In a stunning defeat for the Trump administration, the Republican-controlled Senate narrowly failed to pass a bill calling for repeal of an Obama-era rule governing flaring and venting of associated natural gas on public and tribal lands.
The Senate vote on HJ Res. 36 was 49-51. The bill, introduced by Rep. Rob Bishop (R-UT) in late January, called for congressional disapproval of the Bureau of Land Management's (BLM) Waste Prevention, Production Subject to Royalties, and Resource Conservation Rule -- also known as the venting and flaring rule.
Last February, Republicans in the House of Representatives invoked the Congressional Review Act (CRA) to pass the bill along mostly partisan lines. It was received by the Senate on Feb. 3.
Republican Sens. Susan Collins of Maine, Lindsey Graham of South Carolina and John McCain of Arizona joined all 48 members of the Democratic caucus in opposing the resolution. Under CRA rules, the Senate has until Thursday to pass the bill.
Energy Industry Chagrined
Groups representing the oil and gas industry expressed disappointment at the news.
"We're disappointed the Senate wasn't able to stop President Obama's unworkable rule by a federal agency that does not have the Congressionally-granted authority to regulate air quality," said Barry Russell, CEO of the Independent Petroleum Association of America (IPAA). "This overreaching rule puts independent producers -- many of which are small family-run businesses with limited resources -- on the hook for complying with the costly burdens of a flawed regulation.
"This regulation will particularly impact small-producing, marginal wells located on federal lands. Shutting-in these smaller wells means less royalties will get sent back to the federal Treasury. These federal dollars are vital for many western economies and are used to fund state and local priorities, such as education and infrastructure projects like roads and bridges."
Russell said the IPAA would work with the Department of Interior (DOI) "on a targeted, meaningful solution that will achieve the common goal of ensuring the American taxpayers receive a fair and equitable return in the form of royalties while developing a safe, workable regulation, instead of this one-size-fits-all approach."
Western Energy Alliance (WEA) President Kathleen Sgamma concurred. "Obviously, we're disappointed the Senate didn't even have the wherewithal to debate overturning the rule on the floor," she said in a separate statement Wednesday.
American Petroleum Institute’s Erik Milito, upstream director, called the rule "an unnecessary and costly misstep" from the BLM and warned that it "could impede U.S. energy production while reducing local and federal government revenues."
Sgamma said the WEA, IPAA and four western states fighting the regulation, "will continue to make the case in court that the rule is a vast overreach of BLM authority. The district court judge [in that case] expressed grave doubts about BLM's authority to regulate air quality, and we and the states will continue to press that point."
GOP Defections Fatal
Although Russell and Sgamma each praised Sen. John Barrasso (R-WY) for his support of the bill, the defection of McCain and united opposition from Democrats, including those from oil and gas producing states, proved fatal to the bill's chance of passage.
"Improving the control of methane emissions is an important public health and air quality issue, which is why some states are moving forward with their own regulations requiring greater investment in recapture technology," McCain said Wednesday. "I join the call for strong action to reduce pollution from venting, flaring and leaks associated with oil and gas production operations on public and Indian land.
"While I am concerned that the BLM rule may be onerous, passage of the resolution would have prevented the federal government, under any administration, from issuing a rule that is 'similar,' according to the plain reading of the CRA. I believe that the public interest is best served if the DOI issues a new rule to revise and improve the BLM methane rule."
Sen. Lisa Murkowski (R-AK), chairman of the Senate Energy and Natural Resources Committee, also expressed her disappointment.
“BLM’s rule is not necessary, not part of its core mission, and it will create higher economic costs, reduce jobs and revenues, and weaken our energy security,” she said. She commended fellow Republican Wyoming Sen. John Barrasso “for his leadership on this resolution and look forward to working with him and the administration to identify a better path forward on this rule.”
The IPAA and WEA filed a lawsuit against the rule last November. Montana and Wyoming filed a separate lawsuit three days later, and North Dakota and Texas subsequently joined as petitioners. The two lawsuits were combined at the end of November.
Under the final rule, to be implemented in stages, oil and gas producers would be required to use currently available technologies and processes to cut gas flaring in half at oil wells on public and tribal lands. Operators would also be required to periodically inspect their facilities for leaks and replace outdated equipment that vents large quantities of gas into the air. Other parts of the rule require operators to limit venting from storage tanks and to use best practices to limit gas losses when removing liquids from wells.
"We'll also be working closely with the DOI on reviewing and rescinding this rule," Sgamma said. "BLM has the authority to regulate waste, but that's not what it did in this rule. It imposed air quality controls,” which she said “read almost verbatim” from U.S. Environmental Protection Agency rules.
"BLM has neither the authority nor expertise to regulate air quality,” Sgamma said. DOI Secretary Ryan Zinke, a former House member from Montana, “understands that fact. While we were hoping for a clean break through the CRA process, we will just roll up our sleeves and continue to work to overturn this rule."
Conversely, environmental groups were elated. "Today's victory against Trump's plan to hand our public lands to Big Oil is a win for the American people," said Lukas Ross, spokesman for Friends of the Earth. "Reducing venting and flaring from oil wells will reduce emissions contributing to climate change and save public resources. Today the Senate proved it will not always rob taxpayers to line Big Oil's pockets."