Today’s Key Takeaways: Methane rule is dead. Tariffs hit Canadian oil industry. Alaska’s mining industry expresses optimism at Juneau forum. AK legislators go back to oil industry well.
OIL:
Biden’s Methane Rule Is Dead
Charles Kennedy, OilPrice.com, March 2, 2025
- The U.S. Senate voted 52-47 to repeal the methane fee for oil and gas producers.
- Major oil companies previously supported the rule since they could afford compliance, but smaller producers opposed it due to financial burdens.
- The repeal may complicate U.S.-EU energy trade, as the EU’s methane emissions regulations could make U.S. LNG exports non-compliant.
Oil and gas producers in the United States will no longer be obliged to pay a fee for the methane they emit in the course of their operations after Congress voted to axe one of the most celebrated moves of the Biden administration in the energy space.
With a 52-47 vote, senators repealed the fee, and now all that’s left is for President Trump to sign it, likely adding more fuel to environmentalist organizations’ frustrations with the new federal government.
The offensive against methane began early in President Biden’s term. Widely considered a much more potent greenhouse gas than carbon dioxide even though its effect is much more short-lived, methane got into the crosshairs of the federal government as a target in its transition policies. Oil and gas companies were the natural prime target for climate regulation in this respect, and the regulation promptly came, mandating financial penalties for so-called methane leaks.
The Environmental Protection Agency acted as the executive body in the matter, setting methane emission limits and penalizing any exceeding of these limits. The oil and gas industry, perhaps surprisingly, was on board with this. The American Petroleum Institute voiced its support for the methane rule, with its chief executive saying that, “This is a new position for API, but we think given where the industry is at this time and the continued importance of reducing methane, it was critical we update this position as the administration changes.”
GAS:
Trump’s tariffs threat hits Canada’s oil and gas drillers
Amanda Stephenson, Reuters, March 2, 2025
- Canada sends 90% of oil exports to US refiners
- Canadian drilling sector still not recovered from decade of job losses
- Retaliatory tariffs would raise cost of drilling inputs
CALGARY, March 3 (Reuters) – Canada’s oilfield drilling and services sector is already showing signs of slowing due to U.S. President Donald Trump’s threatened tariffs, triggering fears that an expected industry rebound could stall if such levies go forward.
Employment levels in the Canadian drilling sector collapsed between 2014 and 2020 due to sustained low oil prices and reduced production during the COVID-19 pandemic. Activity has improved since 2020, but Trump’s threat to impose a 10% tariff on the 4 million barrels per day (bpd) of Canadian crude imported into the U.S. could upend that, industry representatives said.
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MINING:
Mining industry optimistic about Trump administration’s energy agenda in Alaska
Claire Larson, KTOO, February 27, 2025
Mining leaders from across the state had an optimistic outlook at the third annual Juneau Mining Forum on Tuesday.
Attendees said the next four years of Trump administration policy could mark a turning point for the acceleration of resource development in Alaska.
It’s an opportunity that Hecla Greens Creek Mine on Admiralty Island plans to take full advantage of, says Mike Satre, Hecla’s director of government affairs.
“There’s great opportunity for our industry right now. There’s great opportunity here in Alaska,” he said. “We have the resources that the nation and that the world needs. We have the opportunity with this administration to hopefully move a bunch of projects forward.”
Satre was a panelist for a federal issues discussion that considered how the new administration could change the U.S. mining industry’s permitting process to streamline development.
In his first day in office, Trump issued executive orders that called for more drilling, logging and mining in Alaska. An order called “Unleashing Alaska’s Extraordinary Resource Potential” aims to undo most of the Biden Administration’s work to limit resource development in the state.
Greens Creek is the largest silver mine in the nation and pays the most property tax in Juneau.
POLITICS:
Alaska Senate leaders propose reducing oil tax credits as deficits loom
Eric Stone, Alaska Public Media, February 26, 2025
The Trans-Alaska Pipeline winds through the landscape, seen here at pipeline mile 709.7 along the Richardson Highway south of Copper Center, Alaska on August 13, 2024.
As the state faces an estimated half-billion-dollar deficit between this year and the next, Alaska Senate leaders are reviving options for raising revenue.
One controversial bill would reduce a state North Slope oil production tax credit by $3 per barrel. It would also prevent oil producers from claiming more in production tax credits than they spend on capital investment in a given year.
Oil tax credit reform has long been a priority for Sen. Bill Wielechowski, D-Anchorage, who pitched the bills during a news conference on Tuesday. The tax changes could raise hundreds of millions of dollars per year, Department of Revenue officials told the Senate Finance Committee in 2023.
“We want to get this on the table and start to have a debate about how we’re going to close this $536 million deficit,” he said.
Wielechowski argued they’d likely have little impact on the state’s economy, referencing a 2023 presentation from the consulting firm GaffneyCline that found a similar bill would “likely not lead to material reduction of existing production.” Oil and gas companies, including ConocoPhillips, ExxonMobil and Hilcorp, however, told the Senate panel at the time that the tax changes would make the state a less attractive place to invest.
That tax credit proposal was one of several measures proposed by Dunleavy’s then-Department of Revenue commissioner, Lucinda Mahoney, to a working group of legislators in 2021. Mahoney introduced it as one of the options “the governor would support.”
But on Wednesday, Dunleavy’s communications director, Jeff Turner, said in an email that the former commissioner “misspoke.”
“The governor’s position on taxes has always been consistent. He is not favorably disposed to taxes,” Turner said, adding in a subsequent email that it’s the governor’s policy not to comment on specific bills until they reach his desk.
Some minority Republicans in the Senate also came out against the bill, including Sen. Shelley Hughes, R-Palmer.
“I think we should be increasing our tax base rather than increasing taxes, and that will grow our economy,” Hughes said. “With the man in the White House right now and the opportunity for new projects, I think it’s sending a very bad message.”