August 13, 2020 Read More →

Trump’s methane rule rollback sets up losses for Big Oil


The Trump administration has, ironically, just bucked the wishes of Big Oil by acting today to roll back regulations on methane emissions — the most potent greenhouse gas of them all.

The move is political as much as it is ideological: smaller oil and gas producers have been struggling long before the coronavirus hit and as such, they have been clamoring for regulatory relief. At the same time, unconventional oil and gas production is big in two key battleground states this November: Texas and Pennsylvania. And anything that Trump can do to accentuate the differences between himself and Joe Biden could help him in those states. 

But the move also comes with risks. Companies such as BP, Exxon Mobil Corp. XOM +0.4% and Royal Dutch Shell have already made major investments to capture escaping methane from their pipes and drilling equipment — money that has earned them positive PR and potentially even greater profits. For starters, the methane can be resold and used in the manufacturing and chemical processes. Even more compelling is that those energy producers are banking big on natural gas — a fuel that has about half the carbon content as does coal. But loose methane, which is 80% more potent than CO2, could block the path forward.

The concerns among the smaller, independent shale-gas frackers are real: The Sightline Institute along with the Institute for Energy Economics and Financial Analysis investigated and found that there is an “alarming volume of red ink.” From 2010 through early 2019, the 29 fracking-focused oil and gas companies they surveyed racked up negative cash flows of $184 billion — similar to what the International Energy Agency found: $200 billion negative cash flows between 2010 and 2014. 

[Ken Silverstein]

More: Rolling Back Obama’s Methane Rules May Give Trump A Bump But It Could Burn Natural Gas

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