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Biden Administration Says Slashing U.S. Oil, Natural Gas Methane Emissions to Cost ‘Pennies’ Per Mcf
The United States is set to impose sweeping limits on methane emissions from oil and gas operations as the Biden administration ups its commitment to tackle global warming.
Once enacted, the rule’s impact on natural gas and oil prices from 2023-2035 would cost “pennies per bbl of oil or Mcf of gas,” the Environmental Protection Agency (EPA) said Tuesday.
The sweeping proposal would cut methane from existing sources nationwide through a proposed Clean Air Act rule.
The news comes as President Biden met with other world leaders to discuss climate change at the United Nations’ (UN) 26th Conference of the Parties, aka COP26, in Glasgow, Scotland.
“As global leaders convene at this pivotal moment in Glasgow for COP26, it is now abundantly clear that America is back and leading by example in confronting the climate crisis with bold ambition,” said EPA Administrator Michael S. Regan. “With this historic action, EPA is addressing existing sources from the oil and natural gas industry nationwide, in addition to updating rules for new sources, to ensure robust and lasting cuts in pollution across the country.
“By building on existing technologies and encouraging innovative new solutions, we are committed to a durable final rule that is anchored in science and the law, that protects communities living near oil and natural gas facilities, and that advances our nation’s climate goals under the Paris Agreement.”
At the UN General Assembly in September, several countries had pledged to cut global methane emissions. The global methane pledge now has been agreed to by close to 100 other countries, President Biden said at COP26.
The worldwide action “could collectively reduce our methane by 30% by 2030, and I think we can probably go beyond that,” he said in announcing the EPA proposal.
“This is going to make a huge difference, and not just when it comes to fighting climate change… It’s going to improve health, reduce asthma, respiratory-related emergencies. It’s going to improve the food supply as well by cutting crop losses and related ground-level pollution.
“And it’s going to boost our economies, saving companies money, reducing methane leaks, capturing methane to turn it into new revenue streams, as well as creating good-paying union jobs for our workers.”
Jobs could be created “to manufacture new technologies for methane detection,” the president said. There would be “jobs for union pipefitters and welders to go out and cap abandoned oil wells and plug leaking pipelines…There’s thousands of miles of those.”
What Is Included In The EPA Rulemaking?
The proposed rulemaking, if enacted, could reduce 41 million tons of methane emissions from 2023-2035. It would include updated methane and volatile organic compounds emission reduction requirements for new, modified and reconstructed oil and gas sources. The proposal would also include requirements that states develop plans to limit methane emissions from existing sources nationwide.
Other key elements include a monitoring program for new and existing well sites and compressor stations; a zero-emissions standard for new and existing pneumatic controllers; and standards to eliminate venting of associated gas, requiring instead the capture and sale of gas where a sales line is available.
The proposal “builds on the work of leading companies that are using the latest cost-effective technology to reduce methane emissions in the field,” EPA said.
The proposal, said EPA, included “extensive public outreach to hear from the public and diverse perspectives including states, Tribal nations, communities affected by oil and gas pollution, environmental and public health organizations, and representatives of the oil and natural gas industry, all of which provided ideas and information that helped shape and inform the proposal.”
In September, President Biden said the United States and the European Union were targeting a 30% reduction in global methane emissions versus 2005 levels by 2030. This followed the president’s announcement in April that the United States would target a 50-52% reduction in economy-wide greenhouse gas emissions by 2030.
NatGas, Oil Industry In Support
The nation’s largest oil and gas trade group, the American Petroleum Industry (API), said Tuesday it was in support of the proposal. Other industry trade groups also expressed tentative support.
“We support the direct regulation of methane from new and existing sources and are committed to building on the progress we have achieved in reducing methane emissions,” said the API’s Frank Macchiarola, senior vice president for Policy, Economics and Regulatory Affairs. “EPA has released a sweeping proposal, and we look forward to reviewing it in its entirety. We will continue working with the agency to help shape a final rule that is effective, feasible and designed to encourage further innovation.”
Earlier this year the API said it was asking energy companies to track emissions and voluntarily disclose to the public details, including levels of flared natural gas. The industry trade group in March also said it supported a carbon-price policy, shifting from its earlier resistance to regulatory action on climate change.
The Independent Petroleum Association of America (IPAA) said it also supported the proposal and would study its details. “IPAA is encouraged by its initial analysis of EPA’s proposed regulations – the agency has tried to be responsive to our concerns for improved cost-effective monitoring technology and recognizing the importance of addressing small business challenges,” CEO Barry Russell said.
“IPAA will be reviewing the 284-page rule and the regulatory analysis and awaits the findings of the Department of Energy’s study on marginal well emissions that will be completed ahead of the EPA’s comment deadline.”
The Interstate Natural Gas Association of America (INGAA) expressed a similar stance. “The INGAA supports federal new and existing source methane emissions regulations that are safe, effective, and protect energy reliability,” a spokesperson told NGI. “To be successful, methane regulations should allow our engineers and technicians appropriate flexibility to further reduce emissions from natural gas operations, using a range of available technologies and tools, while avoiding activities that may impair energy reliability.
“We are reviewing the details of the EPA’s proposals against these principles and plan to engage with the agency on any of the proposed requirements that will impact the natural gas transmission industry’s ability to efficiently deliver reliable energy while minimizing emissions.”
The Texas Independent Producers and Royalty Association will “continue to engage with the EPA on this important issue as we more thoroughly review the proposed methane rulemaking,” said President Ed Longanecker. “These regulations could disproportionately impact smaller U.S. oil and natural gas producers, who do not have the same financial wherewithal, resources or often the internal regulatory expertise as larger producers.”
MiQ, which works with producers to certify their natural gas supplies, celebrated the proposal and the broader support for global methane emissions reductions at COP26.
“While global governments limber up for action over the next decade, we’re working with producers across the world to drive down methane emissions today – differentiating producers based on their methane emissions performance, and incentivising businesses to improve, simply because it makes good climate – and business – sense,” said MiQ senior adviser Georges Tijbosch.
The Environmental Defense Fund (EDF), which has worked extensively with Lower 48 exploration and production companies to reduce emissions at the wellhead, also offered its support.
President Fred Kupp said “cutting methane pollution is the fastest way there is to slow the warming as we continue the transition to cleaner, safer, healthier energy systems. The challenge for the U.S. and other countries now will be to go home and make good on these ambitious goals as fast as they possibly can.”
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