National Niche
sectors in the U.S. if steps to reduce emissions are not taken before 2024, is projected to be about $1.2 billion annually, increasing to $2 billion annually if the maximum rate goes into effect in 2026.
States Set to Begin Plugging Over 10,000 Orphaned Wells
In August, the Department of the Interior announced that the Bipartisan Infrastructure Law has enabled the administration to award 24 states funding to plug, cap and remediate abandoned oil and gas well sites. Methane leaking from many of these orphaned wells is a serious safety hazard and believed to be a significant cause of climate change. Plugging orphaned wells will help advance the goals of the U.S. Methane Emissions Reduction Action Plan. ****************************************************** BOEM Reinstates Gulf of Mexico Lease Sale 257 On September 14, Congress instructed the Bureau of Ocean Energy Management (BOEM) to award the highest valid bids from Lease Sale 257 in the Gulf of Mexico—ending nearly a year of uncertainty for the federal offshore oil and gas lease auction. Lease Sale 257 originally took place in November 2021, but a court vacated the sale in January. ****************************************************** Inflation Reduction Act (IRA) and the Methane Tax Around 30% of upstream gas production sent to sales in 2020 violates the IRA’s 0.2% methane intensity threshold and will incur a liability assuming no operational changes by 2024. Violations are heavily attributed to private operators, where 50% of gas sent to sales emits excess methane compared to only 21% for public producers. The financial impact of the methane tax, which will affect upstream and midstream
Source: Enverus
In comments supporting the EPA’s methane regulations, the American Petroleum Institute (API) noted that thanks to innovation and industry initiatives like The Environmental Partnership, average methane emissions intensity declined nearly 60 percent from 2011 to 2020 across the seven major producing regions. The President of National Ocean Industries Association (NOIA), Erik Milito, issued this statement following the passage of the IRA:“As we said when the Inflation Reduction Act of 2022 passed the Senate, no piece of legislation is perfect. However, we welcome passage by Congress of a bill which undoubtedly secures an all-of-the-above energy framework to boost offshore oil and gas, offshore wind, and carbon capture and storage — all key priorities for long-term American energy security.We are confident that the president will swiftly sign this into law, and that America’s offshore industry will keep doing what it does best: producing American energy.We once again thank Senator Manchin and his team for brokering this legislation.” In October, a great deal of discussion was directed toward emissions at the Annual Technical Conference and Exhibition (ATCE) of the Society of Petroleum Engineers. Executives from several major companies encouraged industry collaboration to solve the challenges. Balancing investment in fossil fuels while producing more oil and gas and working to achieve net zero emissions has become known as the energy trilemma.
G rowth T hrough E ducat i on - O c tober / N ov ember / D e c ember 2022 19
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