The People of America's Oil and Natural Gas Indusry

Improving Air Quality and the Unnecessary BLM Rule

Mark Green

Mark Green
Posted May 9, 2017

We’ve made the strong economic case for repealing the Bureau of Land Management’s so-called “venting and flaring” rule. Yet, just as important is the reality that since its inception, BLM’s rule has been an environmental solution in search of an environmental problem.

Here’s what we mean: Below, EPA data on methane emissions from natural gas systems – wells, processing facilities and transmission and distribution pipelines – from 1990 to 2015:

NG_methane_emissions

Methane emissions associated with the natural gas industry fell by 16.3 percent from 1990 to 2015, according to EPA – even as natural gas production increased 55 percent. This is the result of industry innovating new technologies to capture more and more methane, the main component in natural gas. Progress is occurring under existing regulation by the states and EPA, which have jurisdiction over air quality under the Clean Air Act.

Writing to leaders of the Senate, which is expected to vote this week on disapproval of BLM’s rule under the Congressional Review Act, API President and CEO Jack Gerard called the rule “redundant and technically flawed.” Gerard:

Methane emissions from our sector continue to fall, even as natural gas production nationwide has soared. … This rule from BLM, an agency which lacks the authority and expertise to regulate air quality, is an unnecessary layer of federal regulation.

Unnecessary for two important reasons: First and foremost, because the environmental issue is being addressed, and quite successfully; methane emissions were coming down before BLM’s rule went into effect earlier this year. Second, because EPA and the states are charged with regulating air quality, not BLM. Imagine the post office deciding it should start writing speeding tickets. BLM regulating air quality is something like that and a clear example of unnecessary – and needlessly encumbering – government-creep.

Which brings us back to the economic argument against BLM’s rule. As we’ve said, this rule already may be wreaking negative economic impacts:

  • An analysis done when the rule was proposed found that the added cost of compliance could result in the permanent shutting-in of up to 40 percent of wells that flare on federal lands.
  • Even a royalty loss of 1 percent would result in lost revenues to the federal government of more than $14 million, based on 2016 royalties reported by the Office Natural Resources Revenue.

The broader context is that there’s already a downward trend in natural gas and oil output on federal lands, with federal revenue collections falling more than $400 million from 2010 to 2015. API estimates that if production on federal lands had grown at the same rate as overall U.S. production from 2010 to 2015, total royalties would have been 29 percent higher, with an additional $4.9 billion in royalties collected by the federal government.

Conversely, adding regulatory hurdles only hinders investment and production on federal lands. Hurdles like BLM’s rule are a disincentive to overall domestic energy production, advancing America’s overall security interests, as well as the production of natural gas – the increased use of which is the biggest reason U.S. carbon dioxide emissions from electricity generation are at their lowest level in nearly 30 years. Gerard:

[E]nergy security and environmental progress can be complementary goals. Forward thinking energy policy should look for ways to increase the production and use of U.S. natural gas, not impede it as the BLM rule will do.

The Senate should follow the House’s lead and use CRA to repeal the rule now.


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.