US revises key metric to justify methane rollback

The legal fate of efforts by President Donald Trump's administration to roll back restrictions on oil and gas sector methane emissions could hinge on a claim the damage from the potent greenhouse gas is far lower than previously thought.

The climate-related costs from uncontrolled methane releases, such as higher seas and stronger storms, were pegged at upwards of $1,100/tonne two years ago. That estimate, dubbed the social cost of methane, helped former president Barack Obama's administration justify requiring the oil and gas sector to spend millions of dollars to capture methane, which causes about 25 times more warming than CO2 emissions over a century.

But the Trump administration, in two deregulatory actions this month, now estimates the climate damage from methane emissions is as low as $46/tonne. That meant one rule expected to capture enough methane on public land to offset the annual emissions of nearly 1mn automobiles generated as little as $66mn in climate benefits, down from $1.6bn under the earlier metric.

US regulators last week cited those low benefits to justify rescinding most of those rules.

The same trend played out with a different rule proposing to reduce the frequency of methane leak detection programs at new oil and gas facilities.

The debate over how to calculate future damage from greenhouse gas emissions will be among the top issues for the methane rule rollbacks as they wind their way through court, experts say. The outcome of those legal battles could imperial not just methane rules but also tie up other regulatory initiatives, such as plans to relax vehicle fuel-economy standards and ease climate regulations for power plants.

"It could be a big issue for the rollbacks," Natural Resources Defense Council attorney Benjamin Longstreth said.

The US first estimated the "social cost" of greenhouse gases around 2010 as the Obama administration tried to calculate the benefits of reducing carbon emissions from cars and pickup trucks. The agency pegged the metric to the global damages from a warming climate, based on the rationale that climate change is a global problem that could not be solved if countries only focused on domestic harms.

The Trump administration, in contrast, has decided to only consider the likely climate damage in the US, which is at least 90pc lower than the global value. It also started calculating damages based on a higher "discount rate," an economic term that reflects how much society is willing to pay now to avoid future harm. That change causes calculated damages from greenhouse gas emissions to decline by as much as 70pc.

The administration's critics say focusing only on domestic climate damage is clearly inadequate because it ignores US links to the rest of the world and the global extend of the problem.

"Of course it affects US interests when there is severe flooding or wildfires in other countries, if supply chains are interrupted, if customers for our products are not there, if there are new security crises," Institute for Policy Integrity legal director Jason Schwartz said.

The administration's defenders say calculating future climate benefits from reducing greenhouse gas emissions is highly uncertain and complex, making it unlikely the courts will intervene. Oil industry officials also say the administration is on firm legal footing in rescinding the methane restrictions because the primary justification is they lacked legal authority to regulate.

US agencies typically have the upper hand in court on scientific issues such as calculating climate damages, but courts can intervene if a decision is arbitrary or poorly supported. A federal appeals court in California in 2008, for example, rebuked regulators for not assigning any value to the climate benefits of reducing greenhouse gas emissions through tougher fuel-economy standards.

"While the record shows that there is a range of values," the court said, "the value of carbon emissions reduction is certainly not zero."