The People of America's Oil and Natural Gas Indusry

Out of the West: Opposition to Venting and Flaring Rule

Mark Green

Mark Green
Posted February 3, 2017

Last week we encouraged Congress to use the Congressional Review Act to repeal the Bureau of Land Management’s (BLM) technically flawed and redundant venting and flaring rule. It appears lawmakers are poised to do just that – concerned that the rule could discourage future energy investment on Indian and federal lands, where production trails output on state and private land, and that it risks negatively impacting supplies of affordable energy to American consumers and businesses. Good reasons all to axe BLM’s rule.

Likewise, repeal would be responsive to the specific concerns of voices in the West, where vast acreages are under federal control. These include the overlapping of regulations already adopted by the states, potential cost increases to industry that could discourage investment in those states and more. Below, a sampling of for-the-record comments filed with BLM.

utah_sealUtah – Public Lands Policy Coordinating Office

 “One of the State’s primary concerns is that BLM is seeking a national one-size-fits-all solution to a gas flaring problem that is occurring in a few states … the economic cost-benefit analysis prepared by BLM fails to consider Utah’s distinctive circumstance … Utah is already recognized as having strict limits for gas venting and flaring … thus, State experts are capable of addressing venting and flaring and leak detection and repair requirements without expanded federal rulemaking by BLM … [T]he proposed rule gives BLM authority without accountability and lacks proper cooperation with existing state regulatory agencies.”

Western Governors Association

“Regulation of methane emissions from the oil and gas sector must be adapted to local conditions and circumstances. States already have the dual responsibilities to manage programs to protect air quality and to regulate oil and gas operations.”

NM_sealNew Mexico - Commissioner of Public Lands

“While the state is capable of processing applications for permission to drill very expediently, the BLM timeframe for doing so is incredibly inefficient and would become even more so under the pressures of the increased regulatory burden outlined by the proposed rule. … [T]he NMSLO (New Mexico State Lands Office) is convinced that this proposed rule would actually have the opposite effect regarding royalties than that stated by the BLM and would result in substantial royalty losses. … The BLM’s proposal to increase regulatory authority and infringe on the ability of the NMSLO to efficiently administer its own assets would cause direct harm to the school children of New Mexico and will lead to negative environmental impacts on state trust lands at a time when the trust is already vulnerable due to a severe and prolonged downturn in the hydrocarbon market.”

Similarly, here’s part of a letter to House Speaker Paul Ryan from Gov. Susana Martinez of New Mexico, the largest producer of federal onshore oil and natural gas, the revenue from which is the largest single funding source for the state’s budget:

Absent a repeal, funding for New Mexico’s schools, roads and healthcare will be dramatically reduced on account of the reduction in revenue generated by the oil and gas industry. … I believe we can protect the environment while growing our economy. Unfortunately, BLM’s Venting and Flaring Rule, which was rushed through at the twilight of the Obama Administration, fails to strike a sensible balance. Rather than allowing this misguided rule to move forward, I urge you to repeal the rule and work with the Department of Interior to address the infrastructure challenges currently causing venting and flaring events to occur. Insufficient pipeline capacity and gas processing capacity make it difficult for producers to capture and sell as much of their product as possible. The Department of Interior can correct the root causes of venting and flaring events by approving pipeline right-of-ways more efficiently, which will increase pipeline capacity.

One more, an excerpt from a letter that the Western Energy Alliance, the Colorado Oil & Gas Association and the Colorado Petroleum Council sent to Colorado’s U.S. senators, Cory Gardner and Michael Bennet:

“The BLM methane rule will have damaging consequences not only for our industry, but for rural communities across the West. BLM claims its new rule will increase federal royalties on otherwise ‘wasted’ natural gas production, which it values at $17 million annually. However, an economic analysis … estimates the BLM rule would capture less than $4 million in new royalties but at a staggering cost of $1.26 billion. The analysis concludes that impacts will be felt across the West through $997,199,000 of dollars in lost output, wages, royalties, and $114,112,000 in lost tax receipts by local, state, and federal government.”

BLM’s rule should be repealed. According to the Congressional Research Service, from 2010 to 2015 federal onshore natural gas production was down 18 percent – while output on state and private land increased 55 percent. While oil production on federal land increased 57 percent over that period, we’re talking about a relatively small piece of overall U.S. production (less than 500,000 barrels per day), and output on state and private land, more than 15 times as large, increased 113 percent over the same period. See more in this white paper. The big takeaway is that the U.S. should fully harness its energy resources in a safe and environmentally responsible manner, and eliminating BLM’s flawed rule is a step toward that goal. API President and CEO Jack Gerard, in a letter to House leaders:

Given the broad impacts to U.S. oil and natural gas production on Indian and federal lands, the lack of authority by BLM to regulate air quality and the fact that U.S. producers already are highly incented to capture methane for delivery to American consumers, it is appropriate for the Congress to use the CRA to disapprove this redundant and unnecessary regulation. … We know that the exploration and production of federal oil and natural gas will further enhance U.S. economic and national security, and that a forward-thinking energy policy that prioritizes and grows federal production will benefit all Americans.


ABOUT THE AUTHOR

Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.