In the latest effort to extend the reach of its climate agenda, the Obama Administration proposed new rules to cut gas flaring and venting on public land.
The United States Bureau of Land Management (BLM) last week proposed new rules to reduce natural gas waste from flaring, venting and leaks occurring on oil and gas production operations of public and Indian lands.
The new rules, which will be implemented over the course of several years, would require producers to take measures to reduce this waste while modernizing existing and outdated production rules, as well as modifying the existing royalty rate provisions.
In a release, the BLM listed the following facts about its proposed rules:
- The BLM’s onshore oil and gas management program is a major contributor to the nation’s O&G production. Over 100,000 federal onshore oil and gas wells account for five percent of the nation’s oil supply and eleven percent of its natural gas.
- Large quantities of natural gas are wasted during oil and gas production, enough to supply about 5.1 million households.
- States, Tribes and federal taxpayers are missing out on royalty revenues lost to wasted natural gas.
- The proposed rule would minimize waste of natural gas by making productive use of it, enough to supply up to about 760,000 homes each year.
- Inaction will be damaging to the environment because methane is a powerful greenhouse gas 25 more times potent than carbon dioxide, further exacerbating the effects of climate change.
- The BLM’s conservative estimates of the rules’ benefits indicate that the costs associated with its implementation will be recouped with net economic benefits ranging up to $188 million per year.
- Operators will be impacted minimally because many have already taken steps to reduce wasted gas.
Interior Secretary Sally Jewell said in a statement, “I think most people would agree that we should be using our nation’s natural gas to power our economy – not wasting it by venting and flaring it into the atmosphere.”
The announcement prompted a mixed bag of reactions, from praise to disdain. Below are a few important statements issued by lawmakers closely involved with the nation’s energy policy.
House Speaker Paul Ryan
In a press release, House Speaker Paul Ryan (R-WI) criticized the Obama administration’s move, saying, “Last week it was an attack on coal on federal lands. This week, it’s an attack on oil and natural gas on federal land.”
He added that Obama has “shown a real hostility toward crating much-needed energy infrastructure, yet his administration is forcing new regulations to capture methane emissions in regions where there is no infrastructure to do so.”
Ryan also accused the president of attempting to “further cripple America’s energy industry” as the administration implements its climate goals. “The American people’s welfare should not have to compete with the president’s desire to cement his climate legacy.”
Similarly, North Dakota Congressman Kevin Cramer said in a statement, “These regulations have nothing to do with protecting the environment and everything to do with shutting down the oil and gas industry in our country.”
Citing the president’s “commitment to an extreme environmental agenda,” he warned that the rules will not only jeopardize a solid energy policy, but will negatively impact business and job growth as well.
New Mexico state lawmakers, though, welcomed the BLM’s draft rules. New Mexico leads the nation in oil and gas produced from onshore federal land, but much of it is wasted due to flaring or venting. This waste has created a methane hot spot the size of Delaware over the San Juan Basin.
In a joint statement, U.S. Sens. Tom Udal and Martin Heinrich, as well as Reps. Ben Ray Lujan and Michelle Lujan Grisham said, “New Mexico’s natural resources provide jobs and royalty payments and are an important part of our state’s economy. But over $100 million worth of those natural gas resources are being wasted due to outdated requirements, costing the state of New Mexico $43 million in lost royalties since 2009.”
In response to the new rules, Colorado Gov. John Hickenlooper said, “Two years ago, Colorado passed some of the most robust emissions requirements across the country for oil and gas operations, including the nation’s first methane regulations.”
He added, “We’re pleased to see that elements of the BLM’s proposed regulations on flaring, venting and leak prevention are modeled from Colorado’s rules, and will minimize the waste of natural gas while reducing harmful emissions.”
Vice President of the Petroleum Association of Wyoming John Robitaille shared similar sentiments. He told the Casper Star Tribune, “As far as I can tell, the things they are talking about we’re already doing.”
Just days before the BLM proposed the rules, Pennsylvania Gov. Tom Wolf unveiled the state’s own plan to reduce methane leaks and emissions at new and existing well sites and pipelines.
As reported by the Post Gazette, Wolf said, “These regulations will improve our air, address the urgent crisis of climate change and help businesses reclaim product that is now wasted. The best companies understand the business case for reducing methane leaks,” adding that whatever doesn’t leak into the atmosphere can be used for energy production.
As reported by E&E Publishing, American Petroleum Institute’s Director of Upstream and Industry Operations Erik Milito commented, “Another duplicative rule at a time when methane emissions are falling and on top of an onslaught of other new BLM and EPA regulations could drive more energy production off federal lands. That means less federal revenue, fewer jobs, higher costs for consumers and less energy security.”
In a statement, Vice President of Government and Public affairs at Western Energy Alliance Kathleen Sgamma said, “We support the goal of capturing greater quantities of methane and reducing waste gas, but a command-and-control regulatory approach is not the most effective way to meet that goal, particularly one that exceeds BLM’s jurisdiction.”