PROMO Energy - Oil Pump Rig - iStock - Karina Movsesyan

Oil and gas industry lauds EPA decision to reverse course in Permian Basin

© iStock - Karina Movsesyan
Bethany Blankley

(The Center Square) – The Biden administration has backed down from a plan to impose what critics said were “draconian regulations” in the Permian Basin of west Texas and southeastern New Mexico, a move lauded by the oil and gas industry and Gov. Greg Abbott.

The Biden Administration Thursday released its Fall 2022 Unified Agenda of Regulatory and Deregulatory Actions, which includes planned rule-makings and federal action. In it, the Environmental Protection Agency omitted its plan to impose "discretionary redesignation" of air quality conditions in the Permian Basin.

In June, the EPA had announced it was reversing a 2017 decision by designating regions of the Permian Basin as nonattainment areas, meaning they don’t comply with 2015 Ozone National Ambient Air Quality Standards.

In response, Abbott sent letters to the president first arguing in June that the EPA plan “could lead to skyrocketing prices at the pump by reducing production, increase the cost of that production, or do both.” In August, he argued the EPA’s plan to attack Texas production” was “based on illogical and flawed grounds.”

PROMO Energy - Oil Gas Pipeline Refinery - iStock - lagereek

© iStock - lagereek

The president didn’t respond. Instead, the EPA said if it decided to do anything it would notify Abbott and solicit state input.

Four months later, the administration omitted the EPA policy that was quietly released late Wednesday, denoting it as “inactive,” meaning it wouldn’t be finalized in the next six to 12 months.

The EPA confirmed in an email to Bloomberg News that its potential Permian Basin designation was’t active but “could be revived later.”

If the plan had gone forward, Abbott argues, it would “result in draconian regulations that would directly interfere with 40 percent of all oil produced in the United States.”

"The Permian Basin is the crown jewel of Texas' mighty oil and gas industry, and the State of Texas will do whatever it takes to protect its production and the hundreds of thousands of good-paying energy jobs in our state," the governor said in a statement.

"While it is encouraging news that the Biden Administration has backed down on this disastrous plan,” he added, “Texas remains ready to fight any job-killing attacks on our critical oil and gas industry."

PROMO Energy - Natural Gas Flame Stove Burner - iStock - FotoCuisinette

© iStock - FotoCuisinette

Todd Staples, president of the Texas Oil & Gas Association, said, the EPA’s decision was the “correct one.”

"The wide-open spaces of West Texas and Eastern New Mexico are home to the oil and natural gas that fuel our economy and enhance modern life,” he said. “Carbon dioxide, methane, and other related emissions have been declining substantially over the last few years and operators are focused on continued good environmental stewardship.”

He also points out that “oil produced in the Permian Basin is among the cleanest in the world according to its lower carbon intensity.”

“Excessive government regulation is unnecessary and stifles affordable and reliable energy supplies,” he said, noting that the oil and natural gas industry remained committed “to making smart choices to improve air quality in this region and deliver the resources that are indispensable to our state, nation, and world."

PROMO 64J1 Energy - Gasoline Pump Oil - iStock - jovannig

© iStock - jovannig

Ed Longanecker, president of the Texas Independent Producers and Royalty Owners Association, also lauded the move. He also pointed out that “over the past several years, our industry has made monumental steps in reducing air pollutants, and oil and gas producers are already taking the steps needed to improve air quality.”

A recent Texans for Natural Gas study found that between 2011 and 2021, methane emissions' intensity fell by more than 76 percent in the Permian Basin.

“If the administration and EPA want to craft successful policy moving forward, they should be partnering with private industry in a collaborative manner to help advance emissions reduction efforts, not forcing them through unneeded and onerous regulatory mandates,” Longanecker added.

Thure Cannon, president of the Texas Pipeline Association, told The Center Square the decision “acknowledged the importance of the oil and natural gas to Texas, the nation and the world.” He also said the association hoped “the Administration will make other favorable decisions that benefit this industry, which is so vital to a strong American energy policy and our national security.”

PROMO Energy - Oil Rig Gas Well - iStock - ssuaphoto

© iStock - ssuaphoto

The Permian Basin produces roughly 5.2 million barrels of oil a day, which translates to roughly 95 million gallons of gasoline a day.

The Texas oil and gas industry directly employs over 422,000 Texans and supports 1.37 million Texas jobs. Industry job gains have helped Texas lead the nation in job growth and in U.S energy production.

In 2021, Texas crude oil accounted for 43 percent of all U.S. production and 25 percent of all marketed natural gas production.

In the first half of 2022, the U.S. became the world’s largest LNG exporter, the EIA reports, led by Texas.