Methane leaks from small oil wells spur call for stiffer U.S. regulation

Jennifer A. Dlouhy April 20, 2022

(Bloomberg) — Environmentalists are calling on the Biden administration to crack down on methane leaks from low-producing U.S. oil wells, after new research shows they are releasing a disproportionate share of the potent greenhouse gas. 

According to the study in Nature Communications, such marginal wells are gushing some 4 million metric tons of methane annually -- at a rate 6 to 12 times higher than the national average. 

Yet low-producing oil and gas wells would be largely exempted from regular monitoring requirements the Environmental Protection Agency proposed last year. The analysis underscores the potential pitfalls of the Biden administration’s plan to target new methane mandates toward bigger wells -- and is stoking calls for changes in the final regulation the EPA is set to impose by the end of the year

“The science clearly supports stronger EPA standards to reduce the outsized pollution from smaller wells,” said Rosalie Winn, director of methane and clean air policy at the Environmental Defense Fund. “We must ensure rigorous pollution safeguards apply to these low-producing, high-polluting wells, which make up the vast majority of our oil and gas infrastructure.”

Representatives of the EPA did not immediately comment on the matter. 

According to the latest research, which relies on earlier methane measurements newly integrated with production data, wells that produce fewer than 15 barrels of oil equivalent a day are allowing approximately 10% of their gas to leak into the atmosphere. Together, these marginal wells are responsible for approximately half of the methane emitted from all well sites in the U.S. -- even though they represent just 6% of the nation’s oil and gas production, the study says.

Methane, the chief component of natural gas, is blamed for a quarter of global warming today. And because it’s such a powerful short-lived greenhouse gas, packing most of its punch in the first two decades after being released, reductions now are seen as a critical strategy to restrain near-term warming and limit temperature rise to 1.5 degrees Celsius (2.7 degrees Fahrenheit), a critical tipping point.

Matthew Todd, director of The Environmental Partnership, an industry initiative, said oil and gas companies are committed to continued reductions in methane intensity “while meeting society’s growing energy needs.”

Aside from the environmental implications, methane leaks also have financial consequences. Estimated annual emissions from marginal wells are forfeiting some $700 million worth of natural gas (at 2019 prices) and fuel that could be used to power 3.6 million homes, the Environmental Defense Fund said.

Some oil and gas industry officials have encouraged the EPA to focus its attention on larger wells that make up the vast share of U.S. production, arguing the approach would be more cost-effective.

The Independent Petroleum Association of America said the group’s assessments of emissions from small wells suggest that most of the leaks come from storage tanks and separator vessels “that can be managed without the expensive leak-detection-and-repair programs demanded by environmental lobbyists.”

“Specifically targeting small American producers with expansive new regulations is the wrong approach when prices at the pump are at record highs and the Biden administration is calling on the industry to expand domestic production,” IPAA spokeswoman Jennifer Pett said by email.

Previous research has traced methane leaks at low-producing wells to mechanical failures that can go undetected until inspections and site visits.

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