This story has been updated.
The Interior Department on Tuesday finalized a much anticipated new regulation aimed at the oil and gas industry, one that seeks to capture flared natural gas and corral “fugitive” emissions of methane that are escaping drilling operations on public and Native American lands.
The agency argues that large volumes of gas are being lost through practices such as venting and flaring — burning off some of the gas as it arises from a well — as well as inadvertent leaks. And given that these fossil fuel resources are being gathered from public lands, the department says it’s incumbent on companies to take precautions not to lose them — especially since methane released into the atmosphere also worsens climate change. (Natural gas is mostly methane.)
The Interior Department and its Bureau of Land Management, which will implement the rule, argues such “waste” actually deprives taxpayers of royalty revenue gathered from oil and gas operations. The agency says the policy, which requires cutbacks in gas flaring, more inspections for leaks, and in some cases the installation of new equipment, will reduce methane emissions by 175,000 to 180,000 tons annually.
“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,” said Interior department secretary Sally Jewell in a statement. “Not only will we save more natural gas to power our nation, but we will modernize decades-old standards to keep pace with industry and to ensure a fair return to the American taxpayers for use of a valuable resource that belongs to all of us.”
The new rule lands just weeks before a Trump administration takes over with plans to deregulate much of the energy industry.
“We will lift the restrictions on American energy, and allow this wealth to pour into our communities,” pledges the Trump transition website. “It’s all upside: more jobs, more revenues, more wealth, higher wages, and lower energy prices.”
When a draft version was released earlier this year, the American Petroleum Institute charged that the Bureau of Land Management’s “unnecessary proposed rules for venting and flaring could stifle energy development on federal lands with few benefits.”
The group, which represents the interests of the oil and gas industry, was also quick to criticize the final rules Tuesday as overkill, saying they ignore the industry’s independent efforts to reduce greenhouse gas leaks.
“The BLM’s rush to regulate something already being regulated at the state and federal level is an example of poor government policy and a left hand not knowing what the right hand is doing,” Erik Milito, API’s Director of Upstream and Industry Operations, said in a statement. “BLM’s new regulations are unnecessary, redundant, technically flawed and could stifle the innovations that have led to our nation’s environmental successes.
Milito said that new technologies and increased industry focus have led to lower overall methane emissions, even as America leads the world in oil and natural gas production.
“If the goal is to prevent emissions, not impede U.S. energy production, then the BLM should focus on fixing permitting, infrastructure and pipeline delays that slow our nation’s ability to capture more natural gas and deliver affordable energy to consumers,” he said.
From the Republican Congress, the criticism was even sharper.
“This purely political move by the Obama administration is a last ditch effort to save the president’s crumbling climate legacy,” Sen. Jim Inhofe (R-Okla.), said in a statement. “BLM’s rule on methane and the oil and gas industry is unnecessary and duplicative. Congress has many tools with which to rescind this rule and I look forward to working with the incoming Trump Administration to ensure economic expansion prevails over misguided bureaucratic interference.”
Inhofe may have been referring to the 1996 Congressional Review Act, which allows Congress to pass a resolution disapproving of a regulatory action taken within 60 legislative days of the end of a congressional session in the first 75 days in the next session, explains Scott Segal, an attorney and partner at Bracewell LLP who works on energy regulations. The president can then veto, or not veto, such a resolution.
With Congress and the Presidency set to be controlled by Republicans in January, it appears conceivable that these forces could combine to reverse some of Obama’s rules, since a President Trump would presumably not veto these resolutions if they arise.
“During a presidential transition when we’re transferring from one party to another party, that’s the only time when it really makes a difference,” said Segal. It appears this is one of those times.
Jessica Kershaw, press secretary for the Interior Department, defended the timing of the release so close to the transition, noting that the rule “has been under development for several years, has benefited from the input of stakeholders, tribes, and the public, and was initially requested by the [Government Accountability Office, the 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 new regulation is slated to be phased in, meaning that if it stands, it is the Trump administration doing the phasing.
The new rule is one in a trio of methane regulations planned by the Obama administration, which are in various states of completion, and are all geared toward the president’s goal of reducing U.S. methane emissions from the oil and gas sector 40 to 45 percent below 2012 levels by 2025. The current regulation only applies to federal lands, but according to the Interior Department, these supply 11 percent of U.S. natural gas and 5 percent of domestic oil production.
Methane is a powerful greenhouse gas that is far more potent than carbon dioxide, the principal warming agent, over short time periods. However, since it does not last nearly as long in the atmosphere, many scientists have argued that cutting methane emissions helps to buy time, and lower the amount of warming that the planet experiences, while more difficult carbon dioxide reduction policies come into place.
According to the Interior Department, between 2009 and 2015, oil and gas companies operating on public and Native American lands flared, vented, or otherwise lost enough natural gas to serve the needs of 6.2 million U.S. homes in a year.
Environmental groups praised the move Tuesday, saying it will set an important precedent for reducing waste and pollution on federal lands.
“Natural gas is a valuable American resource, but when wasted into the air it causes dangerous pollution,” Fred Krupp, president of the Environmental Defense Fund, said in a statement. “Reducing the amount of gas that oil and gas operators release will conserve an important domestic resource, improve air quality, lower asthma attacks, and slow climate change.”
Krupp noted that the BLM rule had garnered bipartisan support in Congress, as well as in communities throughout the West. He agreed that advancements in drilling technology have allowed the oil and gas industry to reduce methane waste, and said the BLM’s regulation “will help ensure leading practice becomes the standard practice for any company operating on federal leases.”
Brady Dennis contributed to this report.
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