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Obama's New Emissions Rules Target Oil and Gas Emissions

Cutting Off Methane Emissions at the Source

Written by Keith Kohl
Posted August 19, 2015 at 4:54PM

According to the Energy Information Administration, U.S. oil production has increased almost 100% since 2005, and natural gas has increased about 50% in the same time.

Unfortunately, this has also caused an increase in methane emissions, about 15% between 2005 and 2012. The EPA estimates that those emissions could increase another 25% in the next ten years.

That is, unless those emissions are cut back.

Natgas FlareOn Tuesday, the EPA proposed new regulations to do just that. These regulations require certain methane-reducing technologies to be installed on new oil and gas rigs, part of an initiative by President Obama to cut oil and gas methane emissions by 45% from 2012 levels.

As with any legislative change in the energy sector, the new rules have opponents. Some oil and gas companies claim they have already made changes to their technologies to reduce emissions, and that the new rules are duplicative.

However, some companies in the sector support the changes for one very important reason: natural gas is made in large part of methane, and so a decrease in methane emissions means an increase in natural gas supplies.

Understand, even companies that were already regulating their own emissions could benefit from the new regulations, which offer guidelines for improvement.

This could also be a boon to the larger Obama Administration's Clean Power Plan, which calls for the reduction of all greenhouse gas emissions across the country. Natural gas emits about half the gases of coal, still the country's dominant energy source.

And, as with the CPP, companies have some freedom to choose exactly how they apply the new technologies to their infrastructures.

Executive VP at Southwestern Energy Co. Mark Boling says, “We think that the combination of approaches really allows a company a lot of flexibility to assess their own emissions profile and determine for that particular company what is the most cost-effective way to reduce methane emissions.”

To continue reading...

Click here to read the Wall Street Journal article. (May require a subscription to read in full.)

Until next time,

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Keith Kohl

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A true insider in the energy markets, Keith is one of few financial reporters to have visited the Alberta oil sands. His research has helped thousands of investors capitalize from the rapidly changing face of energy. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital as well as Investment Director of Angel Publishing's Energy Investor. For years, Keith has been providing in-depth coverage of the Bakken, the Haynesville Shale, and the Marcellus natural gas formations — all ahead of the mainstream media. For more on Keith, go to his editor's page.

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