All oil and gas wells pollute. But some companies, like Hilcorp, pollute more than others. Hilcorp is, pound for pound, the most polluting oil and gas company in the U.S. As the EPA moves to finalize rules to reduce methane pollution from oil and gas, you would think targeting companies like Hilcorp would be top priority, however this is not the case. In fact our investigation suggests the draft rules introduced by the EPA in November 2021 would afford many of Hilcorp’s wells exemptions from regular leak detection—in other words: a free pass to pollute. Let’s take a deeper look to understand how…
But first more about Hilcorp:
According to their website, “Hilcorp is the largest privately held independent exploration & production company in the United States.” According to Rextag’s Energy Datalink, Hilcorp currently operates nearly 24,000 wells across the continental US with additional exploration off the coast of Alaska.
Hilcorp has built their oil and gas empire with money from the Carlyle Group, a private equity firm that has a history of using its influence to help preserve loopholes that benefit the company. The Carlyle Group’s co-founder, David Rubenstein (one of Private Equity Stakeholder Projects Dirty Dozen) praised “Hilcorp’s superior ability to reduce costs and improve production,” and it would seem that one of the ways they cut costs is by dodging environmental performance.
CATF’s 2022 Benchmarking Methane Report rated Hilcorp as the #1 methane polluter and one of the top two overall greenhouse gas polluters in the industry for the second consecutive year. In other words, Hilcorp makes its money by putting front line communities at risk and undermining any efforts to limit global warming. And now the EPA is proposing new rules that would reward companies like Hilcorp.
Hilcorp makes its money by putting front line communities at risk and undermining any efforts to limit global warming. And now the EPA is proposing new rules that would reward companies like Hilcorp.
The “Hilcorp Loophole”
Carlyle’s dark money has helped Hilcorp buy up billions of dollars worth of low producing legacy wells from larger public companies (like Shell and bp) to strip them of their last bits of oil and gas.
According to Rextag’s Energy Datalink, just under 19,000 of Hilcorp’s wells in the continental U.S. (80% of their total wells in the same area) are low producing wells (also known as marginal or stripper wells). These wells produce less than 15 barrels of oil equivalent per day and are often bare bones operations with very little infrastructure at the wellhead. Because of this, these wells are often exempt from common sense regulations.
Faulty conventional wisdom, which the EPA is still relying on, holds that the less you produce and/or the less equipment you have, the lower your potential to pollute.
This is not the case. In fact it is quite the opposite.
Low Production, High Pollution
New studies show that, pound for pound, low production wells are some of the highest emitters of methane pollution. While low producing wells only account for around 6% of oil and gas produced they are responsible for more than half of ALL pollution associated with oil and gas production.
The emissions data used in this study comes from real measurements rather than using the EPA’s Greenhouse Gas Inventory (known to underestimate methane emissions from oil and gas by as much as 100%) and finds that the total pollution from low producing wells alone is equal to the EPA’s woefully lacking underestimate for all of oil and gas production.
And our visits to Hilcorp’s low production sites confirm that. Our certified thermographers have documented over 60 pollution events at Hilcorp’s facilities (many of them are viewable here).
The Bottom Line
We know cutting methane is our best chance to fight climate change. The Biden administration has said we must use every tool available to act on climate. The U.S. is a founding member of the Global Methane Pledge. So why would the EPA want to let pollution like this slide?
Luckily there is still time for the EPA to follow the best available data to act within their power to cut methane pollution, advancing protections for at least 17 million people living near active oil and gas operations and slowing the climate crisis.
If you think the EPA should take this critical step, please sign our petition urging President Biden and EPA Administrator Regan to follow the science and end low producing well loopholes.