Drillers Want Small Wells Exempt From Biden’s Methane Leaks Regulation

Active pumpjacks from oil wells are pictured at the Inglewood Oil Field, the largest urban oil field in the United States, from the Baldwin Hills Scenic Overlook, in Culver City, Calif., on Mar. 10, 2022. (Bing Guan/Reuters)

Oil and gas firms want the Biden administration to make small wells exempt from rules aimed at controlling methane emissions, arguing that such measures are unnecessary for the segment.

Last year, the Environmental Protection Agency (EPA) proposed measures according to which oil and gas companies will have to monitor their biggest wells every three months as well as find and fix any methane leaks. In addition, the proposal would require equipment like pneumatic pumps, storage tanks, and compressors to be upgraded. The plan also seeks to ban the venting of methane—generated as a byproduct of crude oil—into the atmosphere.

However, the proposal did not mention how oil and gas firms should manage their smaller wells, which produce fewer than 15 barrels per day.

The industry claims that the smaller wells produce an insignificant amount of methane and usually run on small margins. Forcing oil and gas companies to follow stringent rules of the proposal could turn them unprofitable.

A coalition of 20 state drillers’ associations and the Independent Petroleum Association of America (IPAA) have asked the Biden administration to exclude wells producing less than six barrels per day as it would be inefficient and costly, according to Reuters.

“Deal with the stuff where you know the emissions are coming from, don’t just mandate something that goes across the board whether you have a one-barrel a day well or a 15-barrel a day well,” said Lee Fuller, environment and general strategy officer for the IPAA, according to the media outlet.

Methane Emissions, EPA Rules

There were an estimated 565,000 active small wells across America in 2019, according to an estimate by nonprofit Environmental Defense Fund (EDF). Together, they accounted for 81 percent of all wells in the country.

The EPA had last year proposed that smaller wells would have to be inspected only once, unlike larger wells ,which can be subjected to periodic inspections. Environmentalists oppose it and want periodic inspections for the smaller wells as well.

Though they only account for 5.6 percent of the total oil and gas output produced domestically, these small wells make up roughly half of the methane emitted by the industry, the EDF calculates.

The IPAA insists that among smaller wells, it is only those on the higher side of production which emit larger quantities of methane.

And though small wells collectively make up only a tiny portion of the domestic oil and gas output, their supply is critical at present when the Russia–Ukraine war has created widespread uncertainties in the market.

In December 2021, Rep. Dan Crenshaw (R-Tex.) wrote a letter to President Joe Biden warning that stringent regulations proposed by the EPA for methane emissions will harm America.

“EPA’s proposal is harmful to the lives and livelihoods of millions of hardworking American families. We urge you to withdraw this proposal and refrain from issuing punitive regulations that further increase energy prices and undermine America’s energy security,” the letter said.