U.S. plans to spend $700 million to reduce methane emissions from oil, gas sector

World Oil Staff July 24, 2023

(WO) — The U.S. Environmental Protection Agency (EPA) and Department of Energy said on Monday that the U.S. government will allocate up to $700 million in financing to track and lower methane emissions from the oil and gas industry, with grants to states accounting for half of the total.

According to the EPA, the financing would be backed by technical support to help businesses reduce greenhouse gas emissions from leaks and routine operations.

The goal of this funding is to help reduce inefficiencies of U.S. oil and gas operations, create new jobs in energy communities, and realize near-term emission reductions, the agencies said. These funding opportunities are made possible by the Inflation Reduction Act.

“Methane’s potency as a greenhouse gas makes targeted emissions reduction efforts essential to slow the rapid rate of climate change,” said Brad Crabtree, assistant secretary of Fossil Energy and Carbon Management. “These programs will help states and industry to accelerate methane monitoring and mitigation efforts, which will increase efficiency and reduce costs for oil and gas producers, while providing long lasting climate and health benefits to communities across the nation.”

As described in the notice of intent, EPA and DOE will provide up to $350 million in formula funding to eligible states to assist industry to voluntarily identify and permanently reduce methane emissions from low-producing (marginal) conventional wells. These investments are expected to improve the economic competitiveness of small and medium-sized producers while reducing associated harmful air pollution, mitigating health effects in nearby communities, and creating jobs in energy communities.

States also will be able to use a portion of their award for environmental restoration and to invest in their monitoring capacity for low-producing conventional wells, which will improve their ability to identify sources of methane emissions and to effectively prioritize their mitigation. NETL plans to issue the funding opportunity announcement later this summer.

Following this non-competitive solicitation, EPA and DOE intend to offer one or more additional competitive solicitations to monitor and mitigate methane emissions from the oil and gas sector, which will be available to a broader range of applicants. These subsequent funding opportunities are expected to advance the deployment of technologies and practices to monitor and reduce emissions of methane and other greenhouse gases. A separate financial assistance program for Tribal governments is also expected to be offered. 

In addition to funding opportunities, through this collaboration, EPA and DOE will provide technical assistance to help states, industry, and other partners implement cost-effective solutions that reduce methane leak emissions. The agencies will support small and medium-sized producers that often lack the capital and expertise of the larger oil and gas companies and will work with partners to implement and prioritize best practices and mitigation decision-support tools across the broader oil and gas sector. This technical assistance will also ensure efforts are fully aligned with the needs of local communities and help inform key decision-makers of mitigation opportunities across states, industry, and other partners.

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