Friday, May 15, 2015

Big Oil, Big Lies (an encore post)

[editor's note: This encore post was prepared three years ago, but it perhaps has new resonance topical given the oil industry's latest pr nonsense about smog]
The American Petroleum Institute's Campaign to Stop Life Saving Clean Air Protections

Big Oil, Big Lies

API is nothing if not consistent.  On February 10, 2012 Howard Feldman, API’s Director of Regulatory and Scientific Affairs, stated that forthcoming EPA clean air measures “could constitute a veritable tsunami of added requirements that could put some refineries out of business.”[1]  This is not the first time API has opposed cleaner air for America, and here, as with countless past health protections, API has employed the same model: issue outlandish, groundless statements predicting certain economic harm to industry while completely discounting the actual harms to human health and the environment that its obstructionism would perpetuate.   

History, however, shows the exact opposite to be true: EPA’s rules have proven beneficial for both our environment and our economy.  Indeed, EPA estimates that the 1990 Amendments will have prevented over 230,000 premature deaths and led to economic benefits of approximately $2.0 trillion by 2020.  API’s obstructionist strategies stand in stark contrast to these important public health and environmental benefits, and, if successful, these strategies represent an unmitigated disaster for American families.      

So, the time has come to ask API what it stands for under Jack Gerard.  Clearly, it does not stand for cleaner air for millions of Americans that results in economic dividends.  Nor, does it stand for cost-effective measures that could save precious domestic energy resources, as is the case with emissions standards for oil and gas production wells. 

Listed here is a mere sampling of the recent examples where API has opposed commonsense, science-based health and environmental protections.  By doing so, API has jeopardized the lives of tens of thousands of Americans.


API’s Tactics: API led the industry attacks which ultimately prompted the White House to pull the plug on EPA’s effort to update national air quality standards for ozone. During the summer of 2011, API fiercely attacked EPA’s efforts to establish a more protective ozone standard pursuant to Clean Air Scientific Advisory Committee CASAC advisement.  One of API’s often cited studies was the one noted below, predicting millions of job losses:

·        “Under EPA’s own analysis, tightening the ozone standards will cause up to 96 percent of all U.S. counties with air quality monitors to fail the standards. This would bring numerous consequences in economic development, business expansion and investment … a Manufacturers Alliance/MAPI study that found that EPA’s ozone proposal could result in 7.3 million U.S. jobs lost by 2020 and would add $1 trillion in new regulatory costs per year between 2020 and 2030.”[2]

API sharply questioned the sweeping human health benefits of the rule.  Commenting on a NERA Economic Consulting study that it commissioned shortly before the new ozone standard was due to be released, API said “The ozone benefits are illusory, greatly inflated and would be dwarfed by the costs. The standards may not be achievable and, worse, could destroy millions of American jobs. They are certainly not a recipe for economic recovery…It’s hard to imagine something that would harm our economy more than these standards. And yet there’s nothing forcing the administration to issue them. They’re entirely discretionary. This is the President’s decision.”[3] 

On the eve of the expected release of the strengthened ozone standard, Howard Feldman held a press briefing during which he made a final plea that the Administration step back from issuing a rule. [4]  Some of the hyperbole included:

·        “This review is strictly discretionary, not required by statute or the court. And the harm it could cause to the economy and to jobs is potentially enormous.”

·        “Closed for business” signs wouldn’t appear on factory and office doors overnight. But fewer and fewer new businesses would open, and fewer existing businesses would expand. Businesses would find it more difficult to obtain air permits and would face steep new costs for modifying their operations…Some might even leave the country. The result would be a slow motion process of job losses and dislocation in communities across America.”

·        “With 25 million Americans unemployed or underemployed today, it is hard to understand why the administration is considering a standard so potentially harmful to the nation’s future prospects”

·        “As I already stated, no court or statute is compelling EPA action. EPA has the option to simply move forward with the normal 5 year review cycle that has already started and evaluate the latest science.” 

The facts:  EPA’s science advisors have repeatedly and unanimously called for protective ozone standards, as have the nation’s leading medical and health organizations, including the American Lung Association, American Thoracic Society, American Academy of Pediatrics, American Public Health Association, American Heart Association, and American Medical Association.  Ground-level ozone is the main component of smog and is the most widespread air pollutant. Ozone is linked to premature deaths, increased asthma attacks and breathing problems, as well as increased emergency room and hospital admissions. This pollutant poses an especially serious risk to children, seniors, and people with lung diseases like asthma and bronchitis.  Strengthening the standards to 60 ppb would have saved up to 12,000 lives every year, prevented 58,000 asthma attacks and avoided 21,000 hospital and emergency room visits, according to the EPA estimates.[5] 

Tier 3

API’s Tactics: Citing a Baker & O’Brien report it paid for, API has claimed compliance costs would range from $10-$17 billion, four to seven refineries would likely shut down rather than make investments, gasoline at the pump would increase 12-25 cents per gallon, and net CO2 emissions could increase of 2.9-7.4 million tonnes per year.  Presidential candidates have inserted API’s over-the-top, false claims into the national debate on gasoline prices.  Over the past 8-10 months API has vigorously opposed the cost-effective, rational Tier 3 standards:

·        “The new EPA requirements could be devastating to consumers and communities across the nation” – Bob Greco, API Director of Downstream Operations, API press release, July 29, 2011.[6]

·        “While the costs of a Tier 3 proposal are understood, no benefit has been demonstrated” – API and National Petrochemical and Refiners Association letter to Lisa Jackson, Dec. 22, 2011.

·        “We hope OMB will take an objective look at the jobs impacts of the proposal and consider whether the limited environmental benefits are worth the costs to workers and their families. This rule is not needed at this time and should be pulled back.” – Howard Feldman press briefing, February 10, 2012.

·        An updated analysis by Baker & O’Brien released March 22, 2012 downgraded the cost increase of producing gasoline to 6 to 9 cents per gallon.  But, API is still claiming that a 25 cent per gallon increase is not out of the question.   Bob Greco challenged the health benefits, stating that “EPA has yet to demonstrate any air quality benefits from reducing sulfur in the amount proposed.”[7]


The facts: The rule will lead to critical improvements in air quality, help state and local areas meet air quality standards, and harmonize national vehicle emissions reduction programs.  A protective Tier 3 program has the potential to cut gasoline vehicle emissions of nitrogen oxides by nearly sixty percent, carbon monoxide by about 38 percent, and volatile organic compounds by close to a third when these protections are carried out. The substantial emissions reductions from all vehicles will translate into more than 400 avoided premature deaths and 52,000 avoided lost workdays each year.  Reducing sulfur in gasoline will also result in an immediate reduction in emissions from the existing fleet – on the order of approximately 260,000 tons of nitrogen oxides in 2017 when the program begins – equivalent to taking 33 million cars off our nation’s roads. [8]


Further, the rule would have little impact on gasoline process.  EPA projects that gasoline prices will increase by less than 1 cent due to the Tier 3 rule.[9]  A recent Mathpro study supports this estimate.[10] 

And just last week, another industry expert testified to Congress that API’s own new study showed the average cost would only be 2.1 cents a gallon – not 6 to 9 cents.


The Baker & O’Brien study on which API relies was released before EPA announced its intentions with respect to the requirements of standard.   EPA has signaled that it will only be exploring changes to the sulfur content of fuels and not other changes that API’s study included in its assumptions.[11]  Since then, API commissioned a revised Baker & O’Brien study that reduced its projected costs of the rule, but API continues to question Tier 3 benefits and says 25 cents per gallon could still happen.  As reported in the Wall Street Journal, questions remain about whether the Administration will proposed Tier 3 standards this year due to concerns over rising gas prices.[12]

Greenhouse Gas Reporting Rule

API’s Tactics:  API led Big Oil’s efforts to oppose the rule while under regulatory review at the White House Office of Management and Budget.  On Aug. 25, 2010, API, along with ExxonMobil, Shell, BP, Chevron, ConocoPhillips, and Marathon Oil -- the largest oil companies in the world -- met with the Office of Management and Budget (OMB) and the Office of Information and Regulatory Affairs (OIRA).  API had these words in its presentation: “API’s analysis indicates that EPA significantly underestimated the work required and burden imposed by the proposed rule…Based on the rule proposed by EPA, it is questionable whether the work required by this rule as written can be accomplished with available manpower and equipment within the proposed time parameters.”[13] 

Immediately after the rule was proposed, API continued to attack: “As proposed, this rule would have defined ‘facility’ in an unworkable manner and imposed unreasonable reporting obligations on tens of thousands of oil and gas operations.”[14]

 API challenged the final rule in court on Jan. 31, 2011. 


The Facts:  This comprehensive, nationwide emissions data will provide a better understanding of the sources of GHGs and will guide development of the policies and programs to reduce emissions.  EPA estimates that the rule will cover 85 percent of the total GHG emissions from the U.S. petroleum and natural gas industry with approximately 2,800 facilities reporting.  The data submitted under the GHG Reporting Program will provide important information on the location and magnitude of GHG emissions from petroleum and natural gas systems and will allow petroleum and natural gas facilities to track their own emissions, compare them to similar facilities, and aid in identifying cost effective opportunities to reduce emissions in the future.  EPA estimates the total cost for the private oil and gas sector will be approximately $62 million for the first year and $19 million in subsequent years, including the costs for non-reporters to make a reporting determination. This translates to an average cost of about $16,000 per facility for the first year and $7,000 in subsequent years.[15]


In January 2011, EPA released the first wave of 2010 reporting data via a new, user-friendly data publication tool that allows browsers to view and sort GHG data for calendar year 2010 from over 6,700 facilities in a variety of ways—including by facility, location, industrial sector, and the type of GHG emitted.  The new pollution information will strengthen corporate governance and sustainability by providing rigorous, facility-based pollution data that tracks pollution levels for comparison with other facilities. It will likewise provide investors with transparent information, helping to drive investment decisions informed by the companies and facilities that are leading the way in reducing climate pollution and those that are lagging behind.[16]


New Source Performance Standards (NSPS) and National Emission Standards for Hazardous Air Pollutants (NESHAP) for the Oil and Gas Sector

API’s Tactics: At an API briefing held in the run up to EPA’s public hearings on the rule, Howard Feldman criticized one of the fundamental underpinnings of the rule – the ability of industry to reduce waste, capture, and sell more of a valuable domestic resource.  API also pushed for delays:

·        “Much is at stake, including jobs and our ability to produce at home more of the energy we consume. Rules that restrict or discourage use of hydraulic fracturing would make it much harder to supply the oil and natural gas even the administration's own energy projections say we will continue to need.”

·        “Preparing comments on any one of these rules would be a challenge within 60 days. Preparing thorough and meaningful comments on all five within 60 days is not reasonable or practicable.”

·        “We support what the agency terms "green" or low-emission well completions provided the technology is safe, technically feasible and cost-effective. However, the final rules should phase in any green completion requirements by including a significant extension of time for their full implementation.”[17]


During his statement at EPA public hearings, Howard Feldman claimed that the common-sense rule would effectively stall domestic oil and natural gas operations, be more costly than EPA’s estimates, and again called for extensions of compliance times:

·        “In the worst case, the result could be requirements that impose a virtual moratorium on developing U.S. oil and natural gas resources. This would severely hurt job creation and revenue generation – and harm our nation’s energy future.”

·        “Insufficient reduced emission equipment is currently available and cannot be constructed before the expected second quarter 2012 compliance date.”

·        “Following a preliminary review of the regulatory impact analysis, it already seems clear that EPA has significantly underestimated the cost of implementing the proposed rules.”

·        “We also believe that a one-year extension of the final rule deadline for completing these rules is appropriate and justified.”[18]


In formal comments on the proposed rule, API suggests that the emissions from oil and natural gas wells constitutes “a teaspoonful of additional emissions” when compared to the emissions from gas processing plants.[19]


Following up on its claim that insufficient reduced emission completion equipment would be available for industry to comply with the rule (see bullet 2 above), API paid for a study that forecasts sharp declines in drilling, production, and tax revenues before the number of available REC rigs catch up with new market demand.  Again, the intent of API’s study is to advocate for an extension or phase in of compliance dates.  Some of the study’s highlights are noted here:

·        Overall drilling for natural gas using hydraulic fracturing would be reduced by up to 52%, reducing drilling by as much as 21,400 wells; 

·        Natural gas production from hydraulically fractured wells would decline by up to 11% compared to what would otherwise have been developed;

·        Oil production from hydraulically fractured wells would decline by up to 37% compared to what would have otherwise been developed;

·        The federal government would not collect up to $8.5 billion in royalties due to reduced drilling and production;

·        State governments would not collect up to $2.3 billion in severance taxes due to reduced drilling and production.

·        EPA should also allow more time to implement the requirements once they are final. The equipment prescribed to conduct reduced emission well completions will simply not be available in time to comply with the current final rule schedule.[20]


The facts: These standards are a trifecta: they protect human health and the environment, reduce waste of an important domestic energy source and save industry money through sales of recovered natural gas product. EPA’s proposal is based on proven technology and best practices that the oil and gas industry is using in some states today, including Colorado and Wyoming.  The proposal would cut smog-forming VOC emissions by nearly one-fourth (540,000 tons) across the oil and gas industry, including a nearly 95 percent reduction in VOCs emitted from new and modified hydraulically fractured gas wells.  In addition, the rule as proposed would reduce methane by 3.4 million tons, equal to 65 million metric tons of carbon dioxide equivalent, a reduction of about 26 percent, and air toxics by 38,000 tons, a reduction of nearly 30 percent.


The proposed rule is anticipated to quickly result in a net savings of nearly $30 million annually, while significantly reducing pollution from this expanding industry.  In fact, these proposed measures will save approximately 180 billion cubic feet of natural gas, comparable to the amount of gas needed to provide heat to 2.7 million American homes for a year.[21], [22]  


On April 2, EPA disclosed its final rules would be delayed by two weeks.  Trade publications have reported that the final rule has been weakened in response to oil and gas industry lobbying.


Other rules contested by API


GHG NSPS for Petroleum Refineries

Howard Feldman mentioned this rule during his February 10, 2012 tirade against EPA’s clean air protections.  “We urge the agency to go the advance notice of proposed rulemaking  (ANRPM) route, acquire more information, and pay closer attention to stakeholder concerns and potential impacts on refineries and the economy…It could result in a very costly and impractical set of requirements.”[23]


Boiler Maximum Achievable Control Technology (MACT)

In the February 10th briefing, Feldman mentioned that reissued “the boiler MACT rule is also a concern.”[24]  API has been noisy about the Boiler MACT from the beginning.  Back in December 2010 when EPA announced that it would delay final MACT rules, Feldman praised the decision, calling the proposal “unworkable and would have harmed American businesses and cost jobs.”[25]



[1] Howard Feldman, “Press briefing teleconference on EPA air rules for refineries,”  Feb. 10, 2012, available at
[2] API press release, “EPA ozone and greenhouse gas regulations are top threats to job growth,” Jun. 1, 2011, available at
[3] API press release, “New API study critiques EPA's calculation of ozone standard benefits,” Jul. 28, 2011, available at
[4] Howard Feldman, Press briefing teleconference on ozone standard, Aug. 23, 2011, available at  Also at API press release ‘API: EPA administrator can stop costly, discretionary ozone standards’ and “API: White house should add new ozone, greenhouse gas, and “Tier 3” fuel regulations to list of unnecessary, costly regulations”
[5] Press release, “Groups Sue Obama Administration for Scrapping Stronger Ozone Standards,” Oct. 11, 2011, available at
[6] API press release, “Study: EPA gasoline regulations could raise costs by 25 cents per gallon,” Jul. 29, 2011, available at
[7] API press release, “EPA Tier III rulemaking promises higher gasoline manufacturing costs,” Mar. 22, 2012, available at
[8] Environmental NGO letter to EPA Administrator Lisa Jackson, Jan. 11, 2012, available at
[9] Gina McCarthy letter to Representative Ed Whitfield, Feb. 27, 2012, available at
[10] Mathpro, Refining Economics of A National Low Sulfur, Low RVP Gasoline Standard, Oct. 25, 2011, available at
[11] PolitiFact, “New Gingrich says EPA plans to boost gas prices 25 cents per gallon,” Feb. 5, 2012, available at
[12] Tennille Tracy, The Wall Street Journal, “With Gas Prices Rising, Smog Rules May Stall,” Mar. 18, 2012.
[13] API Presentation to Whitehouse Office of Management and Budget and Office of Information and Regulatory Affairs, “EPA EGHG Mandatory Reporting Rule Subpart W,” Aug. 25, 2010, available at
[14] API press release, “API reviewing EPA’s GHG reporting rule requirements for petroleum and natural gas industries,” Nov. 9, 2010, available at
[15] U.S. EPA Factsheet, “Factsheet for Subpart W Petroleum and Natural Gas Systems,” Nov. 2010, available at
[16] EDF press release, “EDF Applauds Today’s Disclosure of Major Sources of Climate Pollution,” Jan. 11, 2012.
[18] Howard Feldman testimony on Oil and Gas NSPS/NESHAP, Sep. 27, 2011, available at
[19] API comments on Oil and Natural Gas Sector: New Source Performance Standards and National Emission Standards for Hazardous Air Pollutants Reviews, Nov. 30, 2011. 
[21] U.S. EPA Factsheet, “Proposed Amendments to Air Regulations for the Oil and Natural Gas Industry,” Jul. 28, 2011, available at
[22] Peter Zalzal blog post, “National Clean Air Standards for the Oil and Gas Industry Provide a Trifecta,” Mar. 20, 2012, available at
[23] Howard Feldman, “Press briefing teleconference on EPA air rules for refineries,”  Feb. 10, 2012, available at
[24] Id.
[25] API press release, “API praises EPA Boiler MACT decision, calls for EPA to reconsider other unworkable proposals,” Dec. 7, 2010, available at

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