By November 17, 2016 0 Comments Read More →

Independent oil/gas producers challenge BLM’s venting and flaring rule

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Venting and flaring lawsuit

DENVER Western Energy Alliance and the Independent Petroleum Association of America (IPAA) filed a lawsuit today challenging Bureau of Land Management’s (BLM) final rule regulating venting and flaring from oil and natural gas operations on federal and tribal lands.

In its claim filed before the US District Court in Wyoming, the trade associations call BLM’s rule a broad new air quality regime that goes beyond authority granted by Congress. The trades are represented by Eric Waeckerlin and Kathleen Schroder of Davis Graham & Stubbs.

When operating on public lands, businesses already comply with air quality regulations mandated by the Environmental Protection Agency.

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“BLM lacks statutory authority for the creation of an air quality regulatory program, which has resided with EPA and the states since the 1970’s,” said Kathleen Sgamma, vice president of government and public affairs at the Alliance.

BLM’s venting and flaring rule creates duplicative regulation that conflicts with EPA requirements.

“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. 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 venting and flaring rule is just as egregious as BLM’s hydraulic fracturing rule, and we’re confident it will similarly be overturned by the courts,” said Sgamma.

Authority to regulate air quality was designated to the EPA under the Clean Air Act, yet, BLM has tried to assume this role under the guise of reducing waste from oil and natural gas production.

“Make no mistake, reducing emissions is in the best interest of our industry,” said Dan Naatz, senior vice president of government relations and political affairs at IPAA.

“Producers have every incentive to capture and sell as much of their product as possible to consumers, rather than letting it escape in the atmosphere,” said Naatz.

“However, currently, a lack of infrastructure and gathering lines to collect gas at the wellhead make it difficult for producers to safely transport our product to market.”

The associations say independent producers have repeatedly shared their concerns with and provided industry data to the Obama Administration. They are calling the new rules “an 11th hour” shot by an administration that doesn’t fully understand how its rules impact business.

“Potentially raising royalties on an industry that has been financially hurting is counterintuitive to any business certainty,” said Naatz.

“The continued regulatory onslaught on American producers calls into question the president’s commitment to the laws requiring mineral production on federal lands or whether the misguided crusade to ‘Keep It in the Ground’ has overtaken this administration.”

Additional Background

  • According to EPA’s greenhouse gas GHG inventory, the entire oil and natural gas industry represents about 3.4 percent of total U.S. GHG emissions. Methane emissions from exploration and production are 1.07 percent of total U.S. GHG emissions, which is well below the 3.2 percent threshold that the Environmental Defense Fund (EDF) considers natural gas to deliver a climate change benefit.
  • According to the Intergovernmental Panel on Climate Change (IPCC), “…the rapid deployment of hydraulic-fracturing and horizontal-drilling technologies, which has increased and diversified the gas supply and allowed for a more extensive switching of power and heat production from coal to gas …is an important reason for a reduction of GHG emissions in the United States.”
  • By BLM’s most ambitious estimates, the venting and flaring rule would reduce approximately 0.0092% of global GHG emissions, a miniscule amount. Studies from the National Oceanic and Atmospheric Administration and others show that wetlands, natural seepage and agriculture are largely responsible for increased global methane levels, while emissions from oil and natural gas production have declined.
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