More Biden Oil and Gas Restrictions on the Horizon


While pleading with oil and gas companies in recent months to increase production to combat global shortages and rising prices, President Biden is hitting back at the industry by proposing more emissions reductions from operations. He is not alone as the UK and EU seek to reduce gas flaring and venting practices to curb methane emissions in line with climate pledges.

The Biden Administration has proposed a rule to further limit methane leaks and gas flaring on public lands, which could have a significant impact on the industry if passed. It will build on an expansion of the Environmental Protection Agency’s (EPA) 2021 rule that requires drillers to detect and plug leaks at well sites across the country. The Interior Department is recommending the new rule to support Biden’s goal of reducing emissions and meeting the United States’ climate pledges. That would mean tighter monthly time and volume limits on gas flaring in oil and gas operations. Scientists to believe significantly reducing worldwide methane emissions would have a major impact on climate change and help reduce the effects of global warming in line with the Paris Agreement targets, he said.

In addition to reducing flaring levels, the proposal involves creating waste minimization strategies that show energy firms have the necessary pipeline capacity for expected gas production. This can lead to rejection of new projects if gas flaring levels are deemed to exceed the intended maximum. Interior Secretary Deb Haaland explained “This proposed rule would not only provide a fair return to taxpayers, but also accommodate the technological advances the industry has made over the decades since the BLM’s (Bureau of Land Management) regulations were first implemented.”

If passed, the proposal is expected to bring in $39.8 million in annual royalties to the United States, as well as prevent billions of cubic feet of gas from being released into the atmosphere. “This draft bill is a common-sense, environmentally responsible solution as we address the harm caused by the waste of natural gas,” said BLM Director Tracy Stone-Manning. He added: ‚ÄúThis puts the American taxpayer first and ensures producers are paid appropriate royalties.

In recent months, a number of steps have been taken to reduce emissions of various greenhouse gases that are expected to change the landscape of the oil and gas industry. In addition to the new EPA and BLM regulations, Biden’s Inflation Reduction Act (IRA) is expected to help reduce both carbon and methane emissions by taxing oil and gas producers who exceed emission limits.

The United States has pledged to reduce methane emissions by 30 percent by 2030 compared to 2020 levels. White House National Climate Advisor Ali Zaidi at the COP27 climate summit in November reported He said the US government would begin a “relentless focus on rooting out emissions wherever we can find them”. With oil and gas production releasing the highest levels of methane emissions, it’s no surprise that Biden is targeting new emissions reduction policies at fossil fuel companies. EPA Administrator Michael Regan said at COP27: “Our regulatory approach is very aggressive in terms of timing and in terms of stringency.” He suggested the old and new rules would cut energy waste by about 80 percent and reduce carbon emissions by 36 million tons.

This action comes after that years of criticism around the US methane problem. Studies have repeatedly shown that oil and gas firms in the United States underreport methane leakage from their operations. 2022 reportHe stated that methane emissions from the operations of a large oil and gas company in the Permian Basin are “significantly higher than official data.” He said, “A very significant fraction of methane emissions appear to be caused by a small number of super-emission leaks.” Earlier this year, 21 oil wells in California were found to be leaking methane. 50,000 parts per million of methane or rather, it led to a major clogging operation.

And this issue is not limited to the US, the EU and the UK are responding to years of neglect of abandoned oil wells. Earlier this year, the European Commission proposed regulations massively reduces methane emissions, putting pressure on oil and gas companies in the region to do more. The proposal includes reporting obligations for EU importers and restrictions on gas flaring. Similarly, UK’s Oil and Gas Authority (OGA) has placed an order stop burning regular torches and air removal by 2030. This would give the OGA the power to shut down production if flaring and venting levels are deemed too high.

In response to increasing pressure to curb greenhouse gas emissions, particularly carbon and methane emissions, governments around the world have begun to impose stricter policies on oil and gas operations. A supportive policy framework developed in recent months in the United States is expected to help effectively implement the BLM proposal on gas emissions if adopted. Other powers such as the UK and the EU are expected to follow in America’s footsteps by imposing their own restrictions on flaring and venting.

By Felicity Bradstock for Oilprice.com

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