The Obama administration issued a new rule on Tuesday to crack down on methane emissions from natural gas drilling on federal lands, which is the administration’s latest 11th-hour environmental action that is likely to go straight to court before it goes into effect, according to industry groups and western drillers that immediately opposed it.
The Interior Department “lacks statutory authority for the creation of an air quality regulatory program, which has resided with EPA and the states since the 1970’s,” said Kathleen Sgamma, vice president of government affairs at the industry group Western Energy Alliance. She said the new rule has similar problems as the Bureau of Land Management’s previous rule for fracking wells that was defeated in the courts.
“We don’t need federal rules to tell us to reduce methane emissions, as it’s the very product we’re working so hard to capture and sell,” said Sgamma. “The venting and flaring rule is just as egregious as BLM’s hydraulic fracturing rule, and we’re confident it will similarly be overturned by the courts.”
The new Interior Department rule updates three decades of regulations for controlling methane emissions and flaring at drilling sites located on public lands.
The rule requires oil and gas companies to use a host of new technologies to cut methane flaring in half, and replace old equipment and maintaining a robust inspection regime, all of which will likely have a sizable price tag, say observers. It also puts in place a new royalty program to collect fees from drillers, which industry said is not necessary and will only add costs to an industry still reeling from a global supply glut that has cut tens of thousands of jobs.
The independent natural gas drillers say the regulations are completely unnecessary and ignore industry’s own efforts to cut flaring and reduce methane emissions by 21 percent since 1990, and increase gas production by nearly 50 percent in that time frame.
At the same time, the industry argues that the Interior Department’s Bureau of Land Management has no authority to direct industry to take such actions. They argue that the proper agency would be the Environmental Protection Agency working side-by-side with the states.
An official with the Independent Petroleum Association of America said the “11th hour shot by an administration” shows that the government “doesn’t fully understand how its rules impact our businesses.”
“Furthermore, potentially raising royalties on an industry that has been financially hurting is counterintuitive to any business certainty,” said Dan Naatz, senior vice president for government affairs with the petroleum group.
“The continued regulatory onslaught on American producers calls into question the president’s commitment to the laws requiring mineral production on federal lands or whether the misguided crusade to ‘Keep It in the Ground’ has overtaken this administration,” Naatz added.
Assistant Secretary for Land and Minerals Management Janice Schneider at the Department of Interior said the rule “will benefit the American public and the environment” and responds to recommendations made by several government studies, as well as stakeholder and tribal input.
“The result is an effective rule that not only gets more of our nation’s natural gas into pipelines, but also reduces pollution and cuts greenhouse gas emissions,” she said.
