Putting Billions in Royalties at Risk

by Kathleen Sgamma, Vice President of Government and Public Affairs on February 2, 2016 - 12:02pm

venting and flaring natural gasThe Bureau of Land Management's (BLM) proposed venting and flaring rule is a classic case of penny wise and pound foolish. Claiming the rule is necessary to collect an additional $17 million in royalties annually, BLM is imposing a rule with a total cost to industry between $125 million to $161 million.

Only by government accounting would so little return be considered “cost effective.”

But by imposing such a high cost for such a small return, BLM is putting much greater annual royalties at risk, since the rule will further drive operators off federal and Indian lands. In effect, BLM is putting $4.1 billion at risk while chasing a mere 0.4% of annual royalties.