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The Trump administration said Wednesday it plans to temporarily suspend or delay parts of an Obama-era rule governing associated natural gas flaring and venting on public and tribal lands until January 2019.
A proposed rule by the Department of Interior's (DOI) Bureau of Land Management (BLM) is scheduled to be published in Thursday's Federal Register. The BLM said it was currently reviewing its Waste Prevention, Production Subject to Royalties, and Resource Conservation Rule -- aka the venting and flaring rule -- and "wants to avoid imposing temporary or permanent compliance costs on operators for requirements that may be rescinded or significantly revised in the near future."
Under the proposed rule, the implementation dates for certain parts of the venting and flaring rule that have not yet taken effect would be postponed until Jan. 17, 2019. The BLM said it would accept public comments on the proposed rule until Nov. 6.
"As we strengthen America's energy independence, we intend to evaluate regulations to determine if they unnecessarily encumber energy production, constrain economic growth, or prevent job creation," said Acting BLM Director Michael Nedd. "Our proposal would give the BLM sufficient time to review the 2016 final rule and consider revising or rescinding its requirements."
After conducting a regulatory impact analysis (RIA), the BLM estimated that the venting and flaring rule would impose compliance costs of $114-279 million a year on the oil and natural gas industry, excluding potential cost savings for product recovery.
The Independent Petroleum Association of America (IPAA) and the Western Energy Alliance (WEA) filed a lawsuit against the rule last November. Montana and Wyoming filed a separate lawsuit, and North Dakota and Texas subsequently joined as petitioners. The two lawsuits were combined at the end of November.
In the proposed rule, the BLM said petitioners opposed to the rule had argued that the bureau had underestimated the compliance costs in the RIA, adding that the costs "would drive the industry away from federal and [tribal] lands, thereby reducing royalties and harming state and tribal economies." The BLM said it was "concerned" it may have underestimated the costs and overestimated the benefits of the venting and flaring rule, hence the need for the delay.
Industry Elated, Enviros Not So Much
The oil and gas industry said it was encouraged by the BLM's decision.
"Natural gas and oil operators across the country share the DOI's objectives of conserving resources and preventing waste," said American Petroleum Institute spokesman Erik Milito. "While the BLM's authority in this area is limited, we are taking action through innovation and technology advancements in our operations to successfully capture and reduce methane emissions, the main component of natural gas.
"We welcome BLM's efforts to get this right and encourage the agency to develop an achievable rule in the months ahead that serves to prevent waste and conserve resources while encouraging energy production on federal lands."
WEA President Kathleen Sgamma told NGI's Shale Daily that "it doesn't make sense to have companies comply with a rule that will be substantially changed in the near future. The rule finalized last year was an unlawful overreach as BLM attempted to assume the air quality regulatory authority that resides with the states” and with the U.S. Environmental Protection Agency.
"The administration is going through the proper rulemaking process to correct this unlawful rule, but that process takes time," Sgamma said. "The relief from complying with the unlawful rule makes sense as BLM completes that process."
IPAA’s Dan Naatz, senior vice president for government relations and political affairs, said it was "prudent for the BLM to delay implementation of a rule it's already seeking to change. Independent producers rely on long-term certainty and predictability to conduct their business."
Conversely, environmental groups voiced outrage over the move.
Earthjustice Vice President Abigail Dillen said, "This latest delay of the BLM methane rule simply reaffirms what we've known all along: when the oil and gas industry says 'jump,' the Trump administration asks 'how high?' Under the Trump administration, the DOI has essentially become an arm of the oil and gas industry, bending over backwards to do the bidding of corporate polluters at the expense of public health and safety."
Sierra Club spokeswoman Lena Moffitt said the rule "would help fight climate change and protect our public lands and communities. Undermining these protections is a slap in the face to the majority of Americans who support them, and to the many people who will breathe polluted air as a result."
Last March, President Trump signed an executive order that called for, among other things, the DOI to review, rescind or revise the venting and flaring rule. The administration in June outlined its plans over the rule in federal court.
Although lawmakers in the GOP-controlled Senate narrowly failed to pass a bill to repeal the rule in May, their counterparts in the House successfully added an amendment to a $1.2 trillion package of appropriations bills last month. The amendment calls for blocking the BLM from enacting the venting and flaring rule.