The US Department of the Interior announced a final rule from the Bureau of Land Management that aims to curb the waste of natural gas during the production of oil and gas on federal and Tribal lands. This final rule modernizes regulations that are more than 40 years old and aims to hold oil and gas companies accountable by requiring measures to avoid wasteful practices and find and fix leaks while ensuring that American taxpayers and Tribal mineral owners are fairly compensated through royalty payments.
By building on technological advances and best management practices to help reduce waste, the rule is expected to generate more than $50 million in additional natural gas royalty payments each year to the federal taxpayer and Tribal mineral owners while conserving billions of cubic feet of gas that might otherwise have been vented, flared, or leaked from oil and gas operations.
“This final rule, which updates 40-year-old regulations, furthers the Biden/Harris administration’s goals to prevent waste, protect our environment, and ensure a fair return to American taxpayers,” said Interior Secretary Deb Haaland. “By leveraging modern technology and best practices to reduce natural gas waste, we are taking long-overdue steps that will increase accountability for oil and gas operators and benefit energy communities now and for generations to come.”
Since the 1980s, as the pace of oil and gas development on public lands has rapidly expanded, the percentage of natural gas lost to venting (the intentional release of natural gas) and flaring (the burning of vented natural gas) has more than doubled. Between 2010 and 2020, the total venting and flaring reported by federal and Indian onshore lessees averaged approximately 44.2 Bcf/year, enough to serve more than 675,000 homes.
The final rule responds to a series of US Government Accountability Office reports highlighting revenue lost due to the BLM’s outdated regulations. Several states, including Colorado, New Mexico, Pennsylvania, and Wyoming, as well as the US Environmental Protection Agency, have taken steps to limit venting, flaring, and leaks from oil and gas operations either for purposes of preventing waste or improving air quality. The BLM rule is separate and distinct from the EPA rule and ensures that operators can comply with applicable state, Tribal, or federal rules while meeting these commonsense requirements.
“This rule represents a common sense, fair, and equitable solution to preventing waste that provides a level playing field for all of our energy-producing communities,” said BLM Director Tracy Stone-Manning. “The BLM worked extensively with a wide range of stakeholders to modernize our decades-old regulations and help protect communities across the country.”
The rule modernizes the BLM’s existing regulations to require current technology and practices to better account for the waste of natural gas. It requires operators of federal and Indian oil and gas leases to take reasonable steps to avoid natural gas waste from the very beginning of operations, carry out leak detection and repair across ongoing operations, and cut down on wasteful gas venting and flaring. Consistent with the Inflation Reduction Act, the rule also sets new limits on royalty-free flaring so that public and Tribal mineral owners are properly compensated through royalty payments for avoidable losses of natural gas.