Methane Madness

August 12th, 6:51pm August 12th, 6:51pm

David KreutzerNow serving as IER's Senior Economist, David Kreutzer worked at The Heritage Foundation from 2008 to 2018. Among other positions there, he served as Senior Research Fellow in Energy Economics and Climate Change and as Senior Research Fellow in Labor Markets and Trade. In 2017, he left Heritage for two months to serve on the presidential transition team at the Environmental Protection Agency. A native of Fairfax County, Virginia, David paid for his undergraduate education working as a lab technician at the Communications Satellite Laboratories via the Cooperative Education Program at Virginia Tech. He earned his undergraduate and master’s degrees from Virginia Tech and received the first Ph.D. in economics from George Mason University. David taught economics for 23 years at James Madison University and for three years before that at Ohio University. He has published in peer-reviewed journals such as The Journal of Political Economy, Climate Change Economics, The National Tax Journal, Economic Inquiry, and Applied Economics. He has written for popular publications including The Wall Street Journal, The Washington Post, The Plain Dealer (Cleveland), and The Orange County Register. He has also done hundreds of guest spots and interviews on television and radio. He lives with his wife in Falls Church, Virginia.

Gas and Oil

The recent hysteria over the EPA’s decision to pull back the Methane Rule, curiously implemented at the very end of the Obama/Biden administration, simply does not square with the numbers.  Methane emissions were declining significantly before the rule went into effect.  That is, the costly regulation was unnecessary.

It may be worth reminding ourselves that oil and gas companies make money by selling oil and gas (natural gas, primarily methane).  Gas that leaks out of the system cannot be sold and, so, does them no good.  In addition, there already were regulations in place making compliance with much of the Methane Rule a costly redundancy.  In any event, despite dramatic increases in oil and natural gas production over the past several decades, methane emissions dropped, without the EPA’s Methane Rule.

Data from the EPA and the Department of Energy show a huge improvement in methane emissions before the 2016 implementation of the Methane Rule.  Between 1990 and 2015, natural gas production in the U.S. went up by 55 percent.  Over that same period, methane emissions from our natural gas system went down by 23 percent.  Per unit of production, emissions dropped by 50 percent.

In addition, recent data for the Permian and the Appalachian Basins is even more dramatic.  Employing high-tech smart drilling, these two basins have led the U.S. to energy dominance.  Between 2011 and 2018, the stunning increases in energy production from each of these areas were associated with large declines in methane emissions.  Emissions per unit of energy production dropped 57 percent in the Permian Basin and by 82 percent in the Appalachian Basin.

The good news on methane emissions is part of the bigger good news story on energy.  Over the past decade, the U.S. has flipped the script on energy prices and politics.  Ingenuity and uniquely American forms of resource ownership turned the U.S. from the world’s largest energy importer, to the world’s largest energy producer.  In the process, some of the most problematic and unfriendly regimes in the world have had their outsized influence cut down.  Furthermore, the boom in energy led to a resurgence in manufacturing here at home.

However, this wonderful news is bad news for those who see their ineffectual and overpriced alternatives undercut by affordable American oil and gas.  For them, keeping our natural resources locked away is the goal, whether by mandate or by simply making oil and gas unaffordable through costly regulation.  They rally around the battle cry of “Keep it in the Ground.” When they wail about the EPA decision leading to more pollution, they hope nobody will look at the actual data that show improvements virtually everywhere you look.

Repealing unnecessary, unproductive and costly rules is good government.  The EPA should be applauded for their common sense, and for standing up to the bullying and misinformation of the well-funded climate-industrial complex.