BLM issues rule for oil and gas flaring, venting
FARMINGTON – The Bureau of Land Management today announced the final version of a rule intended to reduce the amount of flaring, venting and leaking of natural gas from oil and gas operations on public and tribal lands.
The regulations include having oil and gas producers use current technology and processes to reduce flaring at oil wells, conducting periodic inspections for leaks, and replacing outdated equipment that discharges large quantities of gas into the air.
The rule will be phased in over time and final gas capture targets do not apply until 2026, according to information posted on the BLM website.
The rule, which was announced in a press release from the U.S. Department of the Interior, updates 30-year-old regulations and is meant to reduce methane emissions. Federal officials say it will ensure a public resource isn't wasted, increasing tax revenue to fund public projects and profits for operators. Critics in the industry say it requires a significant investment during a time when the price of gas is persistently low, depressing production and revenue.
Local oil and gas producers expressed disapproval for the rule.
George Sharpe, investment manager with Merrion Oil and Gas Co., said if the methane rules apply to every well, the older wells will be shut in, which will decrease the amount of royalties collected by the federal government.
"As written, I think it will hurt the San Juan Basin because we got 30,000 old wells that are going to be very, very expensive to retrofit and not all of those are going to make the cut," Sharpe said.
He added it is possible the final rule could be reversed by the Trump administration.
In an email response to questions from The Daily Times, BLM spokeswoman Kimberly Brubeck said, regardless of election outcomes, the Interior Department is expected to carry out laws that guide its responsibility to be a steward of public lands, water and wildlife.
"We believe the next administration will recognize the benefits of reducing waste, boosting natural gas supplies, and obtaining fair returns for public resources, which are associated with this rule," Brubeck wrote.
The BLM release stated the final rule is part of the Obama administration's goal to reduce methane emissions from oil and gas by 45 percent by 2025.
John Roe, engineering manager with Dugan Production Corp., said the Obama administration does not understand how the oil and gas industry operates because flaring and venting is part of the process required to produce a marketable product.
"There is no wasteful release of gas. ...The BLM, in making this regulation, is trying to curb something that doesn't exist," Roe said.
A number of environmental groups and four members of New Mexico's congressional delegation applauded the final ruling in statements issued today.
San Juan Citizens Alliance Executive Director Dan Olson said the rule saves money and resources but it also protects the climate and health of communities.
"Sitting, as we do, under the highest concentrations of methane emissions in the nation, residents of the Four Corners are uniquely appreciative of the administration's efforts to curb excessive methane emissions," Olson said in a press release.
U.S. Sens. Tom Udall and Martin Heinrich and U.S. Reps. Ben Ray Luján and Michelle Lujan Grisham hailed the decision saying it will save taxpayers money and energy resources and reduce harmful emissions cause by natural gas venting, flaring and leaks.
In a joint press release, the federal lawmakers said that the outdated requirements have cost taxpayers $43 million in lost revenues since 2009 costing the state's overall economy more than $100 million.
They also expressed concern about the concentration of methane over the Four Corners area.
"These new rules will allow us to cut waste in half so we can use that saved natural gas to power our economy, and the additional revenue to invest in schools, roads, bridges and other infrastructure," the release states.
The final rule was developed after the BLM conducted meetings, including for tribal members, in 2014 and in 2015 during the public comment period for the draft rule.
More than 300,000 comments were received on the proposed rule, according to the BLM.
Noel Lyn Smith covers the Navajo Nation for The Daily Times. She can be reached at 505-564-4636.