Federal court upholds block on venting and flaring rule

by Adrian C Hedden, Carlsbad Current-Argus
April 7, 2018

A Wyoming federal court judge suspended the Bureau of Land Management’s controversial venting and flaring policy this week, dealing a setback to environmentalists who supported the Obama-era regulations intended to reduced natural gas waste emissions by extraction producers.

The policy, formally known as the Waste Prevention, Production Subject to Royalties, and Resource Conservation rule had been upheld by a federal judge in California in February.

The competing opinions will likely mean the matter will be appealed.

The rule was intended to regulate the release of methane and other gasses during extraction activities to reduce the amount vented into the atmosphere or burned off through the flaring process.

More: New Mexico lawmakers spar over proposal to repeal venting and flaring rule

If enforced, it would require oil and gas producers to capture more of the gas instead of releasing it, which opponents argue would increase costs through additional infrastructure, leak prevention, and administrative reporting to the Department of Interior.

The suspension was first implemented in December 2017 by the U.S. Department of Interior, which oversees the BLM.

A joint motion to lift the suspension and enact the regulations was filed by North Dakota and Texas earlier this year.

Wyoming U.S. District Judge Scott Skavdahl ultimately ruled in favor of the Interior Department, blocking the petitioners’ attempts to lift the suspension as the department worked to revise the original regulations.

Skavdahl cited harm the rule could cause to the oil and gas industry if fully implemented in its original form.

“Petitioners, particularly Industry Petitioners, will be irreparably harmed by full and immediate implementation of the 2016 Waste Prevention Rule, magnified by temporary implementation of significant provisions meant to be phased-in over time that will be eliminated in as few as four months,” Skavdahl wrote.

More: Oil and gas industry celebrates Trump rollback of BLM venting and flaring rule

He also questioned if the states, or industry leaders, had authority to direct policy on federal land.

“The Court’s consideration of the various requests for relief must begin by recognizing that the BLM has the inherent authority to reconsider its own rule, in the same manner and pursuant to the same constraints as when initially promulgating the rule,” Skavdahl wrote.

“Wish as they might, neither the States, industry members, nor environmental groups are granted authority to dictate oil and gas policy on federal public lands.”

Opposition on both sides

Supporters of the rule contended the release of the gas not only damages the environment, but also wastes tax dollars in lost royalties by not sending the gas to market.

Since the rule’s inception in late 2016, oil and gas industry leaders challenged the regulations as a government overreach, which ignored both market needs and the individual needs of producers.

More: Balderas granted injunction to block repeal of venting and flaring rule

Ryan Flynn, executive director of the New Mexico Oil and Gas Association, said the rule was burdensome and a duplication of existing guidelines at the state level, and at the federal Environmental Protection Agency, which he said provide sufficient oversight.

Flynn worried such a burden could be too much for smaller producers, and many could go out of business.

“The BLM Venting and Flaring rule overlaps with regulations already adopted by the EPA and the State of New Mexico,” he said in a statement. “In New Mexico, where 56 percent of our oil and 63 percent of our natural gas come from leases on federal lands, the negative impacts of this redundant and ill-conceived regulation will be particularly severe.”

Despite support from New Mexican senators Tom Udall and Martin Heinrich, and the New Mexico Attorney General Hector Balderas, the venting and flaring rule was suspended indefinitely by the Wyoming court until the BLM devises a replacement rule.

More: Activists, industry debate impact of venting methane rule

In total, about 300,000 written comments were submitted in support of the rule, records show, and public hearings were held in New Mexico, Oklahoma, Colorado and North Dakota.

Camilla Feibelman, director of the Sierra Club’s Rio Grande Chapter said the court decision was not the end of the group’s work to ensure clean air in New Mexico, and legal action could be forthcoming.

“Although we are disappointed with the court’s decision, the fight for cleaner air and healthier communities is far from over, and we are exploring all our legal options,” she said. “Whether or not the Trump administration wants to alter this common sense safeguard, it remains on the books now and should be enforced as such.

“Sierra Club and its allies will continue to advocate on behalf of the millions of Americans who support this clean air protection.”

Protests continue

Protests of the rule’s rollback continued April 2 as the Sierra Club and other environmentalist groups staged a demonstration in Albuquerque.

A counter tracking tax dollars allegedly lost by wasted natural gas was projected on the exterior of a building at San Mateo Boulevard and Central Avenue.

The ticker projected on the building counted more than $1 billion of lost revenue since 2013.

“When industry wastes gas extracted on public lands they deprive New Mexico of huge amounts of royalties and put our kids health at risk,” said Bill Jordan, policy director for New Mexico Voices for Children. “At a time when the state is struggling we can’t afford to be losing tens of millions of dollars that could be put towards education.

“And even worse the methane gas emits with key components of smog, which leads to asthma and other respiratory diseases, resulting in lost days at school for children and their parents.”

Taxpayers for Common Sense, an independent financial watchdog group based in Washington DC, released a report on Tuesday alleging royalties were only collected on 11 percent of natural gas leaked vented or flared between 2007 and 2016 across the country.

More: Opposition grows against rollback of venting and flaring methane rule

The report comprised of data collected by the group through a Freedom of Information Act request submitted to the Office of Natural Resource Revenues, a subsidiary of the Department of the Interior (DOI).

President of the Taxpayers for Common Sense Ryan Alexander said the loss should not be acceptable for New Mexican taxpayers.

“Taxpayer dollars are literally going up in smoke,” he said. “We are losing hundreds of millions of dollars in wasted natural gas, while oil and gas companies skirt royalty payments federal taxpayers are rightfully owed, as the federal resource owners.”

More: Venting regulations could strain small oil and gas producers

Alexander accused the Interior Department of attempting to revert to previous regulations written before America’s recent oil boom.

“The administration is proposing turning back the clock on methane waste by scrapping new policies that would help recoup taxpayer losses,” he said. “It’s time to get serious and implement real changes in the way we manage our oil and gas operations so taxpayers receive the fair return they are due.”

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