EPA says methane rule rollback will cut oil prices by 11 cents

The Environmental Protection Agency announced on Tuesday that its proposed changes to methane emissions rules would reduce U.S. crude oil prices by 11 cents per barrel in 2027. President Donald Trump and EPA Administrator Lee Zeldin unveiled the plan in Lubbock, Texas, aiming to lower regulatory costs and boost domestic energy production. Zeldin stated that when owners and operators can produce, America benefits with lower prices.

The agency’s economic modeling projects that the policy would increase domestic oil production by 0.09 percent. That increase equates to roughly one extra barrel for every 1,000 the U.S. would otherwise produce. The EPA estimates the changes would save the U.S. economy about $45 billion from 2027 through 2050. Most of that figure, approximately $42 billion, comes from lower compliance costs for operators.

However, the agency also expects operators to capture less gas for sale or use. This shift would result in about $4.2 billion in lost revenue, a figure already factored into the compliance savings estimate. The proposal would also lead to an additional 60 million short tons of methane emissions over the same 2027 to 2050 period.

Baden Moore, an energy research analyst at CLSA, noted that uncertainty over implementation and the policy’s durability across administrations could limit producers’ investment decisions. He told CNBC that these factors limit the upside to current production rates in the near term. Moore anticipates the policy will affect only a small portion of the U.S. shale market because many wells are already commercially viable at current prices.

The proposal considers lighter methane requirements based on well site production levels or extraction methods. It would scrap the Super Emitter Program, which uses third-party monitors to identify major releases. Operators could instead manage associated gas through flaring that destroys 95 percent of the methane. According to the International Energy Agency, marginal wells account for about 80 percent of active U.S. wells but less than 10 percent of production.

The proposal is not yet final and remains subject to the rulemaking process. This includes a public-comment period and further EPA review before any changes can be implemented. The move comes as the Trump administration also moves to ease sanctions on Russian diesel exports to address fuel prices. Energy Secretary Chris Wright told CNBC on Tuesday that additional shipments could be permitted depending on Moscow’s actions.