Will Trump Policies Slow Methane Emissions Cuts in the Permian?

NASA METHANE SATTELITE PHOTO

By Tsvetana Paraskova - Dec 23, 2024,

Methane emissions in the Permian Basin fell significantly in the past year, but the incoming Trump Administration's policies threaten to reverse this progress.

Trump's plans include rolling back Biden-era regulations on tailpipe emissions, fuel economy standards, and electric vehicle incentives.

Despite the potential policy changes, some analysts believe that energy companies will continue to reduce emissions due to commitments made to shareholders and investors.



Producers in the Permian basin, America’s top oil producing region, have made a lot of progress in reducing methane emissions, a recent report suggests, but the incoming Trump Administration could undo some of that progress, environmentalists warn.

The Biden Administration has enacted rules on reducing emissions from oil and gas operations, including a recently finalized methane fee that has been opposed by the industry.

Last year, emissions from the Permian fell by 26%, according to a recent study by S&P Global and Insight M Inc. Methane intensity declined even more, by over 30%, as absolute emission volumes fell while Permian oil and gas production continued to rise, the study found.

The results are encouraging, but with incoming President Donald Trump some progress could be undone as the President-elect has vowed to roll back Biden-era rules burdening the oil and gas industry, climate advocates say.

Trump’s transition team is said to be preparing radical changes to U.S. policy toward electric vehicles and tailpipe emissions. These could include axing the EV incentives and the government mandate for federal EV fleets, and rolling back the Biden Administration’s rules on tailpipe emissions and fuel economy standards, Reuters reported earlier this month, citing a draft document it has seen.

In a sign of what the energy industry can expect, Trump last month picked a shale boss, Chris Wright, chief executive of Liberty Energy, as his nomination to lead the Department of Energy.

However, analysts say that the companies are now unlikely to swerve from the path of cutting emissions as they continue to promote their efforts in producing more oil and gas with fewer emissions.

“They’ve made commitments to their shareholders, they’ve set a plan in place, they’ve allocated capital,” Kevin Birn, an analyst at S&P, told the Financial Times, commenting on the findings of the study on the Permian methane emissions trends.

By Tsvetana Paraskova for Oilprice.com