The U.S. Department of Interior's (DOI) Bureau of Land Management (BLM) is proposing to replace the Obama-era Waste Prevention Rule, which governs flaring and venting of associated natural gas on public and tribal lands, with requirements similar to those that were in force prior to the rule’s adoption in 2016.
“In order to achieve energy dominance through responsible energy production, we need smart regulations not punitive regulations,” said BLM’s Joe Balash, assistant secretary for Land and Minerals Management. “We believe this proposed rule strikes that balance and will allow job growth in rural America.”
The proposed rule would eliminate duplicative regulatory requirements and re-establish long-standing requirements that the 2016 final rule sought to replace, BLM said in announcing its proposal Monday. The agency said there were concerns that the economic impact on operators was underestimated in the 2016 rule, and there was “considerable overlap” with state and federal regulations.
BLM said its proposal “would align the regulations with administration priorities on energy development, job creation and reduced compliance costs while also working more closely with existing state regulatory efforts.”
Among other things, BLM’s proposal would rescind a series of requirements of the 2016 final rule, including waste minimization plans, and requirements for well drilling, well completion and related operations, pneumatic controllers equipment, and storage vessels equipment. In addition, gas capture requirements would be revised to conform with pre-2016 policy, as would downhole well maintenance and liquids unloading requirements, and measuring and reporting volumes of gas vented and flared.
The public would have 60 days to submit comments on the proposed rules once they are published in the Federal Register.
First unveiled two years ago, the venting and flaring rules would require operators to deploy equipment and processes to limit the amount of flared gas at oil wells on public and tribal lands, and to periodically inspect their wells for leaks. Operators would also be required to limit venting from storage tanks. In addition, the rules clarified when operators owed the government royalties, and they gave BLM the option of setting certain royalty rates higher than 12.5%.
When the rules were introduced, the Obama-era BLM cited a 2010 Government Accountability Office (GAO) report that found flaring was costing states, tribes and federal taxpayers as much as $23 million in annual royalty revenue.
BLM in December temporarily suspended or delayed parts of the Obama-era rule until Jan. 17, 2019. At that time the agency, which outlined its plans for the rule last October, said "immediately implementing some parts of the 2016 final rule could unnecessarily burden industry as the BLM considers which parts of that rule might change." After conducting a regulatory impact analysis, BLM estimated that the 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.
BLM joined with North Dakota, Texas and three energy industry groups to push back against efforts in federal district court to derail the Trump administration’s decision to postpone the compliance dates for the venting and flaring rule.
Republican lawmakers who had opposed the venting and flaring rule were quick to endorse BLM’s proposal to repeal it and said they would support the decision, which would be overseen by DOI Secretary Ryan Zinke.
“I am glad that Secretary Zinke is proposing to replace the unnecessary and costly methane rule,” said Sen. John Barrasso (R-WY). “If left in place, the rule would have discouraged energy production and job creation in Wyoming and across the West.”
“Revising the duplicative BLM methane rule will empower greater energy production on federal lands,” said Sen. John Hoeven (R-ND). “At the same time, we continue working to build the infrastructure we need across federal, state and private lands to capture this valuable resource and reduce flaring.”
Environmental groups were equally strong in their criticism of BLM’s latest proposal. Repealing the Obama-era rules “would only serve to reward the least responsible actors in industry at a time when other companies are moving forward to tackle methane waste,” said Environmental Defense Fund President Fred Krupp. “Gutting the rule would allow unchecked waste of natural gas, unnecessary pollution, and the loss of revenue to communities and tribes to address critical needs such as schools and roads.”