METHANE MADNESS: Yesterday, the Bureau of Land Management finalized a rule aimed at reducing methane leaks from oil and gas drilling on federal and tribal lands, its latest effort to crack down on methane emissions, a potent greenhouse gas that’s 28 times more powerful than carbon dioxide at trapping heat in the atmosphere.
What the rule does: The rule would create stricter requirements for gas flaring on federal lands, or create “waste minimization plans” to cut down on flaring. The rule would mandate that energy companies improve their efforts to detect methane leaks.
The new rule also charges producers to pay royalties on “wasted” natural gas flaring.
Interior Secretary Deb Haaland said the rule “will increase accountability for oil and gas operators and benefit energy communities now and for generations to come.”
The rule is expected to generate more than $50 million in natural gas royalties each year, according to BLM.
But wait, aren’t there other methane rules? Yes! This new rule is separate and different from the Environment Protection Agency’s rule, which was finalized in December. The rule is a bit more comprehensive than BLM’s, in which the EPA’s rule would aim to reduce methane from hundreds of thousands of existing sources across the country. Announced at COP28, the rule would phase in a requirement to eliminate flaring of natural gas produced by new oil wells, require routine monitoring for methane leaks from sites and stations, and establish reduction standards from high-emitting equipment like controllers, pumps, and storage tanks.
The rule would also require third party expertise to detect large methane releases that are known as “super emitters.”
But isn’t there another one…? Right again. In January, the EPA proposed a rule that would implement a methane fee, created by the Inflation Reduction Act – and would establish new costs across the sector beginning in March 2025. The rule would impose a fee on nine categories of facilities that had reported more than 25,000 metric tons of carbon dioxide
equivalent of GHG emissions. The provision sets three different thresholds for the facilities to determine how much excess emissions were released, which would then determine the cost of the fee.
But there’s more: The Transportation Department issued a rule in May of last year that would aim to reduce methane emissions from gas pipelines by strengthening leak detection and repair standards. The rule would aim to reduce emissions from covered pipelines by up to 55%. (Read more on that here.)
What this represents: The Biden administration has launched a number of efforts to reduce methane across fossil fuel sectors – and it can be hard to keep track of the different efforts. However, many of these regulations are facing fierce opposition from oil and gas groups – and it’s possible that this latest rule could face legal challenges similar to ones in the past. In 2020, a federal judge axed an Obama-era BLM methane rule in a case led by Republican states and fossil fuel groups, arguing that the agency overstepped its jurisdiction by issuing the methane emissions regulations.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment writers Breanne Deppisch (@breanne_dep) and Nancy Vu (@NancyVu99). Email bdeppisch@washingtonexaminer dot com or nancy.vu@washingtonexaminer dot com for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
JPMORGAN SEES $100 BRENT CRUDE BY LATE SUMMER: JPMorgan Chase analysts projected that Brent crude could rise to $100 by late September, thanks to Russian production cuts.
The bank said that Russia’s commitment to lower supply is surprising but “genuine,” according to the Oil Price Information Service. Futures currently suggest prices about $16-$17 off that price.
Brent crude was up this morning by more than 1% to above $87.
AN SPR REFILL: The Biden administration has issued contracts to buy more than 2.7 million barrels of oil to help replenish the government’s emergency stockpile on Monday, according to an announcement from the Department of Energy.
DOE said it will spend $225 million for barrels that will be delivered in September. According to the notice, the agency will purchase roughly 793,000 barrels from Atlantic Trading and Marketing Inc, 1.2 million barrels from Macquarie Commodities Trading U.S., and 793,000 barrels from Sunoco Partners.
According to Reuters, the price of each barrel is roughly $81.32. The Energy Department previously said that its goal was to purchase barrels at a price of $79 each, or less. A spokesperson for DOE had told Reuters that the average purchase price for this week’s transaction and earlier purchases remained below $79. More on that here.
IN GEORGIA, YELLEN ISSUES WARNING TO CHINA ON CLEAN ENERGY PRODUCTION: Treasury Secretary Janet Yellen said yesterday that she plans in her April trip to China to press the country’s leaders on its “excess” production and exports of solar panels, electric vehicles, and batteries.
Yellen, who was in Norcross to tout the reopening of a factory that will produce solar panels and take advantage of IRA subsidies, said in her remarks that excess Chinese government support for industry “distorts global prices and production patterns and hurts American firms and workers, as well as firms and workers around the world.”
She said that the U.S. needs a level playing field and that she aims “to make it a key issue in discussions during my next trip there.”
Wresting manufacturing share from China, of course, was a major purpose of the IRA. But the pressure to counteract China has only grown in recent months, as the election nears and Chinese automaker BYD reportedly weighs plans to manufacture EVs in Mexico.
In terms of punitive measures against China, President Joe Biden has been outflanked by Donald Trump, who said that he would impose 100% tariffs on Chinese cars manufactured in China, on top of the suite of other tariffs he has pledged.
China’s climate envoy says economic competition is a climate risk: Separately, Liu Zhenmin, Beijing’s special climate envoy, said today that economic competition has become a major climate risk.
“Protectionism and economic competition are becoming another problem,” he said at the Boao Forum for Asia in Hainan, China, according to Bloomberg.
He said that tariffs and other protectionist measures are raising costs and slowing the adoption of clean energy.
That, of course, has been the tension within the IRA that has led to conflict in its implementation between the administration and key legislative negotiator Sen. Joe Manchin. It was written to advance climate goals, but also, as Manchin intended it, to increase energy security and nearshore manufacturing. To the extent that the second goal raises the costs of solar panels, EVs, and other clean technologies, it has been in conflict with the first goal.
RUNDOWN
New York Times The Last Coal-Fired Power Plants in New England Are to Close
Bloomberg UBS Banker’s Frustration Exposes Cracks in World of Climate Finance
Washington Post Indoor farms are remaking the produce market — at a cost to the planet