Interior proposes methane waste prevention rule for oil and gas on federal lands

Biden Oil and Gas Leases
FILE – A flare burns natural gas at an oil well on Aug. 26, 2021, in Watford City, N.D. A new federal report released Friday, Oct. 29, 2021, says fossil fuel extraction from federal lands produced more than 1 billion tons (918 million metric tons) of greenhouse gases last year. (AP Photo/Matthew Brown, File) Matthew Brown/AP

Interior proposes methane waste prevention rule for oil and gas on federal lands

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The Interior Department is proposing new regulations to limit emissions of methane produced on federal oil and gas leases, adding to the slate of new rules already in the works to crack down on the greenhouse gas.

Interior announced a proposed rule Monday that seeks to limit the venting and flaring of natural gas, which emits methane, the primary compound in natural gas, into the atmosphere. The rule would require lessees operating on federal lands to develop “waste minimization plans” to be submitted alongside drilling applications.

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It would also establish a general rule that “operators must use all reasonable precautions to prevent the waste of oil or gas developed from the lease” and require the payment of royalties on gas vented or flared — venting is the release of raw excess gas, and flaring is the burning off of gas. The rule would be meant to incentivize operators to capture and sell the gas instead of getting rid of it.

Operators vent and flare for a number of reasons, including in situations where they don’t have the capacity to capture and take away gas due to a lack of access to pipelines or where capture is otherwise deemed uneconomical.

Interior estimated the proposed rule would generate $39.8 million per year in additional royalties, which are paid to the government, and suggested compliance costs could be offset by revenues earned on gas that would otherwise be flared.

The Biden administration has prioritized the mitigation of methane emissions, joining the United States in a “global methane pledge” ahead of the COP26 climate conference in 2021. The pledge commits the U.S. to a 30% reduction of its methane emissions by the decade’s end.

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The Inflation Reduction Act, the Democrats’ green energy and health bill passed in August, created a new methane fee schedule to charge producers for emissions above a specific threshold.

The Environmental Protection Agency is pursuing regulations of its own to require more aggressive methane monitoring.

A number of large producers support direct regulation of methane, although some smaller producers have opposed new rules.

Environmental interests have advocated more aggressive rules.

“We need standards that end the waste of taxpayer-owned energy resources that has become far too routine on federal and tribal lands across the U.S.,” Jon Goldstein, the senior director of regulatory and legislative affairs at the Environmental Defense Fund, said in a statement Monday.

© 2022 Washington Examiner

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