Agency finalizes methane waste rule
BLM hit instantly with suit by oil, gas groups
The Obama administration on Tuesday finalized a Bureau of Land Management rule to limit methane waste related to oil and gas development on federal and tribal lands, but it faces an immediate legal challenge and the potential for President-elect Donald Trump to try to reverse it.
The Interior Department said in a release that the rule “updates 30-year-old regulations governing venting, flaring, and leaks of natural gas, and will help curb waste of public resources, reduce harmful methane emissions, and provide a fair return on public resources for federal taxpayers, tribes and states.”
Methane is a potent greenhouse gas and also contains other hazardous pollutants such as cancer-causing benzene.
“This rule to prevent waste of our nation’s natural gas supplies is good government, plain and simple,” Interior Secretary Sally Jewell said in the release. “We are proving that we can cut harmful methane emissions that contribute to climate change, while putting in place standards that make good economic sense for the nation.”
The Interior Department said the rules will be phased in over time and will require energy companies to cut flaring in half on oil wells, periodically inspect their operations for leaks, replace outdated equipment that vents large quantities of gas, and limit venting from storage tanks and gas losses when removing liquids from wells.
“To ensure a fair return to the American taxpayer, the rule also clarifies when operators owe royalties on flared gas, and restores the government’s congressionally authorized flexibility to set royalty rates at or above 12.5 percent of the value of production,” Interior said.
The rule will have limited impact on oil and gas operations in Colorado because the state in 2014 already passed the nation’s first rules specifically targeting methane emissions from oil and gas development. However, rule supporters in the state say the federal protections are needed to prevent waste and protect Colorado air from emissions coming from other states.
“The health of people across the nation will benefit by reducing the methane and other hydrocarbons, including volatile organic compounds, and reducing their byproducts of smog, acid rain, ozone, carcinogens, and oxides of carbon, nitrogen and sulfur,” Battlement Mesa resident Bob Arrington said in a joint news release from the Western Colorado Congress, Citizens for Clean Air and the Grand Valley Citizens Alliance.
The Western Energy Alliance and Independent Petroleum Association of America immediately announced the filing of a lawsuit Tuesday to challenge the new rule. The groups said in a news release that the BLM is using the guise of waste reduction to try to regulate air quality despite lacking the legal authority to do so. That authority is assigned to the Environmental Protection Agency under the Clean Air Act, the groups said.
“We support the goals of capturing greater quantities of associated gas and reducing waste gas, but overreaching regulation that fails to acknowledge industry success is not the most effective way to meet those goals,” Kathleen Sgamma of the Western Energy Alliance said in the release. “The natural gas industry has delivered a 21 percent reduction in methane emissions since 1990 at the same time as increasing production by 47 percent — all without federal regulation. We don’t need federal rules to tell us to reduce methane emissions, as it’s the very product we’re working so hard to capture and sell.”
The Interior Department said in a question-and-answer document on the final rule, “The laws authorizing BLM activities provide that the BLM’s responsibility to manage oil and gas development on the public lands includes finding ways to minimize waste and environmental harm.”
Josh Mantell of The Wilderness Society told reporters on a conference call Tuesday that he’s confident that the BLM is on strong legal footing on the issue.
“We’re not surprised that some folks have decided to take this other (legal) challenge but we feel very confident that that will not go very far,” he said.
Meanwhile, questions loom over the rule’s future under Trump, whose transition website says his administration will encourage energy development rather than “continuing the current path to undermine and block America’s fossil fuel producers.”
Asked about any hopes of having the rule reversed, Reid Porter of the American Petroleum Institute said in an email that his organization is still going through the new rule and all options are being reviewed.
Sgamma said by email that WEA is “exploring ways the rule could be reversed. The rule so vastly exceeds BLM’s authority that it is ripe for correction by an administration that actually respects the rule of law and doesn’t try to legislate through regulation. In addition, because it’s at the midnight hour of the Obama administration, it’s ripe for scrutiny under the Congressional Review Act, which makes it easier to overturn parting ‘gifts’ from a lame duck administration.”
The rule is scheduled to take effect Jan. 17, and Trump will be inaugurated Jan. 20. Rule supporters participating in Tuesday’s conference call said the rule by law can’t take effect until 60 days after being finalized. But because it still will be able to go into effect before Obama leaves office, it likely would be harder to reverse, requiring a new rulemaking process, they said.
Interior said in its Q&A document, “Regardless of election outcomes, the Department of the Interior is expected to carry out the laws guiding its mission of responsible stewardship of public lands, water, and wildlife, and that is what we will continue to do. That’s what the American people expect, no matter who the president is, and we will uphold the responsibility granted to us by Congress to manage our public lands, waters, and wildlife with care.”
It noted that its new rule initially was requested by the Government Accountability Office and Interior’s Office of Inspector General, and members of Congress.
“We believe the next administration will recognize the benefits of reducing waste, boosting natural gas supplies, and obtaining fair returns for public resources, which are associated with this rule,” the Interior Department said.
It estimates the rule will cut methane emissions by up to 35 percent. It says methane losses during oil and gas production from 2009 to 2015 would have been enough to serve more than 6 million households for a year. That meant millions of dollars of lost royalty revenue to the federal government, states and tribes.
Mantell said for a new administration to try to reverse the rule would be difficult “and at odds with the opinion of the American people, who value American energy and do not want to see our valuable resources wasted.”
The industry has said the BLM could be of more help if it streamlined approvals of pipeline projects so gas could be more quickly shipped to market, and less flared. Interior says the BLM has been working to speed up such approvals, including through the establishment of teams that can move from office to office within the agency to help work on pending applications.