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DOE No Longer Moving Forward with Natural Gas Standard

Analysis by Energy Workforce President Tim Tarpley

Energy Workforce President Tim Tarpley

As discussed last week in this column, Assistant Secretary Brad Crabtree from the Department of Energy’s Office of Fossil Energy and Carbon Management hosted a roundtable at CERAWeek to discuss the possibility of the creation of a natural gas standard. The roundtable included industry, non-governmental organizations and government officials from different countries.

DOE stated that the discussion explored elements of a potential global framework for measurement and monitoring, reporting and verification (MRV) of the greenhouse gas intensity of natural gas across the supply chain, both domestically and internationally. Reports from those in the meeting indicated that many on the industry side had significant concerns about the proposal and there was not an agreement reached as to the benefits outweighing concerns and unintended consequences. 

Shortly after the discussion concluded, the Department of Energy sent out a statement indicating that there were no plans to move forward on the proposal. “The U.S. Department of Energy is not introducing or endorsing any policy measures with respect to the certification of natural gas at this time. However, we will continue to engage with our international partners and stakeholders to forge broader agreement on a measurement and MRV framework needed to help foster continuous reductions in methane and carbon dioxide emissions from natural gas production, transport, and use over time.”

While this initiative appears on hold for now, Energy Workforce will continue to monitor in case it is revived, as such a standard could have significant implications for the production and processes used to produce natural gas in the United States.  

Texas House Legislation Could Encourage Increased Production from Existing Wells

HB 2056 and SB 1407 have been introduced in this year’s Texas legislative session and may have a chance of passing. As the amount of oil and gas produced from wells declines rapidly over time, many of the wells that were stimulated a decade or two ago in Texas are now in need of restimulation. Under current Texas law, when a well is restimulated, a severance tax would be owed by the operator on the project. This legislation would provide a temporary exemption of oil and gas severance taxes for five years or until the tax exemption equals 50% of the restimulation costs incurred for the well, whichever comes first.  

The legislation includes a provision that provides a bonus for the incentive up to 75% of the costs of restimulation if the operator uses hydraulic fracturing pumps powered exclusively by electricity or natural gas. 

This legislation could spur significant new restimulation activity in Texas. It is estimated that 70% of the active well population in Texas are low producing marginal wells. In fact, 75% of the total well population is either inactive or marginal in production. Energy Workforce will continue to monitor and support this legislation.  

House Energy Package Details Begin to Solidify

House Republicans are moving forward with introduction of a large energy package this week. Introduced by Majority Leader Steve Scalise, the bill is expected to head to the House floor as soon as the week of March 27. The package is a grab bag of longtime Republican favored energy provisions and will likely pass along party lines. The full package will almost certainly not see action in the Senate, however.

The biggest curve ball is likely whether the package gets any support from pro-energy Democrats and whether the permitting reform section (the BUILDER Act) introduced by Rep. Garret Graves (R-LA-06) can gain any traction on the Senate side. In order for permitting reform to have a shot this Congress, there will need to be an effort to combine elements of the BUILDER Act with the Senate package led by Senator Joe Manchin (D-WVA). 

The Lower Cost Energy Act is a compilation bill including the work of three House Committees, the House Natural Resources Committee, the Transportation & Infrastructure Committee and the House Energy and Commerce Committee. The package includes the following legislation:

House Natural Resources Committee

Transportation & Infrastructure Committee

House Energy & Commerce Committee

Tim Tarpley, Energy Workforce President, 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.



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