As we quickly approach the 10-month mark of the still fairly-new Trump administration, it’s important to look back on how its actions on federal regulations have impacted the midstream industry thus far.
More specifically, I want to focus on two regulations that directly impact the industry. The GPA Midstream Association heavily advocated to have these regulations removed from the Environmental Protection Agency’s (EPA) agenda: EPA’s Renewables Enhancement and Growth Support proposed rule (REGS) and its proposed rule to add gas processing plants to its Toxics Release Inventory (TRI).
Following my assessment of the administration’s time thus far, one thing is exceedingly clear: They don’t like unnecessary and duplicative regulations. In the first months of the Trump administration, they issued an executive order to force federal agencies to cut two regulations for every one regulation they promulgated. Part of their rationale for doing this was the constant feedback that the American business community provided to the Trump campaign during the 2016 election—that unnecessary and duplicative regulations are strangling the American economy.
In response to this, the Trump administration made rolling back such regulations one of the main pillars of its agenda.
This past May, the White House Office of Management and Budget reported that the administration had approved only 15 regulatory actions, spanning from Inauguration Day until the end of May. This small number of approved regulatory actions has been, by far, the fewest in any comparable period since record-keeping began in 1994. Even more astonishing is that the Trump administration eclipsed its original executive order of cutting two regulations for every one they put forward. Instead, for every one regulation they put forward, they withdrew or deactivated 16 regulatory actions.
GPA Midstream submitted comments to the EPA in February, expressing opposition to the REGS proposed rule. The REGS proposed rule focused on the inclusion of natural gasoline as an acceptable blendstock for ethanol flex fuels (EFF). The ethanol industry uses natural gasoline as a denaturant that is blended in with the ethanol before it is transported.
GPA Midstream member companies produce natural gasoline as part of their fractionation process.
The REGS proposed rule required sulfur and benzene levels to be reduced unnecessarily and unjustifiably low if an operator wanted to sell “certified” denaturant to the ethanol industry. GPA Midstream opposed these new requirements because they imposed unnecessary costs on the midstream industry, and most importantly, potentially closed off a revenue stream for the.
The EPA’s REGS proposed rule was largely unattainable without a massive investment of capital and infrastructure. High-volume suppliers would have increased costs because they would either have to spend more to treat their entire production stream, or they would need to add equipment and storage to separate their natural gasoline sales stream for a smaller treatment unit.
GPA Midstream had successfully advocated that this proposed rule be pulled back or significantly reworded. In July, the White House released the Unified Agenda, which moved this proposed rule from the active list to the inactive list, meaning the rule has been stopped for the time being and hopefully for the duration of the Trump administration.
The second significant proposed rule that the EPA deactivated from its agenda was the proposal to add natural gas processing plants to the TRI. GPA Midstream had significant issues with this rule. First, EPA rushed this proposed rule out the door without consulting or working collaboratively with the midstream industry.
One of the major issues that GPA Midstream had advocated to EPA was that this proposed rule was duplicative and unnecessary because most of the data EPA wanted to collect was already publicly available through other federal and state programs.
GPA Midstream’s opposition to this rule was crucial in saving our member companies and the midstream industry from dealing with the negative effects and burdens the proposed rule could have caused.
There have been a few significant regulatory “wins” for the industry from the Trump administration’s effort to roll back regulations. Although the administration is still in the early stages of its attempt to reform the regulatory system, these wins are promising signs that the administration has only begun on its path toward regulatory reform—and of what is to come.
Matthew Hite is vice president of government affairs for the GPA Midstream Association.