American Oil and Gas Reporter - December 2024 - 26

the election results dim the prospects for
a permitting bill by senators Joe Manchin,
I-W.V., and John Barrasso, R-Wy.
" The session is likely to be fairly
short, " Naatz predicts. " People often say
a lame-duck session is going to be really
vigorous, but it does not usually play out
that way. Why would the party that is
about to enjoy a better advantage in the
next Congress cut a deal in this one? "
Even if the GOP's standing in the
219th U.S. Congress will be better than
in the 218th, Naatz acknowledges that a
stand-alone bill to renovate the federal
permitting system may require 60 votes
to advance on the Senate floor. However,
he notes, attaching such measures to a
budget reconciliation package or other
must-pass legislation can allow them to
skirt a filibuster.
" Bills like that only need 50 Senate
votes to pass, " he observes. " Meanwhile,
something like the Barrasso-Manchin
bill would face real time constraints during
the lame duck. There would be no
time for a real conference committee to
create a stronger bill that could pass
both chambers. "
The Defense Authorization Act is another
possibility for such legislation, as
well as other provisions pertinent to the
industry, Naatz adds. He says he has encountered
rumors that the lame duck session
may provide occasion to repeal the
methane tax found in the Inflation Reduction
Act, but that may be a long shot,
he suggests.
" Defense authorizers have pushed
back hard on including too many riders,
because it is an important bill and not a
Christmas tree, " he emphasizes. " Getting
rid of the methane tax during the current
Congress will be hard because many
Democrats are going to resist, but you
never can tell. "
The Biden administration completed
its plans for that methane tax when the
U.S. Environmental Protection Agency
finalized its waste emissions charge on
Nov. 12 (see accompanying story).
Mending Methane
Independent oil and gas producers
have plenty of priorities they hope to see
addressed once the presidency changes
hands on Jan. 20, Longanecker indicates,
but adjusting EPA's OOOOb and OOOOc
emissions standards for oil and gas wells
is at or near the top. Some of those requirements
are not scheduled to take
effect until spring 2029, but if they are
not rewritten, he warns they are likely to
exact a particularly steep toll on small
producers.
" We estimate that cost at $550 million
a year, which equates to $0.22 a barrel of
oil equivalent, but marginal operators
may be looking at added costs as high as
$10 per boe, " he details. " We can conservatively
say that OOOOc will result
in about 55,000-60,000 marginal wells
becoming plugging and abandonment
candidates because the economics no
longer make sense. Operators will have
to shut in those wells, which will create
an accelerated plugging and abandonment
26 THE AMERICAN OIL & GAS REPORTER
American Oil and Gas Reporter - December 2024

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