Analysis by Energy Workforce SVP Government Affairs & Counsel Tim Tarpley
Despite the fact that the Biden Administration continues to be under increasing pressure to take action to lower energy prices in the United States, the Environmental Protection Agency (EPA) is apparently considering triggering tougher anti-smog requirements for the Permian Basin. Such an action could have significant impacts on the ability to drill and conduct other industrial activities in parts of the Permian.
The EPA is weighing labeling parts of the Permian Basin as violating federal air quality standards for ozone. If the designation goes through, certain areas of the Permian would be considered “non-attainment zones.” There are non-attainment zones located all around the country, generally found around areas of high population or significant industrial activity.
This designation would set in motion a process that would ultimately force state regulators to develop plans for cracking down on air pollution that can cause smog. The move would spur the state of Texas to be forced to enact new permitting requirements and increase scrutiny of drilling operations and other industrial activities within the region. In this scenario, Texas would have three years to develop a plan for lowering ozone levels in the non-attainment zone. If the state does not take actions sufficient for the EPA, they could eventually lose access to certain federal funds and face other penalties.
If the EPA chooses to take this action, it will be closely watched by many as it has the potential to slow down drilling activity in the Permian. The region is the largest production area for oil and natural gas in the United States. As the country, and the world, suffers from a demand crunch and high energy prices, any actions that increase the cost of production or curtail the ability to produce in the basin could have significant economic effects.
Energy Workforce will continue to work with our allies at the federal and state level to oppose this action and keep our membership informed about potential implications moving forward.
If you would like to get involved with Energy Workforce advocacy efforts or the Government Affairs Committee, contact SVP Government Affairs Tim Tarpley.
Tim Tarpley, SVP Government Affairs & Counsel, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.