Oil & Gas

Subscribe to Oil & Gas via RSS

By Jörn Kassow and Patrick Braasch

At the G20 Summit in Hangzhou, China, in September 2016, the G20 leaders reaffirmed their commitment to rationalise and phase-out inefficient fossil fuel subsidies that encourage wasteful consumption over the medium term, while recognising the need to support the poor. This is not exactly new – similar commitments have been included in past summit communiques. Expectations are growing, however, that a time limit for ending fossil fuel subsidies will be agreed at the 2017 Summit in Hamburg, Germany.

By Paul Davies and Simon Tysoe

Sustained investment in offshore platforms and production installations has been critical in securing the UK’s energy supply. Despite ongoing oil price volatility, in 2016 and 2017 £3-4 billion of capital per year is envisioned for new developments in the UK continental shelf (“UKCS”). Such developments are expected to sustain production for decades, not only to meet rising energy demand, but to maximise significant project investment. Falling industry costs and improvements in efficiency have led to a decline in the operating costs of oil and gas installations – the Oil & Gas UK’s Economic Report 2015 anticipates expenditure on existing assets to drop to £2.1 billion by the end of 2016, representing a 22% decrease from the previous year.

Yet, notwithstanding cost optimisation, as oil and gas fields near depletion and therefore become unproductive, installations need to be retired or recycled. Removal requires substantial investment – expenditures of £2 billion are forecast by 2018, up from £1 billion in 2014 – to undertake the decommissioning of approximately 50 fields by 2018. More significantly, current mid-point estimates for UKCS decommissioning to 2050 is £47 billion, with a substantial portion of this being funded through tax-relief. Consequently, on 30 June 2016, the Oil and Gas Authority (OGA) published the UK’s Oil and Gas Decommissioning Strategy. The OGA, tasked with maximising economic recovery of the oil and gas lifecycle, will also issue accompanying delivery programmes to detail how decommissioning will be achieved.

By Robert Wyman, Claudia O’Brien, Michael Carroll, Alicia Handy, Andrew Westgate and Samantha Seikkula

On May 12, 2016, the US Environmental Protection Agency (EPA) released its final rules aimed at reducing methane emissions from the oil and gas industry, in support of the Obama Administration’s efforts to cut methane emissions from the oil and gas sector by 40 to 45 percent from 2012 levels by 2025. EPA introduced a suite of rules including New Source Performance Standards (NSPS) that will curb emissions of methane, smog-forming volatile organic compounds (VOCs) and hazardous air pollutants such as benzene from new oil and gas sources. The final NSPS will achieve greater methane reductions than estimated at proposal due to changes made in response to public comments. EPA also finalized the Source Determination Rule, which clarifies how EPA intends to aggregate onshore oil and natural gas emission sources for purposes of its Title V, Prevention of Significant Deterioration (PSD), and New Source Review (NSR) permitting programs.

We previously discussed discussed EPA’s draft proposal. This post summarizes the final NSPS and describes key revisions from the proposal, as well as the Source Determination Rule and information requests that were released.

Summary of NSPS

The final NSPS builds on EPA’s 2012 rules to curb emissions from new, reconstructed and modified processes and equipment, along with reducing VOC emissions from sources not originally covered