The People of America's Oil and Natural Gas Indusry

EPA Should Recognize Market-Driven Climate Progress

Jack Gerard

Jack Gerard
Posted January 13, 2016

The Environmental Protection Agency (EPA) pledges to start 2016 “hitting the ground running” to build on a “monumental” 2015. In a blog post last week, EPA Administrator Gina McCarthy signaled her agency will continue its focus on methane and carbon regulations.

Absent from EPA’s plans was any acknowledgement that methane and carbon emissions are already down. Recognizing progress we’ve already made – and the market factors contributing to that success – is critical to avoiding costly, duplicative regulations that could undermine that progress, as well as economic growth.

Carbon emissions from the power sector have fallen to near 20-year lows, according to data from the Energy Information Administration (EIA). We’ve reduced carbon emissions more than any nation in the world. And we didn’t need the administration’s new Clean Power Plan to do it. America’s energy resurgence has produced an abundance of affordable natural gas, and power plants have steadily switched to this cleaner-burning power source.

Consumers are reaping the benefits in the form of lower prices. According to new EIA data,wholesale electricity prices at major trading hubs dropped 27 percent – 37 percent between 2014 and 2015, driven “largely by lower natural gas prices.” Rather than build on that proven, market-driven success, the Clean Power Plan encourages the power sector to rely on more intermittent sources like wind and solar, which could significantly increase energy costs for families and businesses.

Since 2005, methane emissions are down 11 percent from natural gas systems and 79 percent from hydraulically fractured natural gas wells. Emissions have plunged while natural gas production has soared thanks to voluntary efforts and technological investments from the oil and natural gas industry.

methane 

As the primary component of natural gas, methane is used to heat homes and generate clean-burning electricity; producers have every incentive to find new ways to capture and sell it to consumers. Imposing new regulations on top of the successful, voluntary system threatens to undermine progress and make it more costly to produce the very natural gas that has been instrumental in cutting carbon emissions.


While the EPA is making New Year’s resolutions, here’s a suggestion: Don’t overlook the success of market-driven solutions. Our progress in reducing emissions has been achieved not through government-directed, one-size-fits-all regulations but through market forces and innovation from a skilled American workforce. Regulations that ignore market conditions and economic reality run the risk of undercutting an energy renaissance that is saving consumers billions.

ABOUT THE AUTHOR

Jack N. Gerard is president and CEO of the American Petroleum Institute (API), the national trade association that represents all aspects of America’s oil and natural gas industry. He also has served as the president and CEO of trade associations representing the chemical and mining industries. Jack understands how Washington works. He spent several years working in the U.S. Senate and House, and co-founded a Washington-based government relations consulting firm. A native of Idaho, Jack also is very active in the Boy Scouts of America, a university graduate program on politics, and his church’s leadership. He and his wife are the proud parents of eight children, including twin boys adopted from Guatemala.