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SMALL PRODUCERS ARE BIG METHANE EMITTERS: Some of the oil and gas industry’s largest emitters of methane are the smaller, independent producers that have long been less forthcoming about their operations, a finding that is certain to put more pressure on the EPA as it crafts new methane regulations.
Despite accounting for just 9% of total oil and gas production, the smallest 195 producers were responsible for 22% of greenhouse gas emissions, according to a report released this morning by the Clean Air Task Force, Ceres, and M.J. Bradley & Associates. The report compares the emissions of the top 300 U.S. oil and gas producers, using data the companies are required to submit to the EPA’s greenhouse gas reporting program.
For example, the report found the biggest methane emitter is Hilcorp Energy, the 19th-largest oil and gas producer in the country. Other far lesser known producers — such as Terra Energy Partners, Flywheel Energy, Blackbeard Operating, and Scout Energy — all ranked in the top 10 methane emitters, surpassing many of the biggest U.S. oil and gas producers.
The report comes as the EPA is readying new regulations to curb methane emissions from both new and existing oil and gas operations. President Joe Biden directed the agency to issue a new methane proposal by September to support his aggressive climate agenda.
A separate report last month from the United Nations found the oil and gas sector has some of the largest potential to curb methane emissions in the near term, at a relatively low cost.
How to regulate smaller producers has always been a point of contention: Many of the oil and gas majors, including ExxonMobil and BP (which also ranked in the top 10 methane emitters), have backed federal regulations on methane in recent years.
Smaller independent producers, however, have vigorously fought methane mandates, arguing they don’t have the capital to spend on equipment to monitor, detect, and plug emissions leaks.
The EPA is already acknowledging its forthcoming proposal could have a significant economic effect on smaller companies. The agency announced last month it is seeking nominations for a potential small business advocacy review panel, which it is required to convene if its regulation would have a “significant economic impact on a substantial number of small entities.”
Today’s report, however, is likely to increase pressure on the EPA to target methane from small producers, no matter the cost, from environmentalists eager to see a rapid decline in emissions of the potent greenhouse gas.
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BIDEN SUSPENDS ANWR DRILLING LEASES: The Biden administration announced yesterday it is suspending all leases to drill oil and gas in Alaska’s Arctic National Wildlife Refuge, likely igniting a major legal battle.
It’s the latest step by the Interior Department to overturn a trademark effort from Republicans in Congress and the Trump administration to start the first drilling program in a small section of the 19.3 million-acre refuge, known as the “1002 area,” where billions of barrels of oil are believed to lie beneath the coastal plain.
The Trump administration, eager to deliver on a mandate from the 2017 Republican tax cut bill, conducted the first lease sale in early January, just weeks before Biden was inaugurated.
But it produced a disappointing result: An economic development corporation owned by Alaska offered the high bid on all but two of the 11 leases sold, which generated a paltry total of $14.4 million. No large public oil companies made bids, because of a combination of low prices from the pandemic and the fact that investors concerned about exposure to climate change financial risks, including several U.S. banks, have vowed not to fund Arctic drilling.
What’s happening now: The Interior Department’s order, citing “legal deficiencies” in the Trump administration’s environmental review of the leasing program, calls for a temporary moratorium on all activities related to leases that have been granted pending a new analysis.
Interior will then determine whether the leases should be reaffirmed, voided, or subject to additional environmental mitigation measures.
Legal battle: But it’s legally dubious whether Biden could cancel the leases if it decides they were granted illegally.
Republican Sen. Lisa Murkowski, who led a decadeslong quest to allow drilling in the refuge to boost her oil-dependent state, said in a statement that the Biden administration does not have the “discretion” to suspend the leases, given the drilling program was permitted in legislation passed by Congress.
Alaska Gov. Mike Dunleavy, a Republican, pledged to “use every means necessary to undo this egregious federal overreach.”
GRANHOLM TO PITCH HELP FOR FOSSIL FUEL WORKERS IN WEST VIRGINIA: Energy Secretary Jennifer Granholm is traveling with Sen. Joe Manchin to his home state of West Virginia tomorrow and Friday as she tries to make the case that fossil fuel-dependent regions won’t be harmed by the administration’s investments in infrastructure and clean energy.
In order to pass a significant climate bill, the Biden administration will have to convince Manchin, a key centrist swing vote, and his constituents that it can support fossil fuel workers as it looks to phase down the use of coal, oil, and gas in the economy.
Policies targeting fossil fuel workers: Biden’s infrastructure plan calls on Congress to invest $40 billion for training to help “dislocated” workers transition into new clean energy jobs.
It also invests $16 billion to employ “hundreds of thousands” of fossil fuel workers to plug leaking oil and gas wells and restore and reclaim abandoned coal mines. And it calls on Congress to offer companies subsidies to build or retool manufacturing and industrial facilities in rural areas to make clean energy technologies.
Manchin, uncoincidentally, has introduced legislation to that effect that would dedicate half the funding for use in places where coal mines have closed or coal plants have retired, such as West Virginia, a big coal and natural gas producing state.
SPEAKING OF…BIPARTISAN BILL TO PLUG OIL AND GAS WELLS: Reps. Lizzie Fletcher, a Texas Democrat, and Kelly Armstrong, a North Dakota Republican, introduced legislation yesterday that would provide more than $4.6 billion in federal funding for states and tribes to plug “orphan” oil and gas wells whose owners are either unknown or insolvent.
Armstrong, representing a huge oil-producing district that was hit hard by the pandemic, said the legislation “create and retain tens of thousands of jobs for workers in the oil and gas sector across the country.”
The bill, mirroring a similar bipartisan Senate legislation, could provide a blueprint for enacting Biden’s proposed program.
G7 STILL SPENDING MORE ON FOSSIL FUELS THAN CLEAN ENERGY: Pandemic recovery spending in G7 nations has benefited fossil fuels more than clean energy, with much of the $189 billion the countries spent between January 2020 and March 2021 on coal, oil, and gas coming with no “green strings” attached, according to a report this morning from development charity Tearfund.
By comparison, Tearfund found the G7 nations spent $147 billion on clean energy, and just $1 out of every $10 was directed to support zero-carbon energy such as renewable power and energy efficiency.
The U.S. committed the largest amount of money to fossil fuels, a total of $72 billion, the report said. However, Biden’s infrastructure proposal, which includes massive investments in climate and clean energy, would help green the U.S. recovery, the report added.
Tearfund recommends G7 nations commit 40% of their recovery spending to support clean energy. Currently, G7 countries are estimated to be spending just 22% of their recovery dollars on clean energy.
RELATED…CLEAN ENERGY SPENDING ON THE RISE BUT NOT ENOUGH: Governments around the world are on track to spend $750 billion on clean energy and energy efficiency this year, an uptick in investment but still far below what is needed to reach global climate goals, the International Energy Agency said in a new report this morning.
Overall, the IEA expects annual global energy investment to rise to $1.9 trillion in 2021, a 10% rebound from last year, and much of that money will go to the power and end-use sectors, rather than fuel production. Within the power sector investments, 70% of the $530 billion expected to be spent on new generation capacity will go to renewables, the IEA said.
Nonetheless, the IEA also reports a slight increase in investment decisions for new coal-fired power plants last year, largely due to China.
The IEA also expects investment in oil and gas production to increase 10% this year, though spending levels will remain well below pre-pandemic levels. Oil and gas industry spending on clean energy will also increase, likely to reach more than 4% of the industry’s total capital investment, the IEA says.
REPUBLICANS BACK BIDEN CALL FOR GREEN BANK: Republican Reps. Brian Fitzpatrick of Pennsylvania and Don Young of Alaska signed on to a letter with Democrats yesterday asking House leaders to include a provision creating a national green bank, supported by Biden, as part of infrastructure legislation.
Biden included a Clean Energy Accelerator, or green bank, in his fiscal year budget proposal and in the American Jobs Plan.
The Republicans, joined by Democrats Debbie Dingell of Michigan and Paul Tonko of New York, are pushing for the creation of a $100 billion nonprofit organization, overseen by the Department of Energy, that would finance clean energy and climate-related projects that struggle to access capital. That government funding, they said, would help leverage, or accelerate, private sector financing from banks, investors, community development finance institutions, credit unions, and more.
“We do not have a moment to lose in this climate fight. The Clean Energy and Sustainability Accelerator Act can play a meaningful and immediate role in reducing carbon pollution and expanding good American job opportunities,” wrote the lawmakers, who also called climate change a “crisis,” using urgent language not normally associated with Republicans.
SENATE TO GRILL COLONIAL PIPELINE CEO: The head of Colonial Pipeline will answer to Congress on June 8 about a ransomware attack on the company system that shut down the supply of gasoline along the east coast last month, triggering significant shortages, long gas station lines, and increased prices.
Colonial Pipeline CEO Joseph A. Blount will testify before the Senate Homeland Security and Governmental Affairs Committee about the May attack.
“The hearing will examine the need to address cybersecurity vulnerabilities in critical infrastructure and how to strengthen federal coordination and response when attacks on private entities occur,” said top committee Republican Rob Portman of Ohio, who announced the hearing with Chairman Gary Peters, a Michigan Democrat.
The Rundown
Chicago Tribune Gov. J.B. Pritzker touts ‘fiscal discipline’ of $42 billion budget passed by Democrats as debate over energy policy and subsidies to ComEd parent drags on
New York Times A big climate problem with few easy solutions: planes
Bloomberg Exxon-beating activist Engine No. 1 plans ETF to prod boardrooms
Reuters ‘Greenium’ shrinks as climate bond sales swell to record
Calendar
TUESDAY | JUNE 8
10 a.m. 366 Dirksen. The Senate Energy and Natural Resources Committee will hold a hearing to consider the nominations of Tracy Stone-Manning to be director of the Bureau of Land Management, Shalanda Baker to be director of the office of minority economic impact at the Department of Energy, Samuel Walsh to be general counsel at the Department of Energy, and Andrew Light to be an assistant secretary of energy for international affairs.
10 a.m. SD-342 Dirksen. The Senate Homeland Security and Governmental Affairs Committee will hold a hearing titled, “Threats to Critical Infrastructure: Examining the Colonial Pipeline Cyber Attack.”
1:05 p.m. Energy Secretary Jennifer Granholm delivers remarks on her vision for nuclear energy at the Nuclear Energy Institute’s Nuclear Energy Assembly.
WEDNESDAY | JUNE 9
10 a.m. 301 Russell. The Senate Environment and Public Works Committee will hold a hearing titled, “PFAS: the View from Affected Citizens and States.”
