US may toughen oil, gas rules after CO2 rule delay

OREANDA-NEWS. February 15, 2016. The US Supreme Court's decision this week to delay implementation of the Clean Power Plan could add pressure on President Barack Obama to finish tough new rules affecting the oil and gas sector.

Finalizing stringent oil and gas rules could help the Obama administration support a climate legacy that now stands on shakier legal ground. The Supreme Court on 9 February stayed the Clean Power Plan until all legal appeals are exhausted, delaying the regulation until well after a new president takes office in January 2017.

The Obama administration had been leaning heavily on the Clean Power Plan to meet commitments it made in Paris last year to emit about 1,200mn tons/yr less CO2 in 2025 than it emitted in 2013. US officials expected the Clean Power Plan by itself would cut CO2 emissions by about 870mn tons/yr when it was fully implemented in 2030.

The new uncertainty associated with those emission reductions could push administration officials to pivot their regulatory attention to other sources, experts say, particularly the oil and gas sector. Energy lobbyist Mike McKenna said he expects administration officials will "do their best to be especially stringent on other rules."

Those other rules include first-time methane limits for new sources, proposed flaring limits on federal lands and tighter offshore drilling safety rules. The Obama administration earlier this month also made a long-shot request for Congress to approve a new \\$10/bl fee on petroleum products.

"On one hand there is a little bit of a sense of what more can [Obama] do?" American Petroleum Institute market development executive director Marty Durbin said yesterday. But the administration may consider pushing other rules because of the delay of the Clean Power Plan, he said.

Oil sector officials expected the administration would adopt stringent rules for the oil and gas sector during its final year of office, with or without the setback in the Supreme Court. The most likely outcome, they say, will be that the Obama administration increases its efforts to finalize a slew of oil and gas rules.

"We have seen them wanting to take the tougher route all along," said Independent Petroleum Association of America executive vice president Lee Fuller. "It will certainly steel their intent to finish these regulations this year.

Republican lawmakers are already voicing concerns over the potential for new climate rules. House Agriculture Committee chairman Mike Conway (R-Texas) today pressed the head of the US Environmental Protection Agency (EPA) to promise to not "go around the courts to do what you are trying to get done."

EPA administration Gina McCarthy said the agency would respect the Supreme Court ruling but said "in the meantime, we are going to continue to address greenhouse gases with the authorities under the Clean Air Act."