Trump Administration Aims to Roll Back Methane Emissions Limits at Oil, Gas Production Sites

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Researched by Industrial Info Resources (Sugar Land, Texas)--In a move sure to garner controversy, the Trump administration is aiming to relax limits on methane emissions at oil and gas production sites in the U.S. The proposed rule is subject to a public comment period before being finalized. While the new standards are being welcomed by some, some major oil and gas players say the lower emissions standards could actually harm the industry. Industrial Info is tracking more than $5.8 billion in oil and gas drilling projects at sites throughout the U.S.

Click on the image at right for a breakdown by market region of active drilling projects in the U.S.

The emissions limits as they stand were set in 2016 under the Obama administration. Methane is considered to be a more potent greenhouse than carbon dioxide by scientists. The rollback of the rule is expected to face lawsuits from environmental groups, including the Natural Resources Defense Council. But the move also is facing some pushback from what is perhaps an unexpected area: Big Oil & Gas.

According to Seeking Alpha, among the companies warning against the rollback are Exxon Mobil Corporation (NYSE:XOM) (ExxonMobil) (Irving, Texas) and Royal Dutch Shell (NYSE:RDS-A) (The Hague, Netherlands). The companies argue that a lack of government requirements to limit emissions could undermine the argument that natural gas is a cleaner fuel. In recent years, several U.S. power companies have retired more than a dozen gigawatts of coal-fired power plants and opted for the construction of natural gas-fired, combined-cycle generation. While the trend is easing somewhat, especially as renewables move more to the forefront, Industrial Info is tracking more than $37.9 billion in active, grassroot natural gas-fired projects in the U.S.

In addition, the construction of liquefied natural gas (LNG) production and export plants in the U.S. is increasing the market for U.S. natural gas. According to data from OPIS PointLogic Energy (Houston, Texas), an average of 6 billion cubic feet per day of natural gas was delivered to U.S. LNG facilities in July, representing 7% of total U.S. dry natural gas production. Construction of these facilities is set to increase, and with them the need for increased gas production.

With the advent of horizontal drilling and the rollback of crude oil export limits a few years ago, production of crude oil also is increasing in the U.S., particularly in the Permian Basin of West Texas and New Mexico. The top driller in Texas is ExxonMobil. Earlier this month, the Houston Chronicle reported that the company had applied for 500 drilling permits in Texas this year, with more than 430 for projects in the Permian Basin. Other notable drilling companies in the U.S. include Occidental Petroleum Corporation (NYSE:OXY) (Houston) and EOG Resources Incorporated (NYSE:EOG) (Houston).

Among Occidental's underway drilling programs is its natural gas exploration program in Yoakum County, Texas, near Denver City, which is part of Occidental's larger program in Texas. This particular project involves drilling seven natural gas production wells (four directional and three vertical) at an average depth of 5,800 to 8,300 feet and one vertical recompletion well at 5,900 feet. The program kicked off earlier this summer and is expected to be completed early next year. For more information, see Industrial Info's project report.

ExxonMobil's natural gas subsidiary XTO Energy (Fort Worth, Texas) is underway with its own Texas drilling programs. Among these is a natural gas production program near Jewett, Texas, in Leon County. This program involves drilling four natural gas production wells. Scandrill Incorporated (Tyler, Texas) is the drilling contractor. The program kicked off earlier this year and is expected to wrap up in the fourth quarter. For more information, see Industrial Info's project report.

Among the drilling concentrating on crude oil is Chesapeake Energy Corporation's (NYSE:CHK) (Oklahoma City, Oklahoma) program in Burleson County, Texas. The program involves drilling several wells at depths of 8,000 to 9,000 feet. Patterson UTI Energy Incorporated (Houston) is the contractor. For more information, see Industrial Info's project reports on the program portions near Cook's Point Metering Station, Deanville Metering Station, Snook Metering Station and Caldwell Metering Station.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.