If at first you don’t succeed try…recycling? That’s the playbook behind a new report stating that “50,000 jobs would be created” by methane regulations, which was released this week through the “Bluegreen Alliance.”
The “Bluegreen Alliance” includes some unions, regulation supporters like the Environmental Defense Fund (EDF) and several anti-fracking groups like the Sierra Club, Natural Resources Defense Council, and the Union of Concerned Scientists. The report itself is essentially a reprint of a report by Earthjustice, the Sierra Club, and the Environmental Defense Fund (EDF) published just a few months ago that also claimed new methane regulations would “create good jobs” – and that report was based off of a 2014 EDF-commissioned report that presented the same argument. However, the facts show otherwise.
Ohio “jobs created” not based on facts
The Bluegreen Alliance report draws heavily on a 2014 EDF report, noting:
“A 2014 report from Datu Research, The Emerging U.S. Methane Mitigation Industry, further explains existing technologies with a focus on identifying and exhibiting companies that produce the products and services. They found that: At least 76 firm manufacture methane mitigation equipment in the United States and/or offer services…”
That previous Datu Research report that EDF launched in 2014 identified 13 Ohio companies that would be so-called job creators from additional methane regulations. That 2014 report included Ohio companies such as Ariel Corporation, and Dearing Compressor as case studies of companies that would benefit from federal regulations of methane.
However the report in 2014 – as well as the two reports rehashing that data – still fails to address the fact that these companies are already working with the oil and natural gas industry. This is clearly noted in a white paper by Ariel, that specifically addresses the oil and natural gas industry’s voluntary work to move toward a “near zero leakage rate.” Brad Couch, CNG Business Development Manager at Ariel, wrote a blog that stated:
“Once again, the natural gas industry has taken another voluntary step to further reduce fugitive emissions of compressor stations. As the natural gas industry pushes to improve best available technology to continue to decrease fugitive emissions, new multi-continent, cross agency research shows methane increase is atmosphere caused by natural causes, not the natural gas industry contrary to what some so vehemently espouse. A whitepaper recently released by Ariel, a natural gas leading compressor manufacturer, illustrates their success creating a packing system that for more than half the study group had undetectable fugitive emissions after 4 years of nearly continuous service. Undetectable, as in none detected! Find the paper here.”
The point is that activists groups refuse to admit that the oil and natural gas industry are already utilizing companies, like Ariel Corporation in Ohio, to develop best practices and technology to address fugitive methane.
These jobs are not new; they have already been put into play, primarily through voluntary efforts. Essentially what Bluegreen Alliance has done is pull a list of all the companies in Ohio that manufacture or service equipment to mitigate methane and packaged them up into so-called “new jobs” that would be created. That is simply not the case, which is why 14 states (including Ohio) have sued the EPA over this rule.
Federal methane rules a solution in search of problem
Nationwide, EPA’s methane regulations would have a detrimental effect on jobs, particularly for small oil and gas producers.
In fact, under EPA’s new methane rules, the thousands of family-owned businesses that operate marginal wells — smaller wells that produce 15 barrels or less per day, or 90,000 cubic feet or less of natural gas per day — could be wiped out. The Interstate Oil and Gas Compact Commission’s (IOGCC) 2015 Marginal Well Report finds the elimination of both marginal oil and natural gas wells developed in 2015 would trigger an estimated direct loss of 57,560 jobs in the oil and gas sector and $4.4 billion in direct earnings within the survey’s 29 states. Yet this report actually only looks at “stripper wells,” which are wells producing 10 barrels or less per day and 60 thousand cubic feet or less of natural gas per day. So if you were to evaluate job and GDP losses from eliminating all marginal wells, the impact would be even greater. And that’s not to mention the impact it would have on all smaller oil and gas producers.
West Virginia’s Attorney General Patrick Morrissey summed up the methane rule best when hesaid,
“This is yet another example of unlawful federal overreach jeopardizing West Virginia jobs and working families. The rules are a solution in search of a problem and ignore the industry’s success in voluntarily reducing methane emissions from these sources to a 30-year low.”
EDF’s 20114 report, and this this not-so-new report by the Bluegreen Alliance, argue that methane regulations would cost “just one cent per thousand cubic feet of gas produced,” but that claim is based largely on EDF’s assumption of high gas prices ($4/mcf) and that the methane could be captured and sold at that profitable price. But natural gas prices have remained below $3/Mcf over the past 15 months and that’s one reason why a recent ICF study found EPA’s regulations would be nearly five times greater than what EDF has claimed.
In the Appalachian Basin these number could be even more staggering, as wellhead prices for many wells in Utica and Marcellus Shales in the state of Ohio, Pennsylvania, and West Virginia have realized a local natural gas price decline of 60 percent in the last five years, as a result of dramatic increases in natural gas production.
Activists use methane regulations as cover for real agenda: to ban fracking
According the Bluegreen Alliance website,
“[A]s we face increasingly severe impacts of environmental challenges like climate change and adapt to an interconnected global economy, we can no longer choose one or the other. We believe we can and must choose both.”
However, the primary groups behind the Bluegreen Alliance do not want to “choose both” and do not offer an “all of the above” energy platform — they simply want to ban fracking. Period. The proposed methane regulations and groups that support them, which include many outside the mainstream activist groups, including Sierra Club, Natural Resources Defense Council have made it clear that their goal is to stop all oil and natural gas development in Ohio, not to simply regulate methane. According to Sierra Club’s campaign against natural gas website,
“Fracking for natural gas damages the land, pollutes water and air, and causes illness in surrounding communities. It is also a major threat to our climate. It is clear that we cannot transition from one fossil fuel to another and expect to see major climate benefits. We need to move beyond natural gas.”
So while these groups are trying to play the jobs card to sell more regulations, in Ohio these “new jobs” for methane mitigation are already in fact in existence. In reality, these anti-fracking groups have one goal— and that is to fundamentally and completely abolish all development of oil and natural gas. As the US Chamber recently reported, had these groups been successful in their quest, Ohio would have lost over a hundred thousand jobs over the past five years.
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