EPA Aims To Roll Back Limits On Methane Emissions From Oil And Gas Industry
The Environmental Protection Agency has released a proposed rule that could roll back requirements on detecting and plugging methane leaks at oil and gas facilities.
Charlie Riedel/AP
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Charlie Riedel/AP
The Trump administration is proposing to slash restrictions on the oil and gas industry for methane emissions, a greenhouse gas that is a powerful driver of climate change.
Environmental groups are alarmed. “This would be a huge step backward,” said Ben Ratner, a senior director at the Environmental Defense Fund. “It would cause greatly increased pollution and a big missed opportunity to take cost effective immediate action to reduce the rate of warming right now.”
The Trump administration argues it would save the oil and gas industry $17 million to $19 million annually in compliance costs. But that’s “such a small fraction of the industry total cash flow that it’s just laughable,” says Harvard University’s Steven Wofsy, a professor of atmospheric and environmental science.
The Trump administration also says it does not anticipate an increase in the level of methane emissions if the proposal is implemented — but scientists disagree with that assumption.
Methane powerfully traps heat, and can warm the atmosphere at 25 times the rate of carbon dioxide. According to the Environmental Protection Agency, the oil and gas industry is the largest source of methane emissions in the U.S.
In March 2017, Trump ordered agencies to “review existing regulations that potentially burden the development or use of domestically produced energy resources.” This proposal came out of that review.
In a statement describing the proposal, EPA Administrator Andrew Wheeler reiterated an argument against such regulations often used by the oil and gas industry: “The Trump Administration recognizes that methane is valuable, and the industry has an incentive to minimize leaks and maximize its use.”
Critics of that logic say that it doesn’t always make immediate economic sense for companies to upgrade old, leaky equipment for newer models, even if they could use the leaked methane.
Industry reaction was mixed. The American Petroleum Institute welcomed the rollback. “The oil and natural gas industry is laser-focused on cutting methane emissions through industry initiatives, smart regulations, new technologies, and best practices,” said Erik Milito, API’s Vice President of Upstream and Industry Operations.
But some oil and gas companies, including Shell, BP and Exxon, have actually supported the Obama-era regulations.
“Shell remains committed to achieving our target of maintaining methane emissions intensity below 0.2% by 2025 for all operated assets globally,” Shell U.S. President Gretchen Watkins said in a statement. “Despite the Administration’s proposal to no longer regulate methane, Shell’s U.S. assets will continue to contribute to that global target.”
The greenhouse gas methane is released at many points in the industry: “Methane is emitted to the atmosphere during the production, processing, storage, transmission, and distribution of natural gas and the production, refinement, transportation, and storage of crude oil,” the EPA has said.
The EPA’s main proposal on methane, released Thursday, would “remove sources [from regulation] in the transmission and storage segment of the oil and gas industry.” It would also rescind emissions limits on methane from the production and processing steps.
The Trump administration points out that U.S. methane emissions are on a downward trend, and argues that will continue, despite the rollback to regulations. In a phone call with reporters, EPA acting assistant administrator for the Office of Air and Radiation Anne Idsal said that existing limits for ozone-forming volatile organic compounds will remain in place for the industry’s production and processing sectors.
“Frankly, the controls to reduce VOC emissions also reduce methane emissions at the same time, so we don’t believe that separate methane limitations for that segment of the industry are necessary – and quite frankly, are redundant,” Idsal said.
Stanford University’s Adam Brandt, an energy resources engineering professor who focuses on greenhouse gas emissions, does not agree.
“This proposal is likely to result in higher methane emissions and to stall progress the industry has made in detecting and fixing leaks,” he said. Brandt also said existing limits on VOCs will not reduce methane emissions as much as is needed to meet climate goals.
Harvard scientist Wofsy agreed that there’s no evidence the rollback won’t increase methane emissions. “I think it will have significant negative impact,” he says.
He said this proposal withdraws regulations from parts of the oil and gas industry notorious for emitting methane, such as storage tanks.
New York Attorney General Letitia James decried the plan as part of an “unconscionable assault on the environment,” and vowed to “use the full power of my office to fight back against this.”
The proposal will go through a 60 day public comment period, and the EPA will hold a hearing about it in Texas. If the change becomes final, it will likely face legal challenges. That means the proposal might not take effect before the 2020 election.
NPR’s Jeff Brady contributed to this report.
At The U.S. Open, The Ball’s In Their Court — And It’s Their Job To Pick It Up
Bill Of The Month: Estimate For Cost Of Hernia Surgery Misses The Mark
Before scheduling his hernia surgery, Wolfgang Balzer called the hospital, the surgeon and the anesthesiologist to get estimates for how much the procedure would cost. But when his bill came, the estimates he had obtained were wildly off.
John Woike for Kaiser Health News
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John Woike for Kaiser Health News
From a planning perspective, Wolfgang Balzer is the perfect health care consumer.
Balzer, an engineer, knew for several years he had a hernia that would need to be repaired, but it wasn’t an emergency, so he waited until the time was right.
The opportunity came in 2018 after his wife, Farren, had given birth to their second child in February. The couple had met their deductible early in the year and figured that would minimize out-of-pocket payments for Wolfgang’s surgery.
Before scheduling it, he called the hospital, the surgeon and the anesthesiologist to get estimates for how much the procedure would cost.
“We tried our best to weigh out our plan and figure out what the numbers were,” Wolfgang said.
Share Your Story And Bill With Us
If you’ve had a medical-billing experience that you think we should investigate, you can share the bill and describe what happened here.
The hospital told him the normal billed rate was $10,333.16, but that Cigna, his insurer, had negotiated a discount to $6,995.56, meaning his 20% patient share would be $1,399.11. The surgeon’s office quoted a normal rate of $1,675, but the Cigna discounted rate was just $469, meaning his copayment would be about $94. (Although the Balzers made four calls to the anesthesiologist’s office to get a quote, leaving messages on the answering machine, no one returned their calls.)
Estimates in hand, they budgeted for the money they would have to pay. Wolfgang proceeded with the surgery in November, and, medically, it went according to plan.
Then the bill came.
The patient: Wolfgang Balzer, 40, an engineer in Wethersfield, Conn. Through his job, he is insured by Cigna.
Total bill: All the estimates the Balzers had painstakingly obtained were wildly off. The hospital’s bill was $16,314. After the insurer’s contracting discount was applied, the bill fell to $10,552, still 51% over the initial estimate. The contracted rate for the surgeon’s fee was $968, more than double the estimate. After Cigna’s payments, the Balzers were billed $2,304.51, much more than they’d budgeted for.
Service provider: Hartford Hospital, operated by Hartford HealthCare
Medical procedure: Bilateral inguinal hernia repair
What gives: “This is ending up costing us $800 more,” said Farren, 36. “For two working people with two children and full-time day care, that’s a huge hit.”
When the bill came on Christmas Eve 2018, the Balzers called around, trying to figure out what went wrong with the initial estimate, only to get bounced from the hospital’s billing office to patient accounts and finally ending up speaking with the hospital’s “Integrity Department.”
They were told “a quote is only a quote and doesn’t take into consideration complications.” The Balzers pointed out there had been no complications in the outpatient procedure; Wolfgang went home the same day, a few hours after he woke up.
The couple appealed the bill. They called their insurer. They waited for collection notices to roll in.
Hospitalestimates are often inaccurate and there is no legal obligation that they be correct, or even be issued in good faith. It’s not so in other industries. When you take out a mortgage, for instance, the lender’s estimate of origination charges has to be accurate by law; even closing fees — incurred months later — cannot exceed the initial estimate by more than 10%. In construction or home remodeling, while estimates are not legal contracts, failure to live up to them can be a basis for liability or a “claim for negligent misrepresentation.”
In this case, Hartford Hospital produced an estimate for Balzer’s laparoscopic hernia repair, CPT (current procedural terminology) code 49650.
The hospital ran the code through a computer program that produced an average of what others have paid in the past. Cynthia Pugliese, Hartford Health’s vice president of revenue cycle, said the hospital uses averages because more complicated cases may require additional supplies or services, which would add costs.
“Because it was new, perhaps the system doesn’t have enough cases to provide an accurate estimate,” Pugliese says. “We did not communicate effectively to him related to his estimate. It’s not our norm. We look at this experience and this event to learn from this.”
Efforts to make health care prices more transparent have not managed to bring down bills because the different charges and prices given are so often inscrutable or unreliable, says Dr. Ateev Mehrotra, an associate professor of health care policy and medicine at Harvard Medical School.
“The charges on there don’t make any sense. All it does is, people get pissed off,” Mehrotra said. “The charge has no link to reality, so it doesn’t matter.”
Resolution: “Because I roll over more easily than my wife does, I’m of the mindset to pay it and get done with it,” Wolfgang said. “My wife says absolutely not.”
Investigating prices, dealing with billing departments and following up with their insurer was draining for the Balzers.
“I’ve been tackling this since December,” Wolfgang says. “I’ve lost two or three days in terms of time.”
For the Balzers, there’s a happy ending. After a reporter made inquiries about the discrepancy between the estimate and the billed charges — six months after they got their first bill — Pugliese told them to forget it. Their bill would be an “administrative write-off,” they were told.
“They repeatedly apologized and ended up promising to adjust our bill to zero dollars,” Wolfgang wrote in an email.
The takeaway: It is a good idea to get an estimate in advance for health care, if your condition is not an emergency. But it is important to know that an estimate can be way off — and your provider probably is not legally required to honor it.
Try to request an estimate that is “all-in” — including the entire set of services associated with your procedure or admission. If it’s not all-inclusive, the hospital should make clear which services are not being counted.
Having an estimate means you can make an argument with your provider and insurer that you shouldn’t be charged more than you expected. It could work.
Laws requiring at least a level of accuracy in medical estimates would help. In a number of other countries, patients are entitled to accurate estimates if they are paying out-of-pocket.
Most patients aren’t as proactive as the Balzers, and most wouldn’t know that the hospital, surgeon and anesthesiologist would all bill separately. And most wouldn’t fight a bill that they could afford to pay.
The Balzers say they wouldn’t have changed their medical decision, even if they had been given the right estimate at the beginning. It’s the principle they fought for here: “There’s no other consumer industry where this would be tolerated,” Farren wrote in an email.
Bill of the Month is a crowdsourced investigation by Kaiser Health News and NPR that dissects and explains medical bills. Do you have an interesting medical bill you want to share with us? Tell us about it!
The Thistle & Shamrock: Mícheál Ó Domhnaill
Mícheál Ó Domhnaill
Greg Duffy/Courtesy of the Estate of Mícheál Ó Domhnaill
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Greg Duffy/Courtesy of the Estate of Mícheál Ó Domhnaill
We remember Mícheál Ó Domhnaill, one of Ireland’s most influential artists, with the music he recorded and produced over three decades.
