Top 10: Highlights from U.S. Senate’s Venting and Flaring Hearing
by Kathleen Sgamma, Vice President of Government and Public Affairs on April 14, 2016 - 2:56pm
Today, I had the privilege of testifying before Senate committee Energy and Natural Resource Subcommittee on Public Lands, Forests and Mining in a hearing on the flawed venting and flaring rule proposed by the Bureau of Land Management.
As noted before, the deluge of regulations directed at the oil and natural gas industry is a deliberate political strategy of regulating American producers out of business. The agencies, in their rush to jam in as many regulations as possible before the Obama Administration runs out, aren’t able to fulfill their obligations to engage in deliberative regulatory processes based on sound science and data to demonstrate that environmental benefits are commensurate with the harm to economic opportunity.
That’s why Congress’ role in holding these oversight hearings is so important. They’re exercises in accountability that enable us to hear from Administration officials and better understand their strategies. We also use the information in perhaps our most effective tool against onerous rules, litigation.
The following are excerpts from my written testimony. Specifically, I point out that the proposed rule runs counter to President Obama’s climate change goals, that industry has significantly reduced methane emissions without new federal regulations, and BLM is overstepping its regulatory authority.
- The oil and natural gas industry has delivered significant greenhouse gas (GHG) reductions of its own accord. Methane emissions from oil and natural gas production have declined by 21% since 1990 without federal regulation, even as natural gas production has increased by 47%.
- BLM’s proposed rule would make natural gas development more expensive and time consuming, resulting in less American natural gas production than without the rule, which is directly counterproductive to the president’s climate change goals.
- The rule would have negligible impact on GHG emissions…By BLM’s most ambitious estimates, the rule would reduce approximately 0.0092% of global GHG emissions, a miniscule reduction.
- The effect of this rule in terms of driving more development off federal lands is more pronounced because it is just the latest in an onslaught of new regulations and policies from BLM…The Keep-It-in-the-Ground movement, which is trying to stop all oil and natural gas development on public lands, doesn’t really need to do much.
- Over the last year, Western Energy Alliance has responded to 48 regulatory processes involving 49,226 pages of regulatory documents from just EPA and the Interior Department.
- The rule is a broad new regulatory regime that goes far beyond BLM’s authority under the Mineral Leasing Act (MLA)…BLM is proposing to impose Clean Air Act-like controls without adhering to any CAA constraints, which even EPA in all its expansiveness does not dare do.
- The rule is extremely costly, even by BLM’s fundamentally flawed economic analysis. It would impose between $125 million and $161 million in cost on companies to capture a scant additional $11 million in royalties. To put it in perspective, $11 million is 0.3% of the $4.1 billion in royalties that the oil and natural gas delivered to the government in 2014. Only in government cost accounting would that be considered a cost effective rule.
- BLM seeks to impose a no venting standard that is not technically feasible in many circumstances, and could lead to unsafe drilling and completion practices. There are situations where gas must be vented to avoid potentially serious well control problems.
- BLM is also proposing to limit flaring of gas, with narrow exceptions, to 1,800 Mcf/month per well, regardless of the circumstances of the operations. This proposed standard was derived from Utah and Wyoming state rules for vertical wells in the 1980s that are not appropriate models for today’s highly productive horizontal wells.
- Because industry continues to reduce methane emissions and states are developing tailored solutions based on actual operating conditions, BLM should not move forward with a rule that exceeds its authority. BLM’s one-size-fits-all approach is not well suited to most public land states and redundant with EPA’s ongoing or planned regulations.