The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Energy (DOE) released an $850 million Funding Opportunity Announcement (FOA) to reduce emissions on June 21, 2024. of methane from oil and natural gas production and associated facilities. These funds were made available under the Inflation Reduction Act and applications must be submitted by 5 pm Eastern Time on August 26, 2024.
Areas of interest
There are three Areas of Interest (AOI) according to the FOA:
IOA 1
The three subsections of this AOI focus on 1) existing marginal conventional wells (MCWs), 2) small operators (defined as an entity generating revenues of less than $40 million per year), and 3) MCWs/small operators in tribal lands.
For each of these subsections, EPA and DOE seek to fund a single lead organization to develop and implement a program that facilitates the purchase and distribution of commercially available, โoff-the-shelfโ methane emissions mitigation technologies. These technologies are intended to support effective emissions reductions from MCWs, small operators, and MCWs/small operators on tribal lands.
Each lead organization will be required to develop a work plan that details sources of emissions at well sites and associated infrastructure, along with strategies to address and reduce methane emissions, among other requirements listed in the FOA.
IOA 2
There are also three subsections in this AOI, this time focused on the deployment of new methane emissions reduction solutions: 1) field deployment of methane reduction technologies from engines and compressors, 2) field deployment of methane reduction technologies gas flaring and 3) deployment of field emissions. reduction technologies in oil and gas production facilities.
For each of these subsections, EPA and DOE are seeking solutions that begin at Technology Readiness Level (TRL) 6 or 7 and reach TRL 8 by the end of the project. TRLs are defined in Appendix D of the FOA.
Additionally, project teams under this AOI must include a company that intends to commercialize the technology, industrial partners, and well locations or field testing facilities, among other FOA requirements.
IOA 3
This AOI focuses on methane monitoring solutions and has two subsections: 1) improving access to monitoring data for impacted communities and 2) regional characterization of methane emissions.
The goal of AOI 3 is to accelerate the deployment of methane measurement and monitoring technologies.
Project teams under AOI 3 will include, among others, technology solutions providers, oil and natural gas operators, and disadvantaged communities. Applicants must include a work plan with an explanation of the emissions sources they plan to monitor and their respective impact, among other FOA requirements.
EPA and DOE provided the following table for each of the AOIs and subsections, with the projected number of awards and projected funding award amounts.
|
AOI number |
AOI Title |
Expected number of awards |
Minimum anticipated award size for any individual award (federal share) |
Maximum anticipated award size for any individual award (federal share) |
Total anticipated federal funding available for all grants |
Maximum planned performance period (completion date no later than 09/30/2028) |
|
1a |
Reducing methane emissions from marginal conventional wells |
1 |
$299 million |
$300 million |
$300 million |
~44 months |
|
1 B |
Reducing methane emissions from small operators' wells and other oil and natural gas assets |
1 |
$209 million |
$210 million |
$210 million |
~44 months |
|
1 cup |
Reducing methane emissions from marginal conventional wells and oil and gas assets on tribal lands |
1 |
$49 million |
$50 million |
$50 million |
~44 months |
|
2a |
Field implementation of methane reduction technologies in engines and compressors |
Up to 10 |
11.5 million dollars |
$6 million |
$60 million |
~44 months |
|
2b |
Field implementation of gas flaring reduction technologies |
Up to 10 |
1.5 million dollars |
$6 million |
$60 million |
~44 months |
|
2 C |
Field Deployment of Emission Reduction Technologies at Oil and Gas Production Facilities |
Up to 6 |
$1 million |
$5 million |
$30 million |
~44 months |
|
3a |
Improve access to monitoring data for affected communities |
Up to 4 |
$8 million |
$10 million |
$40 million |
~44 months |
|
3b |
Regional Characterization of Methane Emissions |
Up to 5 |
$18 million |
$20 million |
$100 million |
~44 months |
More information
For more information or questions, please contact the authors or another member of Holland & Knight's. Energy and Natural Resources Group.
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