General News

Wolf Administration Advances Proposed Emission Limits On Most Oil And Gas Sites. According to State Impact, “The Wolf Administration wants to limit emissions from thousands of oil and natural gas sites in Pennsylvania. It’s proposing a new regulation that would require better monitoring and control of emissions at existing oil and gas wells, including those that use hydraulic fracturing, and related sites. Companies would have to install equipment to stop emissions from escaping, and inspect sites for leaks every three months. The rule targets volatile organic compounds (VOCs), which contribute to ozone and can affect people’s health. The Department of Environmental Protection says the tighter controls will also prevent leaks of the potent greenhouse gas methane. DEP said the rule would reduce annual air pollution by 4,404 tons of VOCs and 75,603 tons of methane. A recent Environmental Defense Fund study found Pennsylvania’s shale gas industry leaked more than 1 million tons of methane in 2017 — seven times more than state reporting showed. People can offer written comments on the plan through July. They can also participate in their choice of three virtual hearings in June. In 2018, the Wolf Administration enacted a similar regulation for new sources of emissions, as part of the governor’s plan to reduce methane leaks and fight climate change. The administration has faced criticism from environmental groups for moving too slowly on the new rule. Methane is the main component of natural gas. Compared to carbon dioxide, it has about 30 times the warming power, according to the Environmental Protection Agency.” [State Impact, 6/1/20 (=)]

Oil And Gas Methane Study Could Provide Data For New Mexico's Regulatory Efforts. According to the Carlsbad Current-Argus, “As New Mexico worked to develop tougher regulations to reduce methane emissions – both as a source of pollution and wasted commodity – major oil and gas companies in the Permian Basin partnered with environmentalists and the University of Texas at Austin to develop a study that could result in stronger monitoring. The collaboration was intended to find more ways and frequency to monitor for methane emissions, hoping to curb one of the industry’s biggest sources of pollution. Researchers at the University joined the Environmental Defense Fund, ExxonMobil, Pioneer Resources and the Gas Technology Institute to work on a network of sensors across the Permian to provide continuous monitoring and data in hopes of tracking and stopping methane’s release into the atmosphere. Dubbed Project Astra, participants hoped the constant monitoring could help operators and regulators quickly identify large sources of methane release and mitigate the impacts, allowing for a greater reach than current technology that only measures annually or semi-annually, read a report from the University. Methane, known as a potent greenhouse gas, is often released by oil and gas facilities either by flaring – the burning off the gas – or venting via leaks or other sources of release. Many industry leaders pointed to pipeline constraints in the basin forcing operators to vent or flare the gas, and environmentalists worried the practices could lead to increased air pollution.” [Carlsbad Current-Argus, 5/29/20 (=)]

Colo. Lawsuits Could Set Precedent On Methane Rules. According to E&E News, “A group of local governments are suing Colorado over its methane regulations, saying the rules could harm their economies and that state officials overstepped their boundaries. The dispute, which is being heard in state district court in Denver, could have ramifications for other states. New Mexico and Pennsylvania are both working on their own methane regulations. Like Colorado, both states have Democratic governors and face the same rural-versus-urban dynamic as Colorado on drilling issues, along with pushback from Republican officials who represent oil- and gas-producing parts of the states. New Mexico also is writing its first ever rules on methane emissions, and Pennsylvania is writing regulations for existing oil and gas wells after passing rules on newly drilled wells a few years ago. The Colorado case stems from Democratic Gov. Jared Polis’ signing of S.B. 181 in 2019, a few months after taking office. The law requires tougher regulations on methane emissions from oil and gas wells, gives local governments more control over energy development, and requires reforms to the Colorado Oil and Gas Conservation Commission. Weld County, outside Denver, and a coalition of rural communities say in the two lawsuits that the new methane regulations will have a disproportionate impact on their economies and tax revenue. State law ‘actually requires that they get that say, and not just that they get a say, but that they get their say prioritized,’ Ben Strawn, an attorney for Garfield County in the western part of the state, said in an interview.” [E&E News, 6/1/20 (=)]

Oil, Gas Drilling Hits Lowest Level Since 1949 — Report. According to E&E News, “Drilling by oil and gas companies has reached record low levels because of the demand crash and price slump generated by restrictions to slow the spread of the coronavirus. Only 301 rigs were drilling for oil and gas last week — the lowest combined count in Baker Hughes records going back to 1949. Before this year, the lowest combined count was 404, in mid-2016. The combined count was down 17 from the previous week. The number of oil rigs is at its lowest since 2009, according to the Baker Hughes rig count issued Friday. The number of gas rigs — 77 — is the lowest in data going back to 1987. There had been some expectation in the analyst community that cratering oil production could help stabilize dry natural gas prices. Oil production commonly generates ‘associated gas’ as a byproduct. So less oil production also reduces gas supply. So far, that hasn’t happened. Natural gas prices have risen since mid-May, but as of Friday, they hadn’t surpassed $2 per million British thermal units. ‘The collapse in gas exploration shows a predicted increase in gas prices caused by decreased oil prices has failed to materialize,’ said Rystad Energy’s head of oil markets, Bjørnar Tonhaugen. Oil prices are stabilizing, Tonhaugen said, pushed upward by signs of increased demand but held down by concerns about China’s move to tighten its grip on Hong Kong and concerns that a second wave of COVID-19 might be looming in some countries, including the United States.” [E&E News, 6/1/20 (=)]

Democrats Hold Forum On Orphan Well Cleanup Strategy. According to E&E News, “Democrats from a House Natural Resources subcommittee will hold a virtual roundtable today on employing American workers to reclaim abandoned oil and gas infrastructure, a pressing remediation challenge for many states, potentially made worse by the pandemic-driven depression of oil prices. The forum, ‘Reclaiming Orphaned Oil and Gas Wells — Creating Jobs and Protecting the Environment by Cleaning Up and Plugging Wells,’ will highlight the environmental and economic benefits of creating a national well-plugging strategy, the committee said in a release. States like California, Ohio and Louisiana have long noted the challenges of identifying and plugging historic oil and gas wells, a costly and time-consuming effort that some states lack funding for. With oil prices hitting historic lows during the national economic slowdown caused by the novel coronavirus and the global glut of crude oil, some states are expecting additional abandonment (Energywire, May 5). How to address the oil crisis within economic stimulus efforts has divided some members of the House Natural Resources Committee, with Republicans like Louisiana Rep. Garret Graves favoring more action to assist industry and Chairman Raúl Grijalva (D-Ariz.) promising to fight aid to fossil fuel companies. But issues like bonding on federal oil and gas wells is a long-standing disagreement.” [E&E News, 6/1/20 (=)]

'Code For Oil Expansion.' Greens Say CCS Plan Helps Drilling. According to E&E News, “Supporters of carbon capture and storage last week lauded a Treasury Department proposed guidance that they said would allow companies an alternative pathway to prove eligibility for a key CCS tax credit while ensuring integrity of carbon accounting. But fossil fuels opponents say the proposal lacks needed transparency and decry the focus on CCS for oil extraction in the U.S., which they say counteracts any environmental benefit from capturing carbon. The IRS proposal was more than two years in the making. It pertains to Section 45Q of the tax code, an important incentive for CCS that was extended and expanded in 2018 with bipartisan support as part of a budget bill. The guidance would settle questions about what qualifies as ‘secure geological storage’ for carbon dioxide injected underground for purposes of the tax credit. It sets requirements for long-term monitoring, reporting and verification for sequestered CO2; clarifies when repayment of the credit would be required if a company stops sequestering the carbon; and governs how the credit might be transferred between parties as part of a business arrangement. The highest-profile aspect of the draft guidance is a proposed option for monitoring, reporting and verification (MRV). The IRS previously required tax credit recipients to have an MRV plan approved by EPA for their sequestration projects under a subpart of its greenhouse gas reporting program. The draft guidance maintains that as an option.” [E&E News, 6/1/20 (=)]

Pandemic, EPA Rollbacks Seen Spurring Methane Spike. According to E&E News, “Tough times for the oil and gas industry, combined with a rollback of environmental regulations, could hinder U.S. efforts to reduce methane emissions and fight climate change, experts warn. Here’s why: The petroleum industry’s post-pandemic economic woes may discourage companies from investing in methane monitoring and control technologies — opening the door to more accidental methane leaks. That scenario is made potentially worse by the administration’s plans to weaken mandates for the powerful greenhouse gas. While methane doesn’t stay in the atmosphere as long as carbon dioxide, it’s much more potent in the short term. In the coming weeks, EPA is expected to send a regulatory proposal to the White House that would lessen requirements for oil and gas producers to monitor for leaks. It also would swap direct methane regulations for controls on emissions that contribute to smog. Environmentalists say the long-delayed package would dismantle the Obama EPA’s attempt to regulate the sector responsible for one-third of U.S. methane emissions. That’s especially true, they say, as it has been designed to make it harder for EPA to eventually regulate the existing oil and gas infrastructure responsible for the bulk of the leakage. The oil and gas industry has been divided in its support for the rollback, with oil majors and some independent producers favoring a nationwide methane rule they say would create a level playing field for producers.” [E&E News, 5/29/20 (=)]

FERC Sued Over LNG Project Approval. According to the Washington Examiner, “The Natural Resources Defense Council sued FERC in D.C. Circuit Court on Thursday over its approval of the $10 billion Jordan Cove LNG export facility in Oregon. NRDC said FERC failed to demonstrate an economic need for the project given the developers have not identified outside buyers for the LNG. FERC had rejected the project four years ago. Last week, it denied a ‘rehearing’ request to revisit its decision in March approving the project, the first terminal for LNG on the West Coast permitted by the commission. ‘Jordan Cove still hasn’t identified any outside buyers for this gas, and so that means landowners will lose their land and the environment faces great risks all for a project that will undoubtedly become a white elephant,’ said Gillian Giannetti, a lawyer for NRDC’s Sustainable FERC Project.” [Washington Examiner, 5/29/20 (=)]

Greenpeace Says Companies’ AI Helping Oil, Gas Undercuts CO2 Pledges. According to Inside EPA, “Greenpeace in a new report is slamming Microsoft, Google, and Amazon for using artificial intelligence (AI) to support oil and gas production, saying it significantly undermines the three companies’ commitments to reducing their carbon dioxide (CO2) emissions. According to the report, Shell, BP, Chevron, ExxonMobil and other oil and gas companies have turned to the three technology giants’ ‘high powered computing capabilities to find and extract more oil and gas and reduce production costs.’ Even though the companies are vowing to fight climate change, they ‘have connections to some of the world’s dirtiest oil companies for the explicit purpose of getting more oil and gas out of the ground and onto the market faster and cheaper.’ By using AI to support ‘every phase of the oil and gas production chain,’ the firms are ‘significantly undermining’ their vows to cut CO2, according to Greenpeace, because the oil and gas sector remains a significant source of greenhouse gas emissions. Shortly after the May 19 release of the report, Google announced that it would stop designing AI solutions to help fossil fuel producers extract oil and gas, but Microsoft and Amazon have not responded, says a Business Insider article published that day. The article quotes Elizabeth Jardim, senior corporate campaigner for Greenpeace USA, who praised Google’s announcement. ‘While Google still has a few legacy contracts with oil and gas firms, we welcome this indication from Google that it will no longer build custom solutions for upstream oil and gas extraction,’ she said.” [Inside EPA, 5/29/20 (=)]

Europe's Natural Gas Balancing Act. According to Axios, “In touting Europe’s just-released economic recovery plan whose core features clean energy, top government officials there are walking a fine line on the role of natural gas. Why it matters: Europe is at the leading edge of a global debate on the fate of natural gas, the cleanest fossil fuel that nonetheless still emits carbon dioxide, as the world tries to drastically cut carbon and other heat-trapping emissions. ‘There is no plan to phase out gas over the next 10 years. For the foreseeable future, gas will remain an important energy source for the European Union.’ — Ditte Juul-Jørgensen, director general for energy of the European Commission, at a (virtual) Atlantic Council event Thursday The big picture: Natural gas emits half the CO2 when burned compared to coal, but its primary component is methane, which can leak and is a far more potent greenhouse gas than carbon. Environmentalists around the world have increasingly opposed natural gas, even though it reduces emissions when displacing coal, because in the long term it doesn’t reduce emissions to the level scientists say is necessary. Catch up fast: The European Commission proposed earlier this week an $825 billion package of policies aimed at helping reinvigorate the continent’s economy as it recovers from the pandemic. Its core features much of the Green Deal announced last year, which includes funding and financing mechanisms for renewable energy, electric vehicle charging and other emissions-friendly projects, Axios’ Ben Geman wrote earlier this week.” [Axios, 5/29/20 (=)]

Chad Ellwood

Senior Research Associate

Climate Action Campaign

cellwood@cacampaign.com

202.448.2877 ext. 119