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U.S. Set To Roll Back Methane Rules For Oil & Gas Industry

The U.S. Environmental Protection Agency (EPA) expects to finalize and sign this week new rules about methane emissions for the oil and gas sector, including putting an end to requirements that companies have systems in place to detect methane leaks, senior administration officials told The Wall Street Journal.

The EPA has proposed updating the Obama administration’s rules on methane emissions and detection.

Last year in August, the EPA proposed updates to the air regulations for the oil and gas industry in order to “remove regulatory duplication and save the industry millions of dollars in compliance costs each year – while maintaining health and environmental regulations on oil and gas sources that the agency considers appropriate.”

The EPA’s regulatory impact analysis has estimated that the proposed amendments would save the oil and gas industry $17-$19 million a year, for a total of $97-$123 million from 2019 through 2025, the agency said in August last year.

Some oil majors were unhappy with the proposed methane regulations rollback last year, while industry groups and the EPA have argued that methane regulations are not needed because oil and gas producers have every incentive to capture natural gas so they can sell the product.  

According to The Journal’s sources, the new methane rules – rescinding the 2016 regulations of the Obama administration – would apply to oil and gas wells drilled after 2016. The new rules would also exempt major pipelines and storage sites from EPA oversight of greenhouse gas emissions.

Smaller U.S. oil and gas firms have advocated for a rollback of the methane regulations, because, they have argued, meeting all the current requirements costs them so much money that it makes some areas unprofitable to drill, according to The Journal.

After recent negotiations between the EPA and the White House on a compromise for the methane rules rollback, the agency may be ready to unveil and sign the rollback of the methane regulation as soon as this week in Pittsburg, Pennsylvania—one of the largest swing states—the sources told The Journal.

By Michael Kern for Oilprice.com

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