More Biden restrictions on oil and gas bench
Despite pleading with oil and gas companies to increase production in recent months to deal with global shortages and rising prices, President Biden is again hitting the industry hard with proposed cuts in production, more emissions from operations. He is not alone, as the UK and EU seek to reduce gas flaring and venting practices to reduce methane emissions in line with climate pledges.
The Biden administration has proposed a rule to further reduce methane leaks and gas flaring on public lands that, if passed, could have a significant impact on the industry. It would build on an expansion of the EPA’s 2021 rule, which requires drillers to find and fix 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 commitments. This means that Tighter monthly time and volume limits on gas flaring in oil and gas operations. Scientists To believe A significant reduction in global methane emissions would have a significant impact on climate change and help mitigate the effects of global warming in line with the goals of the Paris Agreement.
The proposal states that in addition to reducing flaring levels, energy companies must implement strategies to reduce emissions by demonstrating that they have the pipeline capacity to produce the expected gas. This can lead to rejection of new projects if gas flaring levels are deemed to exceed the prescribed maximum. Interior Minister Deb Haaland explain, “This proposed rule would bring our regulations into line with the technological advances made by the industry in the decades since the BLM regulations were implemented, while providing fair returns to taxpayers. »
If passed, the proposal would generate $39.8 million in annual revenue for the United States and prevent billions of cubic feet of gas from being released into the atmosphere. BLM Director Tracy Stone Manning said, “This project is a logical and environmentally sound solution as we deal with the damage caused by natural gas consumption. He added: “This puts the American taxpayer first and ensures producers receive 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 carbon and methane emissions by taxing oil and gas producers who exceed emission limits.
The United States has committed to reducing methane emissions by 30% compared to 2020 by 2030. White House National Climate Advisor Ali Zaidi at the COP27 climate summit in November advertiser That the US government will begin to “focus relentlessly on reducing emissions wherever we find them.” With oil and gas production releasing the highest levels of methane emissions, it’s no surprise that Biden is targeting new policies to reduce emissions from fossil fuel companies. EPA Administrator Michael Reagan said at COP27, “Our regulatory approach is very aggressive in terms of both timing and stringency. He noted that the old and new regulations will reduce energy waste by about 80% and reduce carbon emissions by 36 million tons.
This step comes next years of criticism About the US methane problem. Studies have repeatedly shown that oil and gas companies in the United States do not report methane leaks in their operations. 2022 ReportAccording to him, methane emissions from the activities of large oil and gas companies in the Permian Basin “may be much higher than official data”. He suggested: “It appears that a very large fraction of methane emissions are caused by a small number of ultra-emissive leaks. » Earlier this year, methane leaked from 21 oil wells in California 50,000 ppm methane or more, resulting in a bulk delivery transaction.
And the problem is not limited to the United States, as the European Union and the United Kingdom have responded to years of neglect of abandoned oil wells. Earlier this year, the European Commission proposed regulations Significantly reduce 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, the UK Oil and Gas Authority (OGA) ordered support End of routine burning and ventilation 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 reduce greenhouse gas emissions, particularly carbon and methane emissions, governments around the world have begun implementing 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 tail gas proposal if adopted. Other powers, such as the UK and the European Union, are expected to follow America’s lead by imposing their own restrictions on flaring and venting.
By Felicity Bradstock for Oilprice.com
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