US Offers $850 Million in Grants to Address Methane Emissions in the Oil Sector, Reports Reuters

By Valerie Volcovici

WASHINGTON – The U.S. government announced on Friday that competitive bidding has begun for $850 million in grants aimed at assisting small oil and gas producers in monitoring and reducing methane emissions from their operations. This initiative is a significant component of the Biden administration’s strategy to address leaks of this potent greenhouse gas. Bidding will close on August 26.

Significance of the Funding

This funding, available through the Inflation Reduction Act, is intended to help small operators minimize methane emissions and gain access to detection and reduction technologies. Participation is open to a diverse group including industry players, academic institutions, non-governmental organizations, Native American tribes, and various state and local governments.

Background

Smaller, independent U.S. oil and gas operators have expressed strong opposition to the Environmental Protection Agency’s new methane regulations, which target hundreds of thousands of existing sources across the country. Critics argue that these regulations impose a financial strain on low-producing wells, particularly in light of the agency’s proposed methane fee on producers.

Key Statement

EPA Administrator Michael Regan remarked, "These investments from President Biden’s Investing in America agenda will drive the deployment of available and advanced technologies to better understand where methane emissions are coming from. That will help us more effectively reduce harmful pollution, tackle the climate crisis, and create good-paying jobs."

Impact of Oil and Gas Production

Oil and gas production accounts for approximately one-third of the nation’s methane emissions, making it a critical focus for the Biden administration’s climate change efforts. The U.S. is one of over 100 countries committed to reducing methane emissions by 30% by 2030 compared to 2020 levels. A 2022 report indicated that low-producing oil and gas wells, which contribute only 6% of total U.S. production, are responsible for half of the methane emissions from all well sites in the country.