Page 7 - NorthAmOil Week 17 2021

NorthAmOil COMMENTARY NorthAmOil

The Biden
administration is set
to restore Obama-era
regulations on methane
emissions from oil and
gas.

him seeking to put the US on a path towards week that her company supports the direct reg-
phasing out fossil fuels altogether over the long ulation of methane.
term.
Thus far the Biden administration has pro- What next?
vided few details on how it intends to reach its Biden has sought to reassure the oil and gas
new 2030 emissions target – and also one to be industry on various aspects of his plans – such
producing 100% carbon emissions-free electric- as the fact that he will not seek to ban hydraulic
ity by 2035. However, it has mentioned the pos- fracturing. But uncertainty remains over how
sibility of retrofitting power plants with carbon other issues will play out.
capture capacity, among other measures. For example, prior to Biden taking office, it
Biden’s plans are likely to be resisted by cer- was expected that he would seek to ban future
tain industries, as well as the Republican Party, federal leasing for oil and gas drilling altogether.
and it is worth noting that a future administra- However, there has been no indication since that
tion could seek to undo some of the steps he is the administration brought in a moratorium
pursuing. But until more concrete details are on leasing in order to review current practices
provided, considerable uncertainty remains. that this moratorium is about to be made per-
manent. Indeed, new US Secretary of the Inte-
Reinstating regulations rior Deb Haaland said in February, prior to her
What is clear, however, is that the industry can appointment being finalised, that the measure
expect to be regulated more strictly. This is evi- would be a temporary one.
dent from the Biden administration’s review of Similarly, the US Federal Energy Regulatory
oil and gas leasing on federal land and in federal Commission’s (FERC) new chairman, Richard
waters, as well as this week’s Senate vote on meth- Glick, has sought to reassure the energy indus-
ane emissions regulations. try that he is not opposed to pipelines. At the The Biden
The Democrat-held House of Representa- same time, though, he wants to regulate them
tives is now expected to approve the measure more carefully, including by considering their administration’s
and send it to Biden, who is anticipated to sign GHG emissions. The FERC process for evalu- position on
it into law. This will re-instate the 2012 and 2016 ating pipeline applications is also under review
Oil and Natural Gas New Source Performance now, further adding to current uncertainty natural gas in
Standards set by the Obama administration. over what to expect in the coming months and
Trump’s rollback of the regulations last year years. particular has
eliminated federal requirements for oil and gas The gas industry has additional worries
companies to monitor and repair methane leaks because Biden’s $2.25 trillion infrastructure yet to be set out
from pipelines, storage facilities and wells. plan, unveiled earlier this month, appears to more clearly.
It is worth noting that a number of oil and overlook pipelines at the same time as it seeks to
gas companies have come out in support of allocate funding to roads and other areas.
methane regulations, as their performance on The Biden administration’s position on nat-
environmental, social and governance (ESG) ural gas in particular has yet to be set out more
issues becomes increasingly more important clearly, and the industry is hoping that the
to investors and the public. Among those sup- challenges of the energy transition will soften
porting methane regulations are ExxonMobil the president’s stance over time. Nonetheless,
and Europe-based counterparts BP and Royal there is already much that is changing since the
Dutch Shell. And Occidental Petroleum’s pres- Trump presidency and the oil and gas industry
ident and CEO, Vicki Hollub, told the Senate is preparing for a dramatically different land-
Energy and Natural Resources Committee this scape over the coming years.™

Week 17 29•April•2021 www. NEWSBASE .com P7