When Industry Supports Environmental Regulation

February 25th, 2020 by Dakota Software Staff

It is a common (and somewhat unfounded) stereotype that industry abhors regulation, and words like “burdensome” and “unreasonable” frequently come into play in discussions of labor and environmental law. In the last several months, however, this impression has been challenged by big industry players that have come out in support of various environmental regulations—and, in some cases, even arguing that certain laws need to be saved from the chopping block.

O&G Giants Come Out Against Elimination of Methane Regs

When the U.S. Environmental Protection Agency (EPA) proposed to roll back limitations for methane emissions in the oil and gas (O&G) industry last summer, environmental advocacy groups expressed disappointment and alarm, as might be expected. But then something less expected occurred: many in the O&G sector indicated that they did not want to see these rollbacks occur.

Companies such as ExxonMobil, Equinor, TOTAL, and Shell all lent support to the existing 2016 New Source Performance Standards (NSPS) and argued against any action that may result in an increase in methane emissions. As Shell stated in a comment letter to the EPA:

“The Agency should not rescind any of the methane-specific requirements applicable under Subpart OOOOa. Methane is a potent greenhouse gas (GHG) for which its direct regulation is appropriate and necessary to address the many challenges of global climate change while further supporting the benefits of the increased use of natural gas for reducing GHG emissions throughout the U.S. economy. Based on these considerations, Shell supports the direct regulation of methane as long as those regulatory control requirements are implemented in an efficient and effective manner that encourages innovation. We believe that such an approach is critically important for ensuring natural gas plays a vital role in transitioning to a low-carbon energy future and economy.”

As far as these organizations are concerned, the regulations are more than just a cost of doing business. They are a pathway towards ensuring that the O&G industry adapts and remains relevant within an economy that is trending toward sustainability.

HVACR Industry Is Cool with HFC Reduction

A similar story unfolded in the heating, ventilation, air-conditioning, and refrigeration (HVACR) industry with H.R. 5544, the American Innovation and Manufacturing Leadership Act of 2020 (AIM Act). H.R. 5544 would result in a significant reduction of hydrofluorocarbons (HFCs), one of the most common refrigerants in the world and also a powerful GHG.

According to testimony on the regulation, the majority of industry stakeholders applaud the reduction of HFCs, believing that more environmentally friendly refrigerants are equally viable and that H.R. 5544 will actually stimulate economic growth and innovation in their sector.

Why?

Naturally, industry support for regulation is almost never universal. But there are plenty of good reasons for organizations’ support of environmental regulations, including:

• Ensuring a return on investment for any compliance efforts already in progress;

• Creating a healthy environment that results in happier, more productive employees; and

• Preserving the reputation of the company brand.

Some may claim that larger organizations have more resources to tackle regulatory issues and therefore may be more supportive of new standards—but this assumption has its flaws. With the right solutions, organizations large and small need not be intimidated by environmental compliance. While compliance can be complex, it is necessary not only for the good of the planet but also for the sustainable growth of business.