In a release sent to Rigzone recently, the Independent Petroleum Association of America (IPAA) revealed that it and 25 other state, regional, and national oil and natural gas associations wrote to congressional leadership “urging action on methane regulations that could have a detrimental impact on … [U.S.] energy supply”.
The release was accompanied by a letter from the organizations, dated February 9, which was sent to Speaker of the House Mike Johnson, House Minority Leader Hakeem Jeffries, Senate Majority Leader Chuck Schumer, and Senate Minority Leader Mitch McConnell. In that letter, the organizations noted that they “want to express serious concerns regarding the impact of the Environmental Protection Agency’s (EPA) new methane emissions regulations (Subparts OOOOb and OOOOc) and the Methane Emissions Reduction Program (Methane Tax) on oil and natural gas marginal well owners”.
“Both actions threaten marginal wells continued operations by creating unfair, unworkable, and uneconomic regulations. These small business energy producers need assistance to find a regulatory or legislative solution to mitigate these threats,” the groups added in the letter.
“Collectively, the Subpart OOOOc regulations and the Methane Tax pose serious and direct threats to hundreds of thousands of marginal wells. These threats have not been remotely addressed in the current regulatory actions completed or pending at EPA,” the groups stated in the letter.
“Congress needs to step up and step in to prevent irresponsible agency actions that would savage the nation’s marginal oil and natural gas wells,” they went on to note.
Commenting on the IPAA release and accompanying letter, a spokesperson at the EPA told Rigzone that oil and gas facilities are the nation’s largest industrial source of methane and noted that rapid, sharp cuts in methane can generate near-immediate climate benefits “and are a crucial addition to cutting carbon dioxide”.
“The final rule will rule will avoid an estimated 58 million tons of methane emissions from 2024 to 2038. That’s a nearly 80 percent reduction compared to what emissions would be without the rule,” the spokesperson said.
“The benefits of the final rule far outweigh the costs of compliance. EPA estimates that the rule will yield net climate and ozone health benefits of $97 billion to $98 billion dollars from 2024-2038 ($2019), the equivalent of $7.3 billion to $7.6 billion a year, after accounting for the costs of compliance and savings from recovered natural gas,” the spokesperson added.
“Since methane is the key component of natural gas, methane reductions mean industry will recover natural gas that otherwise would be wasted. The final rule saves enough gas from 2024 to 2038 to heat nearly eight million homes for the winter,” the spokesperson continued.
The spokesperson also told Rigzone that the EPA is actively finalizing the Subpart W and Waste Emissions Charge rules, “including the interpretation of exemptions, as directed by Congress”.
“We will consider the comments received, including the input provided in the referenced letter, as we finalize these rules. We are also finalizing a rule to update the Global Warming Potentials used in the Greenhouse Gas Reporting Program, including the GWP for methane,” the spokesperson said.
In the EPA statement, the spokesperson told Rigzone that Congress anticipated the importance of addressing emissions from marginal conventional wells through specifically allocated funding for such wells under the Inflation Reduction Act.
“In December 2023, DOE and EPA announced a conditional commitment to 14 states to receive a total of $350 million in formula grant funding to help well owners and operators voluntarily and permanently reduce methane emissions from marginal conventional wells,” the spokesperson stated.
A full list of the 26 organizations that penned the letter to House and Senate leaders can be seen below:
The complete letter can be seen here.
To contact the author, email andreas.exarheas@rigzone.com
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