but we’ve asked for changes to make it more workable, and achieve emission reductions cost-effectively and safely while allowing oil and gas development to continue,” informed Feldman.

While API is not privy to the final ruling, Feldman says that the agency might file a complaint as soon as the rules are out and finalized.

“We’re just asking that the cost effectiveness of the mandate is consistent with those imposed on other industries,” Feldman added.

In a letter to Administrator of the EPA, Lisa Jackson, Jack Gerard, the API president/CEO intimated that the EPA should factor in the varying type, size, and operational peculiarity of O&G industry players before finalizing the emission reduction rules.

Somehow, the new set of rules will have impact on the current investment strategies of each company, particularly on acquisition of new equipment or technology upgrades, a factor which may be detrimental to related industries in the national economy.

Another issue brought up is that the EPA may have ignored the fact that some companies are not yet fully equipped to meet EPA’s conditions and deadlines. The EPA assured that the industry will benefit cost-wise, but the O&G sector is not convinced.  It is anxious that it might end up coughing out more cash for investments in new technology.

America’s Natural Gas Alliance Chief Economist Sara Banaszak also believes that the EPA’s new rules could be lacking in cost-benefit analysis.  She also claimed that the new set of rules was founded on erroneous sources.

Feldman emphasized that the industry is already doing its part in terms of reducing emissions through green completion technology. He disclosed that the current technology is very cost efficient.

The EPA was delayed in the submission of updated rules and Wild Earth Guardian had filed a complaint against the agency.  It is now facing court order to finally submit said new rules.

By Chris Termeer