Company: NC
Filing Date: 2025-03-05
Form Type: 10-K
Source: 0000789933-25-000006
Chunk: 47

Company: NACCO INDUSTRIES INC
Filing Date: 2025-03-05
Form: 10-K
Item: Item 1
Chunk 47
---
 Rule could have a significant impact on the upstream and midstream oil and gas sectors.

In November 2024, the EPA announced a final rule to reduce methane emissions from the oil and gas sector. The rule requires payment of a Waste Emissions Charge (WEC) on waste emissions of methane from certain oil and gas facilities. The Inflation Reduction Act-mandated fee would be triggered when companies report more than 25 metric tons of carbon dioxide equivalent per year to the EPA's Greenhouse Gas Reporting Program. The fee begins at $900 per metric ton of methane exceeding that threshold in 2024 and increases over time. A petition for review was filed in January 2025 by a coalition of Texas-led states and other industry groups. The fee could have a significant impact on the upstream and midstream oil and gas sectors.

Drilling and Production

The operations of the Minerals Management segment’s third-party lessees and our equity method investee are subject to various types of regulation at the federal, state and local level. These types of regulation include requiring permits for the drilling of 

14

wells, drilling bonds and generating reports concerning operations. The states, and some counties and municipalities, in which we have mineral interests also regulate one or more of the following:

•the location of wells;

•the method of drilling and casing wells;

•the timing of construction or drilling activities, including seasonal wildlife closures;

•the rates of production;

•the surface use and restoration of properties upon which wells are drilled;

•the plugging and abandoning of wells; and

•notice to, and consultation with, surface owners and other third parties.

State laws regulate the size and shape of drilling and spacing units or proration units governing the pooling of oil and natural gas properties. Some states allow forced pooling or integration of tracts to facilitate exploration while other states rely on voluntary pooling of lands and leases. In some instances, forced pooling or unitization may be implemented by third parties and may reduce our interest in the unitized properties. In addition, state conservation laws establish maximum rates of production from oil and natural gas wells, generally prohibit the venting or flaring of natural gas and impose requirements regarding the ratability of production. These laws and regulations may limit the amount of oil and natural gas that the lessees of our mineral interests can produce from existing wells or limit the number of wells or the locations at which operators can drill. Moreover, each state generally imposes a production or severance tax with respect to the production and sale of oil,