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Energy companies still digesting Biden’s proposed methane rule

Oil and gas companies from across the energy spectrum spent the weekend wondering what the proposed methane rules covering methane emissions issued by the Environmental Protection Agency will mean to their operations.

President Biden, at the international COP27 UN climate summit in Sharm El-Sheikh, Egypt, announced the new rules that would focus not only on new wells but all drilling sites, including smaller wells that must find and plug leaks. The proposals also require operators to respond to credible third-party reports of high-volume methane leaks. And they create a “Super-Emitter Response Program” to quickly identify and report large ‘super-emitter’ leaks that oil and gas companies would be required to investigate and repair.

“Our members continue to review the EPA proposal that was announced at the end of last week in Egypt and are prepared for more regulations from the federal government in the near future,” Ben Shepperd, president of the Permian Basin Petroleum Association, told the Reporter-Telegram by email.

Shepperd added, “Our members will sit at the table to accomplish these goals as partners in producing the affordable, abundant and reliable energy that our nation demands, as well as the energy that can help reduce emissions overseas for our allies. Energy security is national security and production in the United States is better for the environment, for our allies, and for Americans, and there is no place better to produce it than the Permian Basin in Texas and New Mexico.”

He concluded with an observation: “While we all share the goal of reducing emissions and preventing waste in the oil and gas industry, we are concerned that the administration continues to wonder on one hand why oil and gas operators are having challenges in producing domestic energy yet proposing more complex new regulatory proposals that create challenges for operators on the other hand.”

Grant Swartzwelder, president of OTA Environmental Solutions, cautioned that last week’s announcement could be the first of several the industry can expect.

“Unfortunately, this is the just the first of several executive branch moves regarding environmental regulation and the oil industry,” Swartzwelder told the Reporter-Telegram by email. What are known as Quad-Ob and Quad-Oc regulations and rules from the Securities and Exchange Commission will be issued in the near future, he wrote.

“Enforcement will also become a more visible thing. For example, New Mexico just created an Environmental Crimes Task Force,” he wrote. “Yes, they used the word ‘Crimes’ in there. Whether that is for emphasis, intimidation or getting people’s attention, I think it works. SEC rules will have some similar “crime” type overtones. If I was a chief executive officer or chief financial officer, I would be getting nervous.”

TIPRO “is in the process of reviewing the full scope of the federal methane rules. We will continue to be focused on the impact these regulations could have on Texas producers and our nation’s energy security and will advocate accordingly on behalf of our members and industry,” Ed Longanecker, president of the Texas Independent Producers and Royalty Owners Association, told the Reporter-Telegram by email.

Longanecker noted that, led by Texas operators, the US oil and gas industry has demonstrated “an incredibly successful track record of embracing innovation not only to meet growing global energy demand, but to mitigate energy emissions.”

As global energy needs are expected to increase – natural gas consumption along is forecast to rise 31% by 2050, according to the US Energy Information Administration, Longanecker said – demand for Texas oil and gas will continue to grow in the decades to come.

“TIPRO supports a regulatory framework that encourages domestic producers to develop our resources here under appropriate environmental standards,” he wrote.

The EPA will accept public comments on the proposed methane rules through Feb. 13, 2013, and issue a final rule at some point next year.



Read More: Energy companies still digesting Biden’s proposed methane rule

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