Can advances in methane contamination survive Trump?

Hello, welcome to the Energy Source.

Another chapter in the tariff story may be coming to an end, with the EU and the US locked up in a deal that slaps 15% Levies in European imports.

If Brussels agrees, it could avoid the 30% tariff threatened by President Donald Trump, who made the purchase of US natural gas in Europe at the heart of mitigating the trade war.

Elsewhere, my colleagues Rachel Millard and Gil Primer explain how the UK begged investors who supported the £38 billion nuclear power plant.

Mexican state oil company Pemex will also benefit from the government helping to sell up to $10 billion in debt to bail out. The company owes at least $200 billion to its suppliers, reporting a loss of $300 billion last year.

Today, we look at a report showing significant progress in reducing emissions in the Permian Basin and see if Trump’s “big and beautiful bill” could potentially kneel on progress. – Martha

US advances in methane contamination can be at risk

According to a report by S&P Global, methane strength in oil and gas production in the Permian Basin fell by more than 50% between 2022 and 2024, down to 0.44% per barrel produced.

This means that, in absolute volume terms, the upstream operator reduced the released methane with a CO2 equivalent of 29MN metric tons (MMT).

Methane emissions, usually sourced from leaky pipes and pumping excess gas into the atmosphere, are considered low and cheerful fruit, given the way they tackle the emissions.

Although it warms the atmosphere faster than carbon dioxide, methane is an important ingredient in natural gas, and producers can capture it and sell it.

The loss in revenue from emissions in 2024 was a dent in most of the balance sheet. Historically low gas prices in western Texas were often negative until the Matterhorn Pipeline was operational in October 2024, resulting in a drop in economic value being only 0.002% of total hydrocarbon revenue.

S&P has collaborated with Insight M to gather this information from overhead flights. They covered over 90% of Permian oil and gas production, and all major operators.

These reductions were made for four main reasons. First, for the large US companies, the methane emission reduction process has become a standard part of staff responsibility. Second, companies use remote sensing technology to identify leaks and speed up repairs. Third, companies use clean equipment such as low hemolysis and zero vascular controllers that control and manage gas flow throughout the oil and gas field. Finally, artificial intelligence helps businesses predict and prevent leaks.

“These things are beginning to become part of life,” says Raul Leblanc, vice-president of oil and gas in upper North America at S&P Global. “People on the field know what kind of equipment is broken, where it looks, what the problem is. This took a while, but companies were investing in it.”

I also helped out with support from Joe Biden. The former president said reducing methane emissions in 2021 was “one of the most important things we can do in this crucial decade.” The Environmental Protection Agency under Biden has forced producers to spot and block leaks of existing infrastructure and imposed rules that will strengthen requirements for new facilities. Another methane fee slapped a fine on the contaminants if they exceeded a certain threshold.

Overall, between 1980 and 2023, US methane emissions fell by 22%.

However, environmentalists fear that recent advances in suppressing the emissions of planet-warming gases are now at risk.

Trump’s “Big, Beautiful Bill” delayed the fees charged on methane emissions due to Biden’s Inflation Reduction Act until 2034. The Trump administration has announced a rollback of EPA standards under the Clean Air Act.

“The Trump administration has basically decided to stop methane regulation in a meaningful way,” said Lauren Pagel, policy director at Earthworks, a climate NGO. “It’s devastating to the climate and communities that live near oil and gas fields.”

Pagel also does not focus on the industry’s focus on methane strength to measure its progress (the S&P report above considers strength and absolute volume).

Strength-based methane measurements consider emissions per unit of output, while absolute measurements sum all emissions of the entire production process. Oil and gas climate initiatives, including Exxonmobil, Chevron and BP, have set a target of “less than 0.2%” by 2025.

“In the methane strength target situation, strength can decrease, but it can increase production by 150%,” she said. “So the actual methane is being released into the atmosphere.”

Trump’s attack on methane restrictions follows the loss of Methanesat, a $88 million satellite backed by Google and Jeff Bezos, which disappeared in space. The satellite was launched last year and to monitor methane emissions from the oil and gas industry, but lost power last month, and according to the project, “it could not be recovered.”

But there is room for optimism. Foreign buyer markets such as Europe have their own emissions rules that “support a culture of methane reduction” among large companies.

Much of the momentum towards reducing emissions means that political peaks and valleys should survive within the industry and before recent regulations.

Also, thanks to low gas prices, the value of trapping and selling methane is negligible, reducing detection costs and reducing repair costs.

Finally, the potential costs of EPA penalties have actually discouraged some companies from adopting robust sensing technology. Government dedivange de Dedrisks de-risks is an investment in better detection efforts.

Analysts at Wood Mackenzie say this effect varies between public groups, with more stringent reporting requirements than private groups.

“In public places you’ll be surprised to see the inflection points of progress they’ve made,” said Lydia Walker, an upstream analyst of Wood Mackenzie.

“It could slow progress within private companies where higher releases and more capital are constrained.” (Martha Muir)

Job movements

Lotus Resources has appointed Melissa Roberts as Chief Financial Officer.

The Yü Group has appointed Andy Simpson as Chief Financial Officer.

Jasper Van Den Driest has become CEO of Greener Power Solutions.

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The cost of providing electricity in America’s largest electricity market is reaching record highs due to demand for AI and delays in power plants.

The UN Secretary-General said that as renewable energy costs drop sharply, fossil fuels are “using out the road.”

The energy source has been written and edited by Jamie Smith, Martha Muir, Alexandra White, Christina Shevory, Tom Wilson, Rachel Millard and Malcolm Moore, and is supported by FT’s global team of reporters. Contact us at Energy.source@ft.com and follow us on X at @ftenergy. Check out previous editions of our newsletter here.