Big oil and gas companies appear to be divided over their stand on the Trump administration’s move to roll back Obama administration regulations on methane. The administration’s move on Thursday drew response for and against as Seeking Alpha, an investment analyst noted.
Exxon Mobil reiterates support for the direct regulation of methane emissions for new and existing oil and gas facilities, following the Trump administration’s move to roll back regulations on methane.
“We urge EPA to retain the main features of the existing methane rule,” writes XOM Upstream executive Staale Gjervik, adding “full industry participation is required to maximize the benefits to society.”
The EPA action has divided the energy industry, with large companies saying restrictions are crucial to curtail leaks of the greenhouse gas and smaller producers calling them too costly.
Big Oil names including XOM, Shell and BP have made big bets on producing and selling natural gas, and emissions of methane – the primary component of natural gas – undermine their sales pitch that gas is a cleaner fossil fuel.
But many independent producers, such as Continental Resources CEO Harold Hamm, oppose U.S. methane regulations, saying the industry already is taking voluntary actions and the costs of federal mandates would weigh heavily on smaller and midsize producers.
The cost of the rolled back Obama-era regulations would be especially onerous for smaller companies, the International Petroleum Association of America says; an average, low-producing natural gas well in Pennsylvania might earn only $9/day after expenses, but the IPAA estimates the regulatory cost for such a well could be as much as $10/day.
But in the U.S. alone, methane that leaks or is released from oil and gas operations annually is equivalent to the greenhouse gas emissions of more than 69M cars, according to a recent WSJ analysis.