Surging Natural Gas Prices

A flare burns natural gas at an oil well Aug. 26 near Watford City, N.D. A proposed new Clean Air Act rule would require natural gas producers to significantly curtail the release of methane, a greenhouse gas many times more potent than carbon dioxide, the Environmental Protection Agency (EPA) said Tuesday. AP Photo

Casper Star-Tribune

CASPER – After an Obama-era methane rule was repealed by the Trump administration, reinstated in court and then struck down for good last October, the federal government is once again tightening methane regulations.

A proposed new Clean Air Act rule would require natural gas producers to significantly curtail the release of methane, a greenhouse gas many times more potent than carbon dioxide, the Environmental Protection Agency (EPA) said Tuesday.

The rule comes a day after the Bureau of Land Management recommended that 195 tracts of Wyoming land be made available for oil and gas leasing – and a day after President Joe Biden pledged at the United Nations climate summit that the U.S. would halve its carbon emissions by 2030.

Unlike past standards, the rule would apply not only to new construction, but to existing methane sources.

It would tighten producers’ emissions allowances by eliminating venting of natural gas and instituting new performance standards for transmission and storage infrastructure, and would strengthen the monitoring, detection and repair of methane leaks.

Reception to the rule has been mixed. Wyoming ranks ninth overall among natural gas-producing states, but it’s home to the biggest share of natural gas production – and associated carbon emissions – located on federal lands.

The conservation-focused Wyoming Outdoor Council and Powder River Basin Resource Council praised the increased federal focus on methane emissions controls, while some industry groups, including the Petroleum Association of Wyoming (PAW), expressed support for “common sense” environmental standards.

PAW has not yet taken a position on the new rule.

“I think there’s more that can certainly be done,” said John Burrows, a conservation advocate at the Wyoming Outdoor Council. “But this is a really positive step, and a really good direction for the industry to go.”

The proposal has also been criticized harshly by advocacy groups on both sides of the methane debate, including the Western Energy Alliance and the Center for Biological Diversity.

Gov. Mark Gordon denounced “the systematic targeting of fossil fuels from Western lands” in a Tuesday statement.

“EPA’s latest announcement to regulate methane for new infrastructure and existing facilities adds yet another level of uncertainty to the operations of Wyoming’s oil and gas industry,” Gordon said. “This is happening just as our industry moves onto more solid footing, with increasing rig counts and the return of jobs in this sector.”

Coal once provided the bulk of state severance taxes, but with coal production continuing to fall, oil now contributes the largest share of severance taxes. Natural gas has also overtaken coal to become the next-highest source of mineral revenue.

During the 2021 fiscal year, 29.8% of severance taxes came from natural gas, compared with 39.5% from oil and 27.4% from coal, according to the October CREG report.

“This is just common sense,” Burrows said. “It’s about doing energy development responsibly, and looking ahead to actually seeing where markets are, and where they’re going.”

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