The California Independent Petroleum Association (CIPA) has partnered with the Domestic Energy Producers Alliance (DEPA) to raise serious concerns about new methane regulations promulgated by the US Environmental Protection Agency (EPA).
The letter, which can be viewed here, expresses serious concerns about the EPA’s new methane emissions regulation — subpart OOOOc — and its impact on oil and natural gas marginal well owners. The coalition of 30 organizations joining the DEPA effort represents thousands of small family businesses. We are urging the inclusion of targeted regulatory relief in Title II of the report accompanying the Subcommittee on Interior, Environment, and Related Agencies’ FY 2025 appropriations bill.
The EPA’s new rule, which is final, is titled “Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources: Oil and Natural Gas Sector Climate Review.” It does not adequately consider the unique challenges faced by operators of marginal wells. Marginal wells are vital to our nation’s energy security and the livelihoods of thousands of American workers.
Marginal oil and natural gas wells, despite their relatively low individual production levels, play a significant role in the U.S. energy landscape. Here are some key contributions they make:
Energy Security: Marginal wells contribute to the diversification and stability of the domestic energy supply. By producing oil and gas locally, they help reduce dependence on foreign energy sources and enhance national energy security.
Economic Impact: These wells support local economies, particularly in rural and economically disadvantaged areas. They provide jobs and revenue for small businesses, landowners, and communities through royalties and taxes.
Production Volume: Collectively, marginal wells produce a substantial amount of oil and natural gas. While each well may produce less than 15 barrels of oil per day or less than 90 Mcf of gas per day, their combined output is significant, contributing to the overall energy supply.
Resource Maximization: Marginal wells help maximize the extraction of resources from existing fields. They can prolong the productive life of oil and gas fields by recovering reserves that might otherwise be uneconomical to produce with larger operations.
Environmental Management: Marginal well operators often have a vested interest in maintaining good environmental practices, as their livelihood depends on the sustainability of their operations. Properly managed marginal wells can minimize environmental impacts and contribute to responsible resource extraction.
Technological Innovation: The challenges faced by marginal well operators often drive technological innovations and efficiencies in drilling, production, and well management. These advancements can benefit the broader industry by improving overall resource recovery and reducing costs.
Energy Independence: Marginal wells contribute to the goal of energy independence by increasing domestic production. This aligns with national policy objectives to reduce reliance on imported energy and improve the resilience of the U.S. energy system.
Without the necessary accommodations, this rule will devastate small marginal well operators, forcing many to shut down. Previous rulemakings have recognized the need for tailored approaches for marginal wells, and we believe such a balanced approach is essential in this instance.
The following organizations are partnering with DEPA on this matter:
Arkansas Independent Producers and Royalty Owners
California Independent Petroleum Association
Domestic Energy Producers Alliance
Energy Workforce and Technology Council
Gas and Oil Association of West Virginia
Independent Oil and Gas Association of New York
Independent Petroleum Association of America
Independent Producers Association of New Mexico
Indiana Oil and Gas Association
Kansas Independent Oil and Gas Association
Kentucky Oil and Gas Association
Louisiana Oil and Gas Association
Michigan Oil and Gas Association
Montana Petroleum Association
National Stripper Well Association
New Mexico Oil and Gas Association
New York State Oil Producer Association
North Dakota Petroleum Council
Ohio Oil and Gas Association
Oil and Gas Workers Association
Panhandle Producers and Royalty Owners Association
Pennsylvania Independent Oil and Gas Association
Permian Basin Petroleum Association
Petroleum Association of Wyoming
Southeastern Ohio Oil and Gas Association
Texas Alliance of Energy Producers
Texas Independent Producers and Royalty Owners
Utah Petroleum Association
Western Energy Alliance
For more information, contact Sean Wallentine.