When you were a child, it may have seemed like there were so many rules to follow. Well, because there were! Sometimes (most of the time) those rules just didn’t make sense to you or why your parents had those rules in place. Fast forward to adult life and there are still rules to follow! If you are familiar with the oil & gas industry then I am sure you are familiar with the many different regulations that come along with drilling, operating, producing, etc. No matter what niche of the industry you are a part of or familiar with, there are always going to be rules to follow. As with anything in life right?
The EPA recently just announced the proposal for new regulations to be put in place to cut methane emissions. The Obama administration proposed these regulations to cut methane and carbon dioxide in order to combat climate change, increase renewable energy, reduce waste, and increase sold gas. Let’s take a look at the Obama Administration’s reasoning for these regulations and what the industry is saying about it.
The Obama Administration’s View
The goal is to reduce methane emissions by 40%-45% from the 2012 levels by 2025 and carbon dioxide emissions by 32% from 2005 levels by 2030. The proposals would require capturing the gas in wells that are intended only for oil which would otherwise flare the gas. Doing this could cost the industry as much as $420 million by 2025. According to Ms. Janet McCabe, the EPA’s acting assistant administrator for the Office of Air and Radiation, this would also save the industry up to $550 million which would leave them $150 million profit.
The Obama administration also plans to not only cut carbon dioxide emissions by 2030, but also increase renewable energy sources such as solar and wind to power the nations electricity by 28%. As methane is 25 times more powerful than carbon dioxide in trapping heat, methane is in the atmosphere much shorter than carbon dioxide. Just earlier this month, the EPA put forth regulations that cut carbon emissions from power plants by 32%. This most likely forced the closing of many coal plant and expanded renewable energy resources.
The Oil & Gas Industries Side of the Deal…
If you look at the cost above that the industry will pay, you can’t imagine that the industry is welcoming this proposal with open arms. In fact, the industry is already hurting with layoffs, well shut-ins, and gas and oil prices at an all-time low. So it should come to no surprise that the industry is opposing this proposal. Others are also deeming this proposal unnecessary:
- Lamar Smith, a Texas Republican, wrote that the proposals are the Obama administration’s “war on American energy jobs. The E.P.A.’s data show that methane emissions in the United States decreased by almost 15 percent between 1990 and 2013, yet E.P.A. is forging ahead.”
- Jack Gerard, the president of the American Petroleum Institute, said, “The last thing we need more duplication and costly regulation that could increase the cost of energy for Americans.” He stated that the industry already reduces methane emissions on its own, so these proposals are unnecessary.
- Howard Feldman, senior director of regulatory and scientific affairs at API, said, “This is obviously an additional burden on the industry…This is not the time to jeopardize the shale revolution going on in America.”
Croft Production Systems has already taken steps to realize the importance of reducing emissions and following current regulations in place. Check out our emission-free units!
http://epa.gov/climatechange/ghgemissions/gases/ch4.html
http://www.dallasnews.com/business/energy/20150818-epa-proposal-to-reduce-methane-emissions-targets-gas-oil-fracking.ece
