Biden Administration Offers $350MM in Grants to Curb Methane from Wells

The Biden administration is offering up to $350 million in grants to reduce methane emissions from oil and gas wells through well plugging and monitoring.

The funding is a rollout of the Methane Emissions Reduction Program, created under Section 60113 of the Inflation Reduction Act (IRA) with $1.55 billion in funding from 2022 to 2028. President Joe Biden signed the law August 2022 to help ensure both energy security and climate resilience.

The amount will be channeled "to eligible States for the purpose of mitigating methane emissions from marginal conventional wells (MCWs) by providing financial assistance to operators/well owners to voluntarily and permanently plug and abandon MCWs (including elements of environmental restoration required to comply with applicable State or Federal plugging and abandonment standards and regulations) on non-Federal lands as well as monitor methane emissions from MCWs", read the official grant description on Grants.gov.

"Methane is a much more potent greenhouse gas than carbon dioxide, so it’s crucial that we work closely with states and industry to develop solutions that will cut emissions at their source”, Energy Secretary Jennifer M Granholm said in a statement.

"Thanks to President Biden’s Investing in America agenda, DOE’s [Department of Energy] partnership with EPA [Environmental Protection Agency] will bolster our national efforts to monitor and mitigate methane emissions from the oil and gas sector – our largest source of industrial methane – while helping revitalize energy communities and delivering long-lasting health and environmental benefits across the country."

The offer is part of a series of funding under the IRA "that will target monitoring and reduction of methane emissions from the oil and gas sector ", the DOE said in a press release last week, calling methane "one of the biggest drivers of the climate crisis".

Besides the DOE, the non-competitive grant involves the EPA, under an interagency deal that also commits the two to provide "technical assistance to help companies monitor and reduce methane emissions from leaks and daily operations", the EPA said July 24 in a news release announcing the agreement and a notice of intent to make available the $350 million.

The grant would be allotted to state governments with a maximum award of $150 million, according to the notice of intent.

"These investments [the $350 million] are expected to improve the economic competitiveness of small and medium-sized producers while reducing associated harmful air pollution, mitigating health effects in nearby communities, and creating jobs in energy communities", the DOE announcement last week said.

"States also will be able to use a portion of their award for environmental restoration and to invest in their monitoring capacity for low-producing conventional wells, which will improve their ability to identify sources of methane emissions and to effectively prioritize their mitigation".

More Grants

The DOE said competitive grant packages to address methane emissions would follow. These competitive grants for methane monitoring and mitigation would be opened to a wider range of recipients, according to the EPA announcement.

"A separate financial assistance program for Tribal governments is also expected to be offered", the EPA announcement added.

Technical Aid

Under the technical aid aspect of the DOE-EPA agreement, the agencies target "small and medium-sized producers that often lack the capital and expertise of the larger oil and gas companies and will work with partners to implement and prioritize best practices and mitigation decision-support tools across the broader oil and gas sector", the EPA said in the July 24 media release.

"This technical assistance will also ensure efforts are fully aligned with the needs of local communities and help inform key decision-makers of mitigation opportunities across states, industry, and other partners", the EPA announcement said.

The DOE said in the announcement last week, "EPA and DOE are collaborating alongside other members of the new White House Methane Task Force, which is advancing a whole-of-government approach to proactive methane leak detection and data transparency and supporting state and local efforts to mitigate and enforce methane emissions regulations".

"Today’s actions by EPA and DOE accelerate execution of the U.S. Methane Emissions Reduction Action Plan, building on over 80 Administration actions taken in less than a year since the Plan launched in November 2022", the DOE added.

State governments have until September 30 to apply for the grant.

To contact the author, email jov.onsat@rigzone.com