By Bruce Finley, The Denver Post |
Federal land managers’ rule aimed at reducing burn-off, venting and leaks by oil and gas companies that gain the right to operate on public lands took effect Tuesday after a federal judge rejected an industry challenge.
Oil and gas companies that obtain leases to extract oil and gas from federal public land now must take steps to control their emissions into the atmosphere.
For years, companies have disposed of methane gas they could not process by opening valves and venting it and by partially burning off or “flaring” gas because they did not put systems in place to capture the gas for sale or use it on-site. Bureau of Land Management data show that companies between 2009 and 2014 wasted enough gas to power 5.1 million homes for a year. They wasted gas on which they otherwise would have had to pay royalties to state, tribal and federal governments.
U.S. District Judge Scott Skavdahl in Wyoming on Monday rejected an industry effort to prevent the rule from taking effect. Skavdahl concluded it was within the authority of the BLM to set this rule, but his decision left open avenues for the oil and gas industry to continue to fight it. He has set an expedited hearing schedule to resolve the issue fully in the coming months.
Conservation groups joined BLM officials in defending the federal rule.
“We’re very pleased. This rule benefits taxpayers by generating more royalties, and it protects the environment by preventing the release of methane,” Earthjustice attorney Mike Freeman said. “It is in the public interest to make sure taxpayers get a fair return on oil and gas leases and to limit the release of methane that is a powerful greenhouse gas.”
Federal BLM officials issued the rule in November 2016 and industry leaders immediately challenged it seeking a preliminary injunction.
“It’s difficult to get a preliminary injunction, and while we’re disappointed the judge was not willing to stop the rule now, we feel that our chances are very good once the full merits of the case are heard,” Western Energy Alliance president Kathleen Sgamma said. “There were several statements in his ruling that show he’s extremely skeptical of BLM’s authority to regulate air quality. We’ll be driving those points forward in more detail in our brief due in March.”
The WEA and the Independent Petroleum Association of America filed the lawsuit seeking an injunction to block the rule on federal and tribal lands. Wyoming, Montana and North Dakota filed similar lawsuits, which were consolidated into the industry case.
Oil and gas companies in their push to prevent limits on venting, flaring and leaks argued that federal land managers’ action was an illegal “arbitrary and capricious” abuse of federal power. They also argued that the BLM is usurping power to regulate air pollution that Congress has given to the Environmental Protection Agency, in concert with state agencies that implement and enforce rules — not the BLM. They argue it is up to the EPA and states to set and enforce rules to limit pollution of the air on public lands.
The BLM rule encourages oil and gas companies to collect natural gas rather than vent, burn or leak it from out-of-date equipment — in line with established mandates to prevent waste. A phased implementation of the rule requires oil and gas producers to use available technologies and systems to reduce flaring by 50 percent at oil wells on public and tribal lands. Companies must periodically inspect their facilities for leaks and replace old equipment that releases large amounts of gas. The rule also limits venting from storage tanks and requires companies to use best practices to minimize leaks when removing liquids from wells.
Skavdahl in his 29-page decision wrote that, “at this point, the Court cannot conclude that the provisions of the Rule which overlap with EPA/state air quality regulations promulgated under CAA (Clean Air Act) authority lack a legitimate, independent waste prevention purpose or are otherwise so inconsistent with the CAA as to exceed BLM’s authority and usurp that of the EPA, states, and tribes.”
Last June, Judge Skavdahl ruled that the BLM lacks authority from Congress to regulate the oil and gas industry practice of hydraulic fracturing, or fracking. BLM officials have appealed that decision to the 10th Circuit Court of Appeals in Denver. Industry petitioners in that separate case are scheduled to present their arguments in March.