Final Rule Limits Venting, Flaring and Leaking from Oil & Gas Operations to Reduce Waste and Harmful Emissions, Provide Fair Return to Taxpayers
Date: November 15, 2016
Kimberly Brubeck (BLM) (202) -208-5832
WASHINGTON – As part of the Interior Department’s reform agenda to create a cleaner and more sustainable energy future, and in furtherance of the Obama Administration’s Climate Action Plan, U.S. Secretary of the Interior Sally Jewell today announced the Methane and Waste Prevention Rule – a final rule that will reduce the wasteful release of natural gas into the atmosphere from oil and gas operations on public and Indian lands. 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.
“This rule to prevent waste of our nation’s natural gas supplies is good government, plain and simple,” said Sally Jewell. “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. 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 United States is the largest natural gas producer in the world, yet the American public has not benefited from the full potential of this energy resource due to venting, flaring, and leaks of significant quantities of gas during the production process. In fact, enough natural gas was lost between 2009 and 2015 to serve more than 6 million households for a year. According to a 2010 Government Accountability Office (GAO) report, that amount of wasted gas means states, tribes and federal taxpayers lose millions of dollars annually in royalty revenue for the Federal Government and the states that share it.
In addition, venting and leaks during oil and gas operations lead to significant emissions of harmful methane – a greenhouse gas at least 25 times more potent than carbon dioxide.
The rule, which will be phased in over time, requires oil and gas producers to use currently available technologies and processes to cut flaring in half at oil wells on public and tribal lands. Operators also must periodically inspect their operations for leaks, and replace outdated equipment that vents large quantities of gas into the air. Other parts of the rule require operators to limit venting from storage tanks and to use best practices to limit 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.
The rule also protects the environment. Without government action, U.S. methane emissions are projected to increase substantially. The rule makes an important contribution to the Obama Administration’s goal to cut methane emissions from the oil and gas sector by 40 – 45 percent from 2012 levels by 2025. This rule projects cutting methane emissions by as much as 35%.
“This rule will benefit the American public and the environment,” said Assistant Secretary for Land and Minerals Management Janice Schneider. “The rule responds to recommendations from several government studies, as well as stakeholder and tribal input. The result is an effective rule that not only gets more of our nation’s natural gas into pipelines but also reduces pollution and cuts greenhouse gas emissions.”
The Bureau of Land Management (BLM) developed the final rule after robust outreach efforts. In 2014, the agency conducted initial public and tribal meetings. Publication of the draft rule was followed by a public comment period that generated hundreds of thousands of comments, and during which the BLM held additional public meetings and tribal consultation. The BLM also carefully coordinated with states and the Environmental Protection Agency to avoid inconsistency or redundancy in regulations.
The BLM’s previous rules addressing venting and flaring were adopted long before new technologies unlocked vast new natural gas supplies in the United States. But recent technological advances allow operators to produce more oil and gas with less waste. About 40 percent of natural gas now vented or flared from onshore Federal leases could be economically captured with currently available technologies, according to a 2010 GAO report.
“America's natural gas helps power our economy – it's a resource, not a waste product, and it's time we start treating it that way,” said BLM Director Kornze. “With better planning and today's affordable technology, we can cut waste in half. This common-sense rule will save enough gas to supply every household in the cities of Dallas and Salt Lake City combined – every year.”
The BLM’s onshore oil and gas management program is a major contributor to our nation’s oil and gas production. The BLM manages more than 245 million acres of land and 700 million acres of subsurface estate, making up nearly a third of the nation’s mineral estate. Domestic production from 96,000 Federal onshore oil and gas wells accounts for 11 percent of the Nation’s natural gas supply and 5 percent of its oil. In Fiscal Year 2015, operators produced 183.4 million barrels of oil, 2.2 trillion cubic feet of natural gas, and 3.3 billion gallons of natural gas liquids from onshore federal and Indian oil and gas leases. The production value of this oil and gas exceeded $20.9 billion and generated over $2.3 billion in royalties, which were shared with tribes, individual Indian owners, and states.