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BLM plans to update 1989 oil and gas industry regulations

FARMINGTON — The Bureau of Land Management has announced proposed updates to its 25-year-old oil and gas regulations in an effort to help ensure states, tribes and taxpayers get fair royalty returns on resources taken from public lands.

The proposed rule changes, announced Friday, will update the BLM’s “Onshore Oil and Gas Order Number 3 (Order 3),” which was set in 1989 before many modern industry operations and technological advances, such as horizontal drilling, were in use.

The proposed changes to federal regulations are intended to ensure that oil and gas produced from leases overseen by the BLM are “properly and securely handled,” according to a July 10 press release.

The proposed new regulations will be available for public comment for a 60-day period ending Sept. 11.

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Janice M. Schneider — a President Barack Obama nominee who became assistant secretary for land and minerals management at the Department of the Interior in 2013 — said the proposed regulations will ensure increased accuracy and reliability of royalty payments from oil and gas leases on public lands.

“The proposed rule represents an important step in the BLM’s modernization of its oil and gas regulations,” Schneider said in a statement. “These updates will help ensure that oil and gas produced from leases overseen by the BLM is properly measured, that American taxpayers receive fair value for public resources, and that Indian tribes and allottees, states and local governments receive the full royalties they are due.”

But Steve Henke, president of the New Mexico Oil and Gas Association, said the proposed changes are misguided. Henke said they spell greater risk and uncertainty and would have a detrimental effect on oil-field activity on federal land.

“If you increase those costs, the net effect will be a reduction in (royalty) revenue rather than an enhancement,” Henke said in a phone interview on Monday. “The market will determine whether this is a proper course by the federal government.”

This article was written by James Fenton from The Daily Times, Farmington, N.M. and was legally licensed through the NewsCred publisher network.