Happy Wednesday! We have made it to the middle of the week!
Did anyone
happen to read The Houston Chronicle’s Texas Inc. Section on December 10,
2023, their article titled, “Small drillers fear new rules will add crushing
costs – Concerns about ‘equity’ grow among some Texas oil producers ahead of
federal methane rule”? The article was about
the ripples the new Methane Rules are sending through the small and mid-size
producers. In the beginning of December,
the Environmental Protection Agency (EPA) released their final version of their
Oil and Gas Methane Rules which has more than 1,600 pages. In the document, it lists the specifics to
reduce methane gas which is more damaging to the environment than carbon
dioxide. The Methane Rule have things which
will affect most oil and gas wells’ equipment and it will need to be replaced
due to age, type, and it allows leaks, and they will need to be inspected regularly
on a schedule for methane leaks depending on type of equipment, flaring will be
almost eliminated, and there is a methane fee per metric ton of emissions which
increases next year are some of the highlights.
The Methane Rules
implementation depends on age of well and its equipment. The fear is the smaller production companies who
have the small and mid-size wells won’t be able to make the changes because the
amount of oil pumped out of the well and the costs associated with the updated
equipment unlike the newer wells which should have the latest equipment. The
bigger companies have been transitioning their wells to the new technology
foreseeing the future of the industry. The
small producers are expecting high costs for the updates, even though the EPA
has made some exceptions in their rules for the smaller producers.
With the new Methane
Rules in place, we will be seeing more mergers and acquisitions in the oil and gas
industry this will increase as the deadlines approach. The
smaller production companies have time to implement the Methane Rules, but will
they be able to meet the strict guidelines and additional costs associated is
the question and still be profitable! If
you would like to read more of The Houston Chronicle’s article on Microsoft
Start for free, please click the link: Anxiety grows among small Texas oil producers ahead of federal methane rule (msn.com).
If you would
like to see the EPA’s new Methane Rules for Oil and Gas, please click the link:
EPA's Final Rule for Oil and Natural Gas Operations Will Sharply Reduce Methane and Other Harmful Pollution. | US EPA.
If you would
like help in looking into how to update your terminal and pipelines to comply
with the new rules, contact us via email in the blog and check out our ESC's website for contact information!
We hope you have a wonderful evening!
**Disclaimer: You may be charged a fee to read The
Houston Chronicle’s article. **