“Methane emissions from existing sources in the oil and gas sector are substantially higher than we previously understood," according to EPA Administrator Gina McCarthy at the IHS CERAWeek conference. In a blog post about EPA’s proposed methane rule last year, which was “attacked” by an industry trade association, RFF’s Alan Krupnick argues that, according EPA’s Regulatory Impact Analysis, the social benefits of reducing greenhouse gases and hazardous air pollutants justify the costs to industry. He also notes that industry and the agency should be looking across the entire natural gas and oil sector, including the production, processing, transmission, and distribution subsectors. Each of these subsectors emits significant methane emissions and likely features significant heterogeneity in costs. So, some version of trading program across these stages and across companies in a given stage, would make a lot of sense (if appropriate monitoring, reporting, and verification mechanisms were in place).
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