Oil & Gas News

EPA Mandates Methane Cuts Impacting Texas Production

Methane, Texas, EPA

The U.S. Environmental Protection Agency (EPA) announced a pivotal climate regulation on Saturday, mandating significant methane emission reductions from oil and gas operations, particularly in Texas. The rule, aligning with the Biden Administration’s objective to mitigate methane’s impact on climate change, was revealed at the COP 28 United Nations climate summit in Dubai.

Mineral RightsMethane, a potent greenhouse gas, has a shorter atmospheric lifespan than carbon dioxide but possesses a higher heat-trapping capability. Its reduction is seen as a critical and immediate step in slowing climate change, as global efforts to meet the Paris Climate Accords’ 1.5 degrees Celsius warming limit lag.

EPA Administrator Michael Regan, speaking at a Dubai press conference, labeled the new standards as both ambitious and sensible, marking them as a significant move in the climate change battle.

Recent years have seen a dramatic rise in global methane levels, with 2021 recording the largest single-year increase since 1984. The U.S. energy sector, particularly Texas – the leading oil and gas producer, has been a significant contributor to these emissions, lacking stringent regulations to control methane leakage.

The new rules, inspired by state-level regulations in New Mexico and Colorado, aim for uniformity across states, as highlighted by New Mexico Gov. Michelle Lujan Grisham at the Dubai press conference.

A key aspect of the regulation is addressing routine flaring in oil and gas operations, a process where excess gas is burned off, often leading to uncontrolled methane release. Despite state laws barring unpermitted flaring, exceptions are frequently granted, as evidenced by Texas Railroad Commission data.

The oil and gas industry has made efforts to reduce methane emissions, with major companies pledging net-zero emissions by 2050 and an end to routine flaring by 2030. These commitments were underscored by the attendance of ExxonMobil CEO Darren Woods at COP 28, marking a significant industry presence at the climate summit.

While some industry groups like the American Petroleum Institute have shown a reserved response to the EPA’s regulation, stating their alignment with emission reduction goals, others, including the Texas Alliance of Energy Producers, have criticized the rules as burdensome.

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The regulation includes provisions for equipment leak monitoring, allowing companies to choose from various technologies, and introduces a “super emitter” program targeting significant methane releases. States are tasked with enforcement and have been given a two-year window to develop implementation plans.

The Biden Administration estimates the rule will cut 58 million tons of methane emissions by 2038, equivalent to the CO2 emissions from the power sector in 2021. However, Texas regulatory agencies have questioned these projections and hinted at potential legal challenges, citing overreach and the need for congressional decision-making on major policy issues.

The EPA maintains that the regulation is not intended to be burdensome for state agencies. Environmental groups in Texas have welcomed the move, emphasizing the need for robust federal regulations to address the state’s considerable greenhouse gas emissions from its vast oil sector.

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