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Methane from low-producing US oil, gas sites equal to 88 coal plants: study


Economic incentives to keep wells producing

Industry group blames storage tanks

  • Author
  • Karin Rives
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  • Bill Montgomery
  • Commodity
  • Coal Energy Transition Natural Gas

A new study by the Environmental Defense Fund found that nearly half of methane pollution released from the US oil and natural gas industry comes from low-producing and mostly older wells responsible for just 6% of the country's oil and gas production.

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The environmental group has been pressing the US Environmental Protection Agency to strengthen its proposed methane rule for new and existing oil and natural gas production systems to include smaller well sites, many of which were left out of the rule unveiled in November.

On a call with reporters to discuss their new study, EDF scientists said the agency has indicated it may expand inspection mandates to such wells in a supplemental rulemaking this summer.

"We simply can't achieve the necessary reductions in methane that are needed for the Biden administration's commitment if roughly half of emissions and potential reductions from production are left on the table," said Rosalie Winn, an EDF director and senior attorney. "Roughly three-quarters of marginal wells are owned by very large companies worth hundreds of millions of dollars in revenues each year, so operations have ample resources to ... prevent this unnecessary pollution."

Methane, the main component of natural gas, has more than 80 times the warming power of carbon dioxide over the first 20 years after it reaches the atmosphere. Scientists estimate that more than a quarter of the warming the world experiences today is caused by methane emissions from human activities.

Wasted natural gas

By reining in methane leaks from its oil and gas production, the US could save enough natural gas to replace about half of what it has promised Europe to help wean the continent off Russian exports following the war in Ukraine, EDF has estimated. In all, about $2 billion worth of natural gas is wasted annually through leaks and flares, the group said.

The methane emitted from the country's half a million low-producing wells has the same impact on the climate every year as 88 coal-fired power plants, said Mark Omara, an EDF scientist and lead author of the study.

"The methane footprint of these small wells is enormous and can't be ignored," Omara said.

The American Petroleum Institute, or API, the industry's leading trade group, would not comment directly on whether low-producing sites should be regulated but said it supports the EPA's proposed rule.

"Effective regulations have an important role to play in reducing methane emissions," Matthew Todd, director of API's environmental partnership initiative, said in an email. "Our industry recognizes the importance of developing oil and natural gas resources responsibly and is committed to delivering solutions that reduce the risks of climate change."

The Biden administration has pledged to work with other nations to collectively cut global methane emissions by 30% from 2020 levels by 2030, and in January rolled out a multi-agency effort to deliver on that promise.

Extended comment period

Meanwhile, the EPA's new methane rule is going through an extended comment period because of the interest the proposal has generated. The agency has estimated that the new requirements for operators to monitor for leaks, make repairs and install zero-emitting pneumatic controllers to eliminate venting of natural gas would eliminate 41 million tons of methane emissions between 2021 and 2035.

Published in the journal Nature Communications on April 19, the peer-reviewed EDF study found the Appalachian region has a disproportionate number of low-production well sites and is home to 29% of US operations producing less than 15 barrels of oil equivalent per day. Of some 11,700 oil and gas producers nationwide, EDF found that 770 midsize and large operators own 77% of all low-production well sites.

While 80% of onshore US oil and gas production consists of such smaller sites, they produce just a fraction, about 6%, of the products that make it to market, the study said. Because of their abundance, those sites' cumulative emissions are significant, the authors said.

Small sites should be 'reassessed'

While many such operations no longer produce much gas and oil, their owners have economic incentives to keep them open. The Internal Revenue Service and some state programs offer tax credits to operators that keep declining production wells going when oil and natural gas prices drop, the EDF study said.

"The role of low-production well sites needs to be reassessed in light of their outsized importance relative to [methane] emissions from the O&G sector and related mitigation opportunities," the authors wrote. "As part of this, there is a need for more measurement-based data and a more comprehensive look at the externalities of these low production sites."

Not everybody welcomes such scrutiny

"Our assessments of emissions from small wells have suggested that the predominant sources of emissions are storage tanks and perhaps separator vessels that can be managed without the expensive ... programs demanded by environmental lobbyists," Jennifer Pett Marsteller, a spokesperson for the Independent Petroleum Association of America, wrote in an email.

"Targeting small American producers with expansive new regulations is the wrong approach when prices at the pump are at record highs and the Biden administration is calling on the industry to expand domestic production."