Interior Department Proposes Delay In Methane Rule
The Department of the Interior recently announced plans to delay a final ruling by the Bureau of Land Management (BLM) on methane emissions rules until January 2019.
Senator John Barrasso (R-Wyo.) issued a statement applauding the Department’s decision.
“Today’s decision to delay the misguided BLM methane rule is a welcome reprieve for energy production and jobs across the West,” said Barrasso. “Wyoming and other states are already leading the way when it comes to regulating methane emissions. I’m encouraged by Sec. [Ryan] Zinke’s action to delay this unnecessary rule and I urge the administration to rescind it as soon as possible.
“BLM should focus its resources on permitting natural gas pipelines on federal lands. More pipelines will help producers capture additional gas and get that gas to market. That’s a win-win for our environment and our economy.”
The purpose of the delay is to “avoid imposing temporary or permanent compliance costs on operators for requirements that may be rescinded or significantly revised in the near future,” according to comments submitted to the Federal Register.
The rules in question, issued during the tail end of the Obama Administration, dealt with added requirements of oil and gas operators regarding venting and flaring of methane on public lands. A full, independent analysis estimates the cost of compliance to be about $110,000 per new well.
Oil and gas representatives have argued that the rules were unnecessary and would cause harm to the industry. Before the new rules were officially introduced, BLM did acknowledge that many of the requirements were either duplicative of EPA regulations, consistent with industry practice or already found in existing state regulations. Despite this overlap, the agency still found it to be an “economically significant rule.”
BLM will now review the rules out of concern that the Regulatory Impact Analysis that was conducted in 2016 may have “underestimated costs and overestimated benefits.” The initial analysis had found the 2016 final rule would impose compliance costs of $114 to $279 million per year.
Robert McIntyre, spokesperson for the New Mexico Oil and Gas Association (NMOGA), told the Current-Argus that the new rules could have a disproportionate impact on small drilling operators in his state, who could risk going out of businesses if costs resulting from increased regulations are too high.
“The rule would have made extraction in New Mexico way more challenging…we’d see small producers shuttering wells. The cost of compliance would be very high.” McIntyre added, “The rule would put mom and pop shops out of business…it would hurt New Mexico.”
Nearly half of New Mexico’s oil production comes from federal lands. The state received receipts of approximately $1.6 billion from oil and gas production in the last fiscal year. According to NMOGA, the regulations could cost New Mexico $100 million annually in its first three years on the books.
The bureau has opened a public comment period on the regulation that ends November 6.