Cop: US finalises broad methane limits on oil sector
Dubai, 2 December (Argus) — Oil and gas producers across the US will have to address methane leaks and gradually eliminate routine flaring from new wells under landmark regulations finalised today by President Joe Biden's administration.
The regulations for the first time will impose federal methane limits on the vast number of existing oil and gas facilities across the US, cutting methane emissions from those facilities by a projected 80pc more than expected business-as-usual levels. The US Environmental Protection Agency (EPA) expects the rule will prevent the release of 58mn tonnes of methane from 2024-2038, which is equivalent to 1.5bn t of CO2.
EPA unveiled its methane rule during the Cop 28 UN climate conference in Dubai, giving the US an example of efforts to achieve its Paris Agreement pledge to reduce greenhouse gas emissions (GHG) by half by 2030, compared with 2005.
The emissions reduction from the methane rule in 2030 alone is projected to be 130mn t of CO2e. “That amounts to almost 2pc of our annual emissions, helping to close that gap even further,” White House climate adviser Ali Zaidi told reporters in Dubai.
Zaidi also said the regulation is just one of more than 100 actions the US has taken over the past year to address methane, including the deployment of millions of dollars through the IRA.
Methane is a highly potent GHG that routinely leaks from oilfield equipment such as pneumatic controllers, storage tanks, compressors and flares. The final rule will require operators to replace leak-prone equipment and create programs to regularly look for leaks, complete timely repairs and phase out routine flaring. EPA expects those efforts will allow for the capture of more than 1 Bcf/d of natural gas that can be sold to customers, in addition to preventing the release of 16mn t of volatile organic compounds from 2024-2038.
EPA said it has strengthened the rule since it was [first proposed](https://direct.argusmedia.com/newsandanalysis/Article/2269903) in November 2021, in part through a [supplemental proposal](https://direct.argusmedia.com/newsandanalysis/Article/2390407) last year that would require phasing out routine flaring of associated gas from new oil wells. In response to industry feedback, EPA said it has revised that proposal to phase in the flaring restrictions over two years, in addition to offering flexibility to allow flaring at wells that do not release significant amounts of natural gas.
The Biden administration's crackdown on methane emissions have split the oil and gas sector, with small producers raising concerns that the recurring cost of looking for methane leaks will ultimately force them to shut in large numbers of marginal wells. Larger producers that already have methane programs have offered support for uniform federal methane regulations.
“BP welcomes the finalisation of a federal methane rule for new, modified and – for the first time – existing sources,” BP America president Orland Alvarez said. "A well-designed rule will help drive material methane emission reductions this decade and beyond.”
The final rule will include a "super emitter program" under which third parties will be able to use remote sensing technology to report large methane leaks.
EPA is regulating methane from existing oil and gas facilities under a section of the Clean Air Act that will require states to draft compliance plans. EPA had proposed to give states 18 months to submit plans, with compliance for oil and gas facilities required within 36 months. That could mean binding emission cuts might not be required in some states until 2028, assuming the regulations hold up in court and are not revised by a future administration.
Even with the lag time in compliance, oil and gas operators will still have incentives to achieve early emission cuts to avoid a new federal "fee" on excessive methane leaks. That fee, created by the Inflation Reduction Act, will start at $900/t next year and rise to $1,500/t in 2026, with collection staying in effect until states fully comply with the new methane regulations.
Send comments to feedback@argusmedia.com
ck/mb 4.1
Copyright © 2023 Argus Media Ltd - www.ArgusMedia.com - All rights reserved.
Related news posts
Brazilian banks, IDB plan new Amazon fund
Brazilian banks, IDB plan new Amazon fund
Sao Paulo, 26 July (Argus) — Brazil's three state-owned banks — Caixa, Banco do Brasil and development bank Bndes — and the Inter-American Development Bank (IDB) are planning to launch a new fund to finance sustainability programs in the Amazon forest, they said on Thursday. The plan is to establish an Exchange Traded Fund — to be called ETF Amazon For All — and distribute quotas before the UN Cop 30 climate summit, which will be held in Brazil's Para state, near the mouth of the Amazon, in November 2025. The fund's investment portfolio will be made up of fixed-income securities issued by the three Brazilian banks. The return offered to investors will be based on a reference index to be created. All the funds raised by the three institutions will be allocated to loans for sustainable projects in the Amazon. "This cooperation, aimed at joining efforts in favor of the Amazon's sustainable development and based on an innovative instrument in the Brazilian capital market, reinforces Bndes' commitment to the Cop 30 agenda," the bank's president Aloizio Mercadante said. The fund is "another step towards ensuring that the Amazon" lasts forever, IDB's president Ilan Goldfajn said. The announcement was made during a G20 meeting attended by finance ministers and central bank presidents in Rio de Janeiro this week. Brazil is presiding over G20 this year. By Lucas Parolin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Eni confident on 2024 output, but Libya project slips
Eni confident on 2024 output, but Libya project slips
London, 26 July (Argus) — Executives at Italy's Eni are confident it will achieve the upper end of its 1.69mn-1.71mn production guidance for this year, but start-up of a key Libyan project is set to slip from 2026 into 2027. In a presentation of second-quarter earnings today, A&E Structure was one of two Libyan projects on a list of Eni's upcoming start-ups through to 2028 that will deliver some 740,000 b/d of oil equivalent (boe/d) of net production to the company. A&E Structure is a 160,000 boe/d gas development that will include some 40,000 b/d of liquids production, mainly condensate. A&E Structure is central to Libya's ability to sustain gas exports to Italy, which have dropped in recent years on a combination of rising domestic consumption and falling production. Supplies through the 775mn ft³/d Greenstream pipeline hit their lowest since the 2011 revolution in 2023, averaging 250mn ft³/d. The slide has continued since, with year-to-date volumes of around 160mn ft³/d on track for a record low. Eni's other upcoming Libyan project — the Bouri Gas Utilisation Project development that aims to capture 85mn ft³/d of gas at the 25,000 b/d offshore Bouri oil field — had already been pushed back from 2025 to 2026. For 2024 Eni expects to be "at the upper boundary of its guidance", according to chief operating officer of Natural Resources Guido Brusco. The company had a strong first half, during which output was 1.73mn boe/d — 5pc up on the year — thanks to good performance at assets in Ivory Coast, Indonesia, Congo (Brazzaville) and Libya. Brusco said Eni is in the process of starting up its 30,000 boe/d Cassiopea gas project in Italy, with first production expected next month, and the 45,000 b/d second phase of the Baleine oil project in Ivory Coast is expected to start by the end of this year. At Baleine, Brusco confirmed the two vessels to be used at phase two "will be in country in September and, building on the experience of phase one, we expect a couple of months of final integrated commissioning" before first oil. Eni also said today it would raise its dividend for 2024 by 6pc over 2023 to €1/share, and confirmed share repurchases this year of €1.6bn. It said there is potential for an additional buyback of up to €500mn, which is being evaluated this quarter. Eni's debt gearing is scheduled to fall below 20pc by the end of the year. Chief financial officer Francesco Gattei said these accelerated share buybacks would be possible if divestment deals are confirmed. By Jon Mainwaring and Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia’s Ichthys LNG to restart liquefaction train
Australia’s Ichthys LNG to restart liquefaction train
Singapore, 26 July (Argus) — The second liquefaction train at Australia's 9.3mn t/yr Ichthys LNG export terminal plans to resume partial operations today, after going off line unexpectedly during 18-19 July, according to traders. The export facility is operated by Japanese upstream firm Inpex. Repairs at the affected train could take up to a month before it returns to full production, although the train is expected to restart by this weekend, according to market participants. Attempts to restart train two could take place by 26 July. Some delays to deliveries from the facility are expected, although there are also unconfirmed reports that up to two cargoes may have already been cancelled at the time of writing. The overall impact on the market is likely to be limited for now, with continuing weak spot demand from northeast Asian importers. Some term buyers previously requested for their deliveries to be deferred, traders said, although it is unclear just how many requests for deferment were received. But other participants have pointed out that the winter restocking season could soon start and any further impediments to train two's restart could lift prices. Recent temperatures in Japan have been higher than expected, with at least a 70pc probability of above-normal temperatures over the vast majority of the country until 23 August, according to the latest forecast issued by the Japan Meteorological Agency on 25 July. At least one Japanese utility may be considering spot purchases for August, owing to higher-than-expected power consumption because of warmer temperatures. But at least two other Japanese firms could be looking to sell a September and an October cargo each, traders said, which could indicate that the spot market is still sufficiently well-supplied to cope with additional demand from Japanese utilities. The 174,000m³ Grace Freesia departed from Ichthys on 25 July after loading an LNG cargo, according to ship tracking data from Kpler. The export terminal sold a spot cargo for loading over 2-6 June at around high-$9s/mn Btu through a tender that closed on 10 May, but further details are unclear. The US' 17.3mn t/yr Freeport export terminal also faced issues restarting since it was first taken off line on 7 July as a precautionary measure against Hurricane Beryl. The terminal loaded its first cargo on 21 July . All three trains are likely to be back on line as of 26 July, although production at the facility should still be closely monitored, traders said. By Naomi Ong Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia’s Empire Energy signs deal to sell gas to NT
Australia’s Empire Energy signs deal to sell gas to NT
Adelaide, 26 July (Argus) — Australian independent Empire Energy has signed an agreement to supply the Northern Territory (NT) with gas from its Carpentaria project in the onshore Beetaloo subbasin. Empire will supply NT with up to 25 TJ/d (668,000 m³/d) of gas over 10 years, starting from mid-2025. This equates to an estimated total supply of 75PJ (2bn m3) of gas. The deal includes scope for an additional 10 TJ/d for up to 10 years if production level at the Carpentaria plant exceeds 100 TJ/d. The firm bought domestic utility AGL Energy's dormant 42 TJ/d Rosalind Park gas plant late last yearwith plans to reassemble the facility on site at Carpentaria, subject to a final investment decision on the project. Gas will be delivered to the NT government-owned Power and Water (PWC) via the McArthur River gas pipeline on an ex-field take-or-pay basis, Empire said on 26 July. PWC in April signed an agreement to buy 8.6PJ of gas from Australian independent Central Petroleum , to supply gas-fired power generation and private-sector customers. Low production at Italian energy firm Eni's Blacktip field, offshore the NT, has led PWC to court new supply while providing a new outlet for prospective producers operating within Beetaloo. The largest Beetaloo acreage holder, Tamboran Resources, has revealed ambitious plans for a 6.6mn t/yr LNG plant to be located near Darwin Harbour's two existing LNG projects, using the basin's shale gas resources as feedstock. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more