Update: BLM Rolls Back 2016 Methane and Waste Prevention Rule

The Bureau of Land Management on September 18, 2018, finalized a new rule that rescinds most requirements of the 2016 methane and waste prevention rule, which was designed to reduce waste of natural gas from flaring, venting, and leaks from oil and gas production on public and tribal lands.  The 2016 rule had the additional benefit of reducing air pollutant emissions that contribute to climate change and smog.

The notice said the 2016 rule "would have added regulatory burdens that unnecessarily encumber energy production, constrain economic growth, and prevent job creation."  The bureau reversed its 2016 finding that the benefits would exceed the costs of the rule, in part because the 2018 analysis only counted climate change benefits in the United States and ignored benefits elsewhere in the world.  In addition, the notice argued that the 2016 rule exceeded the bureau's legal authority and overlapped with EPA and state rules.  BLM said the new rule largely reflects its longstanding policies for venting and flaring that preceded the 2016 rule.

The attorneys general of New Mexico and California promptly filed suit to challenge the Trump Administration rule, arguing that it violates multiple statutes.  Environmental groups also denounced the Trump Administration action, saying it would increase air pollution and wasteful leaks, venting and flaring of methane to the atmosphere, increasing air pollution and reducing royalties.  David Doniger of the Natural Resources Defense Council told Reuters, "The Trump administration is relentless in its push to give the oil and gas industry multi-million-dollar handouts at the expense of Americans' health and environment."  

Proposed Repeal of BLM Methane Rule

Public comment closed April 23, 2018

See docket and read the proposal @ https://www.regulations.gov/docket?D=BLM-2018-0001

What’s at Risk and Talking Points

The BLM Methane and Waste Prevention Rule

The Bureau of Land Management (BLM) issued a rule in November 2016 to reduce waste of natural gas from flaring, venting, and leaks from oil and gas production on public and tribal lands.  The requirements are designed to limit waste of federal natural gas resources and avoid loss of royalty payments to federal, state and tribal governments for the sale of their resources.  The rule has the additional benefit of reducing air pollutant emissions that drive smog and climate change.  Methane is the dominant component of natural gas.  The rule replaced old and ineffective regulations that had not been updated in nearly 40 years.  

The Methane and Waste Prevention Rule sets flaring limits that over several years would gradually phase down flaring of natural gas and increase its capture and productive use. It requires oil and gas producers to inspect their operations for gas leaks using effective modern detection instruments, such as infrared cameras.  It also requires operators to use affordable technologies and practices to minimize gas venting.  

Many operators are voluntarily taking steps required by the rule to reduce flaring, venting and leaks because the technology is available, operators know how to do it, and it makes good business sense to sell natural gas rather than release it to the air.i  Nevertheless, wasteful natural gas emissions from oil and gas wells have been increasing, and there is no indication that voluntary action alone will solve the problem. 

The Trump Administration Rollback Proposal

On December 8, 2017, the BLM delayed implementation of almost every substantive provision of the Waste Prevention Rule for 18 months, until January 17, 2019.  Now the Trump Administration is proposing to remove almost all the substantive requirements of the Waste Prevention Rule.  In their place, BLM would reestablish, but weaken, the almost 40-year-old minimal requirements that had been in place before the Waste Prevention Rule.ii Those requirements were already proven to be a failure, as the waste problem developed while they were in place. According to BLM’s new and flawed economic analysis, the benefits of the Waste Prevention Rule had been over estimated, and the costs underestimated.  BLM further states that the old requirements would better align with the Trump Administration’s “priorities on energy development, job creation and reduced compliance costs.”iii  The BLM’s new proposal does not, however, claim to reduce natural gas waste, and the bureau concedes that the benefits (increased natural gas production and royalty revenues for tribes, states and the federal government) of the Waste Prevention Rule would not occur under the proposed approach.

Suggested Talking Points

Why the Rollback Is Misguided

Large quantities of natural gas are wasted during oil and gas production.  Between 2009 and 2015 oil and gas producers on federal and Indian land vented, flared or leaked about 462 billion feet of natural gas.  That is enough to supply about 6.2 million households for a year.iv This constitutes a waste of valuable energy resources that could otherwise be productively used. 

In addition, taxpayers, tribes and states lose out on royalties when natural gas is wasted.  The Government Accountability Office estimated that the federal government and states lose up to $23 million in royalty revenues annually from this waste.v For the many of the Indian tribes that own oil and gas resources, royalties from production are an important portion of revenues.vi   

In addition, this waste harms our health and the environment. We know that BLM’s rule is designed to protect against resource waste and royalty loss, but it has the additional benefit of reducing methane emissions as natural gas is largely made up of methane.  Methane is a potent greenhouse gas that contributes to climate change and smog.  To slow dangerous climate change, it is critical to control methane, which is 86 times more potent than CO2 over a 20-year period.vii  Natural gas contains other harmful gases as well, including benzene, a human carcinogen and other volatile organic compounds that have been associated with neurologic, reproductive and other health effects.viii 

We are aware that there are reasonable, readily available, and affordable ways to capture and sell natural gas instead of flaring, venting, or leaking it.  Fixing natural gas leaks is not expensive.ix Further, efforts to cut methane waste create jobs.  American entrepreneurs are creating innovative, cutting-edge technologies which make it economically feasible for the oil and gas companies capture methane emissions.x

Rescinding the 2016 rule, as the Administration proposes to do, would cost taxpayers, states and tribes millions of dollars every year, squander energy resources, pollute our air, and harm our communities.  Instead, we should implement the Waste Prevention Rule and put to use the natural gas that we save – that’s a win-win for taxpayers, states and tribes, households and industry, and our health and climate.

BLM, in part, justifies rescinding the 2016 rule with a claim that it is redundant with the EPA methane rule.  Contrary to BLM’s claim, the American people need the protection of the BLM methane rule in addition to the protection of the EPA methane rule.  As noted by a February 3 “CRS Insight” report by the Congressional Research Service the BLM and EPA differ in purpose and coverage. The purpose of EPA’s rule is to control of methane pollution.  The purpose of BLM’s rule is to avoid waste of public energy resources and loss of royalty revenue to governments.  EPA’s methane rule for the oil and gas sector only covers facilities constructed modified or reconstructed after September 18, 2015 – but BLM’s rule covers all facilities, both new and existing.    

While some sources are covered by both rules, the BLM rule provides an option for operators to comply with the EPA, state, local or tribal requirements in lieu of the BLM requirements when those entities have adopted potentially overlapping requirements that are at least as effective. 

Finally, BLM’s rule updates earlier BLM requirements to more clearly and specifically define when loss of gas is subject to royalties.  This isn’t addressed by EPA’s rule.

Contrary to BLM’s claims about “regulatory burden,” the 2016 rule’s reasonable steps to limit resource waste and royalty loss are an appropriate cost of doing business in a responsible manner.  They are a needed update to antiquated BLM regulations.  The agency’s 2016 analysis showed that the benefits of the rule far outweigh its costs. For this proposed rule, BLM has altered the original 2016 analysis of costs and benefits by, among other things:

over estimating the burden to comply with the 2016 rule;

ignoring the exhaustive peer reviewed process that established a social cost of methane emissions, BLM used a lower climate benefit from reduced methane emissions;

only counting climate benefits in the US when, in fact, US methane emissions impact the entire world (see attachment); and

totally ignoring the health benefits of reducing emissions of volatile organic compounds that the rescinded rule would have achieved.xi

Such a flawed analysis cannot be the basis of well-informed decision making. We urge BLM to leave the BLM 2016 rule in place.    

Considering Global, Not Just Domestic, Benefits of Pollution Reductions Is Essential to Protecting Americans

The Trump administration economic analysis only counts the climate-related benefits that the BLM methane rule would produce within the U.S., and ignores the large portion of benefits that would occur beyond U.S. borders. This alone dramatically reduces the calculated benefits.  In reality, each country's greenhouse gas pollution causes harm worldwide.

The domestic-only approach is wrong for several reasons.  First, it is wrong, factually and morally, to ignore the damage our pollution causes to people in other countries; it's not consistent with our values.  Second, it is economically misguided.  Counting only domestic benefits would likely lead to emission reduction policies that cure only a small part of the global market failure that provides economic incentives for huge amounts of greenhouse gas pollution -- and as a result, dangerous climate change would proceed.xii  Third, switching to a domestic-benefits-only approach is counterproductive to Americans' vital interest in effective action by all countries to cut climate-changing emissions.  To encourage other countries to account for the damage their pollution causes to our country, we must account for the damage our pollution does abroad.  Finally, ignoring international economic impacts and other international impacts is wrong because these impacts affect the United States -- for example, the effects of climate change are potentially destabilizing, making the world more dangerous and harming U.S. U.S. national security.

The repeal analysis discounts the lives, health and welfare of future generations more severely than recent federal analyses of environmental rules during the prior administration.  This too is morally troubling.  It encourages policy makers to make decisions that largely ignore the implications for future generations, rather than decisions that protect our children and grandchildren.

There Is More That You Can Do

It would be great if well-reasoned, fact-based comments were enough to win the day, but in today's deregulatory environment, raising the political stakes of regulatory rollbacks is crucial to stopping or slowing them down.  Submitting comments is a good first step. For rules that are particularly important to you, please consider taking one or more of the following steps, too. These methods can help to mobilize public opinion and spur elected leaders to fight the destructive changes that the Trump Administration is promoting.

Write to your members of Congress and other elected officials.  Let them know your concerns and ask them to weigh in on this rollback, and speak out publicly in favor of the Methane and Waste Prevention Rule.  These links make it easy to write your members of Congress (your representative in the House of Representatives and your two senators).  If you're willing to register with Countable, this link --  https://www.countable.us/ -- allows you to identify your members of Congress and send a message to all three at once.  Or, you can write them separately -- you can use https://whoismyrepresentative.com/ or https://www.usa.gov/elected-officials/ to find your members' email contact forms or snail mail addresses. 

Write letters to the editor and even op-eds in your local papers.  Letters to the editor should be fairly brief.

Organize or participate in campaigns to make phone calls or write letters to members of Congress, and make phone calls to radio stations during call-in days, or take other actions to spread the word.

Inform your local officials about these issues, and ask them to make a public statement or submit comments on a proposed rollback if your jurisdiction has a stake in these issues.  Bring up these issues at town hall meetings.

Spread the word via social media.  Tag your elected officials so they know how you feel.

Join or organize demonstrations.

Talk to your friends, colleagues and neighbors and encourage them to join in this effort. 

Vote.

Links for More Information

NRDC fact sheet on BLM methane rule: https://www.nrdc.org/sites/default/files/media-uploads/blm_methane-hill_factsheet-final_2017_01_13.pdf

EDF web page on methane waste on federal lands: https://www.edf.org/climate/federal-rules-target-costly-waste-methane 

BLM’s October 5, 2017, proposed rule to delay compliance dates: https://www.federalregister.gov/documents/2017/10/05/2017-21294/waste-prevention-production-subject-to-royalties-and-resource-conservation-delay-and-suspension-of

BLM’s November 18, 2016, methane and waste prevention rule (official BLM title is “Waste Prevention, Production Subject to Royalties, and Resource Conservation”: https://www.federalregister.gov/documents/2016/11/18/2016-27637/waste-prevention-production-subject-to-royalties-and-resource-conservation

Congressional Research Service paper, “EPA’s and BLM’s Methane Rules,” February 3, 2017.  This paper compares similarities and differences in EPA and BLM methane rules. Available at: https://www.everycrsreport.com/reports/IN10645.html

ENDNOTES

[i]Total methane emissions across the oil and gas sector have been estimated to be worth $1.8 billion. Datu Research, The Emerging U.S. Methane Mitigation Industry, October 2014.  Based on EPA’s 2014 emissions inventory of 7.7m metric tons, multiplied by the 12-month average Henry Hub gas price from August 2013-September 2014 per the EIA of $4.38/mcf.

[ii]Weaken the older rule because it would defer to state rules on flaring requirements, however ineffectual they might be. 

[iii]Bureau of Land Management Press Release, “BLM Offers Revision to Methane Waste Prevention Rule”, February 12, 2018.

[iv] Fact sheet on Methane and Waste Prevention Rule https://www.doi.gov/sites/doi.gov/files/uploads/methane_waste_prevention_rule_factsheet_final.pdf

[v] GAO, Federal Oil and Gas Leases Opportunities Exist to Capture Vented and Flared Natural Gas, Which would Increase Royalty Payments and Reduce Greenhouse Gases, October 2010,

http://www.gao.gov/products/GAO-11-34

[vi] US Department of the Interior Natural Resources Data:Revenue from natural resources on Indian land, 2017, https://revenuedata.doi.gov/how-it-works/tribal-revenue/

Latham & Watkins, DOI Identifies Burdens to Energy Development on US Tribal Land, Clean Energy Law Report, 2017, https://www.cleanenergylawreport.com/environmental-and-approvals/doi-identifies-burdens-to-energy-development-on-us-tribal-land/

[vii] Different greenhouse gases (GHGs) can have different effects on the Earth's warming. Global Warming Potential (GWP) was developed to allow comparisons of the global warming impacts of different gases. These metrics may differ based on timeframe, the climate endpoint measured, or the method of calculation. The metric used here is over a 20-year period. Another commonly used metric is that methane 25 times more potent than CO2 over a 100-year period. Scientists have other metrics as well. 

See https://www.epa.gov/ghgemissions/understanding-global-warming-potentials#Learn%20why for a discussion.

[viii] CDC, Center for Disease Control and Prevention, Facts About Benzene, https://emergency.cdc.gov/agent/benzene/basics/facts.asp

Mount Sinai Children’s Environmental Health Center, What to Know About Volatile Organic Compounds (VOCs), https://www.mountsinai.org/static_files/MSMC/Files/Patient%20Care/Children/Childrens%20Environmental%20Health%20Center/Fact%20Sheet%20-%20VOCs.pdf

[ix] In a survey done in Colorado gauging the industry’s reaction to that state’s methane rule, most -- seven in ten -- thought the benefits outweighed the costs and only one in ten thought that the cost was a lot more than the benefit to the company.  Memo from Chris Keating, Keating Research, for the Center for Methane Emissions Solutions, The Colorado Case Study on Methane Emissions: Conversations with the Oil and Gas Industry, April 10, 2016. https://mail.google.com/mail/u/0/#inbox/15d5c6748d609a6e?projector=1

[x] There are currently at least 76 American firms in the methane mitigation industry at 531 locations in 46 states with 102 manufacturing sites. Datu, op.cit., p.23

[xi] BLM, Regulatory Impact Analysis for the Proposed Rule to Rescind or Revise Certain Requirements of the 2016 Waste Prevention Rule, Available at www.regulations.gov, search for the docket folder under RIN 1004-AE53.

[xii] Technical Support Document on Benefits of Reducing GHG Emissions, U.S. Environment Protection Agency, June 12, 2008, p. 5, citing for example a 1995 article by economist William Nordhaus: Nordhaus, William D. (1995). “Locational Competition and the Environment: Should Countries Harmonize Their Environmental Policies?” in Locational Competition in the World Economy, Symposium 1994, ed., Horst Siebert, J. C. B. Mohr (Paul Siebeck), Tuebingen, 1995.

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