The Biden administration detailed plans Friday for $850 million in funding that will be doled out through the Department of Energy and EPA for projects that help track — and stop — methane leaks tied to oil and gas production.
The grants, allocated through the 2022 Inflation Reduction Act, will be released in three tranches, according to Deputy Energy Secretary David Turk.
The first category will offer three awards for projects focused on reducing emissions from existing oil wells and infrastructure, while the second will include up to 26 awards for addressing leaks in equipment prone to methane leaks — including engines and compressors.
The third category will go toward projects to enhance methane leak monitoring in communities near oil and gas facilities, especially those that are lower-income areas or communities of color, and will fund partnerships aimed at tracking methane emissions in specific oil and gas basins.
Turk told reporters Thursday that reducing methane emissions in the oil and gas industry is critical both for U.S. energy security and for reaching the country’s climate goals.
“To put [it] another way, even as we work to diversify our energy mix, we also have to deploy innovative technologies now to help every sector of our economy reduce emissions, including oil and gas,” Turk said.
While the overall amount of IRA funding for methane was known, the administration had not specified prior to the announcement the types of projects that could receive the money.
Friday’s announcement is the latest effort by the Biden administration to clamp down on methane emissions from oil and gas. Methane is a potent greenhouse gas, and it has about 80 times the heat-trapping power of carbon dioxide over its first 20 years in the atmosphere.
“From Day One, President Biden put a bull’s-eye on methane pollution,” said Ali Zaidi, Biden’s national climate adviser, during the Thursday press call. “He’s not only moved to address these leaks and vulnerabilities in our energy system here at home — where he’s enacted a bold methane action strategy and passed historic legislation to take on ethane emissions — the president’s rallied the entire world to tackle this superpollutant.”
In December, EPA announced a new rule that requires oil and gas operators to monitor for methane leaks and update their equipment to ensure it’s less prone to leaks. It also bans oil and gas companies from burning off — or flaring — excess gas at oil wells in most instances, among other things.
Texas Attorney General Ken Paxton (R) filed a lawsuit challenging the rule earlier this year, alleging that it exceeds EPA’s authority.
A month later, EPA released more details for a methane fee that will be charged to operators that emit methane equivalent to at least 25,000 metric tons of carbon dioxide emissions. This year, that fee will be $900 per metric ton of methane and will rise to $1,500 per metric ton by 2026.
House Republicans have passed a bill targeting the fee, and Senate Republicans led by Texas Sen. Ted Cruz tried to do the same last month but have been unsuccessful.
EPA has also released other grants aimed at targeting methane emissions. It announced $350 million in formula grant funding to 14 states in December to help them measure and reduce methane emissions from low-producing well sites — money that was also included in the Inflation Reduction Act.
‘Legacy air pollution’
Some state oil and gas regulators and oil and gas companies have complained that the new methane rules are onerous and will cost millions to comply with — costs that could strain state agencies and could put some smaller operators out of business. Environmental groups and oil and gas watchdogs, however, say the rules are important to reduce emissions and help stave off the worst effects of climate change.
On the Thursday press call, Deputy EPA Administrator Janet McCabe said the grants will help smaller operators comply with the new rules and, ultimately, will benefit the fossil fuel industry.
“This effort will help reduce inefficiencies in the U.S. oil and gas operations, will help mitigate legacy air pollution, create new jobs in the energy sector and in disadvantaged communities, and will help us realize near-term emissions reductions and our ambitious climate and clean air goals,” McCabe said.
Data from the U.S. Energy Information Administration released Thursday shows that methane emissions in the U.S. are on the decline. EIA said preliminary data from annual reported volumes of natural gas vented or flared declined to 0.5 percent of gross withdrawals in 2023 — the lowest rate of venting and flaring recorded in 18 years.
The World Bank, however, released a separate report Thursday indicating that the percentage of methane burned in relation to oil and gas production had actually risen in 2023.
The World Bank report showed that flaring intensity in the U.S. grew by 11 percent in 2023 compared with 2022, due to unusually hot weather in the Permian and Eagle Ford basins and unreliable pipeline infrastructure. Still, the World Bank said, the U.S. “remains one of the countries with the lowest flaring intensities in the world.”
Zaidi said Thursday that although he did not know the specifics of the World Bank report, the U.S. has already taken among the most aggressive steps to curb methane emissions from the oil and gas industry by banning routine flaring.
“We know and are confident that by implementing not only those rules, but this broad set of investments as part of a sweeping methane action plan, we will continue to reduce the emissions intensity of this sector of our economy,” Zaidi said.
This story also appears in Climatewire.
