Two lawmakers from North Dakota, the second largest oil-producing state in the nation, are turning up the heat on the U.S. Senate to repeal a last-minute Obama administration regulation targeting energy development on federal lands.
At the same time, a national pro-business group is calling on the Senate to act, launching a multi-media advertising campaign targeting North Dakota and five other states.
U.S. Rep. Kevin Cramer (R-N.D.) is demanding the Senate vote “as soon as possible” to repeal a U.S. Bureau of Land Management (BLM) rule targeting methane emissions from oil and gas development.
The “venting and flaring” rule, finalized two months before President Barack Obama left office, has angered officials from across the West.
A disapproval motion under the Congressional Review Act (CRA), which would repeal the venting and flaring rule, passed the U.S. House more than five weeks ago and is now before the Senate.
“This God-awful rule is aimed right at North Dakota,” Cramer said in a statement.
The rule could “destroy” development in the Bakken Shale, which is estimated to contain billions of barrels of recoverable oil, he said. “The rule does nothing to help the environment, plus states and the [Environmental Protection Agency] already have authority over flaring and venting,” Cramer said.
Another member of North Dakota’s congressional delegation, U.S. Sen. John Hoeven (R), is also pushing for a Senate vote and working behind the scenes to persuade undecided lawmakers.
The Obama administration’s methane rule is “duplicative, unworkable and will hamper job creation and economic growth in North Dakota,” Hoeven told Western Wire. “We need to pass this CRA and get to work on initiatives that will actually help our nation to produce more energy with good environmental stewardship,” Hoeven said in a statement. Those initiatives include “encouraging investment in natural gas gathering systems on public lands to help reduce flaring,” he said.
North Dakota’s only other representative in Congress, U.S. Sen. Heidi Heitkamp (D), has said she’s undecided. Cramer says he believes senators who are on the fence “will find their way to the right side of the issue.” Hoeven is also optimistic. “I think we’ll get there,” he told Politico last week. Heitkamp’s office did not immediately respond to a request for comment.
Cramer and Hoeven are part of a coalition of North Dakota officials who opposed the BLM’s venting and flaring rule and are now pushing to overturn it. Gov. Doug Burgum (R) has given his “strong support” to the CRA disapproval motion.
North Dakota Attorney General Wayne Stenehjem (R) is suing the federal government overturn the venting and flaring rule, along with his counterparts in Montana and Wyoming.
Last year, during the rulemaking process, the North Dakota Industrial Commission (NDIC) warned the new federal requirements conflicted with state rules on venting and flaring.
The additional cost and complexity would put the brakes on energy development in North Dakota, causing “an anticipated loss in state revenue from royalties and taxes estimated to be $24 million per year,” NDIC Director Lynn Helms said in testimony to Congress.
Those losses would continue over the expected 30-year timespan of Bakken oil development, Helms said, meaning the long-term hit to state revenue could exceed $700 million.
“We are hoping Senator Heitkamp, as a conservative Democrat and one who understands the energy industry, will vote with us,” Peterson told Western Wire last month.
The venting and flaring rule targets methane, the primary constituent of natural gas.
The Obama administration and environmental groups claimed the new BLM rule will prevent natural gas from being wasted, increasing production of the fossil fuel and resulting in more royalty revenue for federal state and local governments.
But critics of the rule say just the opposite will occur: The extra red tape will block many wells from being drilled and force others to prematurely shut down due to higher costs, resulting in lower oil and gas production and less royalty revenue.
Opponents of the Obama methane regulation argue that the BLM can curb venting and flaring more effectively by approving more pipelines to transport natural gas away from well sites to the markets where it can be sold.
But new pipeline projects have been opposed by the Sierra Club, the Center for Biological Diversity and other “keep it in the ground” activist groups – the same groups that have called the venting and flaring rule “a positive step” towards ending fossil-fuel production on public lands completely.
Critics of the venting and flaring rule also say the Obama administration ignored the oil and gas industry’s track record of reducing methane emissions.
Methane emissions have fallen 21 percent below 1990 levels without the BLM’s intervention, while at the same time, domestic oil and natural gas production soared by 28 percent and 52 percent respectively, according to data from the U.S. Energy Information Administration.
“BLM’s venting and flaring rule is a classic case of the federal government implementing a solution in search of a problem,” Tim Doyle, vice president and chief counsel of the American Council for Capital Formation (ACCF), said today. “Between industry advancements and work being done at the state regulatory level, states already have effective measures in place that have significantly decreased methane emissions,” Doyle said.
ACCF, a non-profit group focused on economic policy and its impact on the business community, has launched a multi-media campaign calling on the Senate to pass the CRA disapproval motion and repeal the Obama administration’s venting and flaring rule.
The campaign is focused on North Dakota, West Virginia, Ohio, Tennessee, Colorado, Indiana and Washington, D.C.
The ACCF campaign provides a series of cost estimates for the BLM venting and flaring rule: $114 million in lost tax revenue, roughly $1 billion in economic costs and the elimination of 3,580 jobs.
These estimates are based on economic analysis by John Dunham & Associates, which was commissioned by Western Energy Alliance.
The Alliance is a supporter of Western Wire.In North Dakota, political observers are watching Heitkamp’s position on the venting and flaring rule very closely. If she runs for reelection in 2018, Cramer – the Republican congressman – could be one of her challengers.
Heitkamp’s “fence sitting” on the issue is curious, according to conservative North Dakota newspaper columnist and radio host Rob Port. “Normally Senator Heitkamp can be counted on to understand these situations, and side with what’s best for North Dakotans,” Port wrote last month. “In fact, that level headed pragmatism on issues like this is a big reason why the Democratic Senator has managed to survive in the politics of this Republican-dominated state.”