Company: REI
Filing Date: 2025-03-05
Form Type: 10-K
Source: 0001628280-25-010585
Chunk: 179

Company: RING ENERGY, INC.
Filing Date: 2025-03-05
Form: 10-K
Item: Item 1A
Chunk 179
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 programs. The IRA also imposes the first-ever fee on GHG emissions through a WEC, which the EPA has finalized regulations to implement. In May 2024, the EPA published a final rule expanding GHG emissions reporting obligations for certain oil and natural gas sector sources. While the first Trump administration took a number of actions to revise federal regulation of methane from the oil and natural gas sector, these actions were subsequently reversed by both the Biden administration and Congress. Moreover, in December 2023, the EPA published a final rule that established more stringent performance standards for new sources and first-time standards for existing sources under applicable agency regulations at 40 C.F.R. Part 60 for methane and VOC emissions for the crude oil and natural gas sources. The requirements imposed by this rule include enhanced leak detection and repair obligations, zero-emission requirements for certain processes and practices, “green well” completion standards, limitations on routine flaring, and a “Super Emitter Response Program” which triggers additional requirements following certain large emissions events. Compliance with these rules and legislation will likely require enhanced record-keeping practices, the purchase of new equipment, such as optical gas imaging instruments to detect leaks, increased frequency of maintenance and repair activities to address emissions leakage and additional personnel time to support these activities or the engagement of third-party contractors to assist with and verify compliance. While legal challenges to many of the above discussed regulations are ongoing and, either the current Trump administration or Congress may also pursue rulemakings or legislation, respectively, that could repeal, revise, or otherwise limit the enforcement of these regulations and certain of the IRA’s provisions, like the WEC, we cannot predict whether and when such action will be taken and the outcome and timeline for such actions may continue to be uncertain and subject to further legal challenges.

Internationally, the United Nations-sponsored “Paris Agreement” encourages member states to individually determine and submit non-binding emissions reduction targets. The United States’ most recent goal was to reduce its economy-net GHG emissions by 61 to 66 percent from 2005 levels by 2035. Recent Conferences of the Parties have resulted in reaffirmations of the objectives of the Paris Agreement, calls for parties to eliminate certain fossil fuel subsidies and pursue reductions in non-carbon dioxide GHG emissions, agreements to transition away from fossil fuels in energy systems and increase renewable energy capacity, financial commitments to fund energy transition efforts in developing countries, and similar initiatives, though none legally binding. However, in January 2025, President Trump initiated the United States’ withdrawal from