BLM Postpones Waste Prevention Rule

By: Michael K. Reer

On June 15, 2017, the U.S. Department of the Interior, Bureau of Land Management, published a notice of postponement of compliance dates in the Federal Register for the final rule “Waste Prevention, Production Subject to Royalties, and Resource Conservation.” Immediately after BLM published the Waste Prevention Rule in November of 2016, several industry associations filed petitions for judicial review, which are now consolidated in the U.S. District Court for the District of Wyoming. BLM states in the Federal Register notice that “[i]n light of the existence and potential consequences of the pending litigation, the BLM has concluded that justice requires it to postpone the compliance dates for certain sections of the Rule pursuant to the Administrative Procedure Act, pending judicial review.” According to BLM, new compliance dates will be announced at the conclusion of judicial review.

The Waste Prevention Rule is designed to reduce venting, flaring and leaks during production activities on federal and Indian lands by amending federal regulations that specify when produced gas lost through venting, flaring or leaks is subject to royalties. Operators must pay BLM royalties on natural gas flared in excess of the capture requirements stated in the final rulemaking. The final rulemaking also requires operators to inspect certain equipment twice a year, make timely repairs to any leaks found, and update certain equipment that BLM believes contributes to lost gas.
Friday, July 14, 2017

No Temporary Stay for BLM Flaring Rule


On January 16, 2017, the U.S. District Court for the District of Wyoming denied a motion for a preliminary injunction requested by three states and three trade associations that would have stayed the Department of the Interior, Bureau of Land Management’s “Waste Prevention, Production Subject to Royalties, and Resource Conservation” rule. Although the states and trade associations contend that the Waste Prevention Rule represents unlawful agency action because it exceeds BLM’s authority and is otherwise arbitrary and capricious, the District Court determined that the petitioners did not establish a “clear and unequivocal” right to relief.

BLM states

that the Waste Prevention Rule is intended to reduce waste of natural gas from venting, flaring, and leaks during oil and natural gas production activities on onshore federal and Indian leases. Specifically, the rule amends federal regulations with respect to when produced gas lost through venting, flaring, or leaks is subject to royalties. Any gas flared in excess of the final rule’s capture requirements is deemed an avoidable loss and subject to royalties. Moreover, the final rulemaking also requires operators to inspect equipment twice per year, timely repair any leaks found, and update certain equipment that BLM believes contributes to lost gas such as storage vessels, well maintenance, drilling, and completion.

Wednesday, January 25, 2017

Recent Posts

Tags

Archive

The Oil & Gas Law Blog is made available for educational purposes only and to give you general information as well as a general understanding of the law, not to provide specific legal advice. Use of this blog does not create an attorney-client relationship between you and any of the blog contributors or Harris Finley & Bogle. The Oil & Gas Law Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.