Why the BLM methane rule works for industry and taxpayers
Interior Secretary Ryan Zinke was in North Dakota recently addressing the North Dakota Republican Convention.
Conspicuously, during his 14-minute speech, he avoided mentioning his day job as land manager of America’s vast and spectacular national public lands, including the energy development that happens on those lands. He also didn’t mention his work to repeal guidelines that ought to be saving taxpayers tens of millions of dollars by preventing the waste of the public’s natural gas resources and supporting good-paying jobs in the methane mitigation industry.
The Trump administration’s recent decision to roll back the Bureau of Land Management’s (BLM) Methane Waste Prevention Rule is startling. The rescission of this common-sense regulation is wasteful, misguided and harmful to America’s economy, and economies throughout the West. Overturning this rule now could be disastrous, resulting in more government waste and the loss of good-paying jobs in a growing industry. It would jeopardize the emerging American methane mitigation industry by introducing a tremendous amount of uncertainty at precisely the time when employers around the country are hiring thousands of workers to handle the growing demand in states like North Dakota.
Before the new rule was finalized in 2016, methane leaks and natural gas waste on public lands were governed by an informal notice to federal leaseholders issued in 1979. Under this outdated standard, large quantities of natural gas, which is primarily methane, were being leaked into the atmosphere. Because the leaks occur on public lands, the wasted gas costs the American public money in the form of lost royalties — payments the federal and state governments receive from companies that drill on public lands. In fact, in 2014 alone, the gas lost from public lands had a sales value of over $444 million and a royalty value of $56 million. Between 2009 and 2015, federal and Indian onshore wells vented or flared (purposeful burning) enough gas to serve more than 6 million households for a year.
As you can imagine, the process of drilling for oil and gas as well as the technology available to reduce leaks has changed dramatically in the 40 years since that first notice was issued and today much of this gas can be economically captured.
In 2010, the nonpartisan Government Accountability Office found that around 40 percent of the gas being vented and flared from onshore federal leases could have been economically captured with the use of control technologies already available. Today, there are over 130 companies based in the United States that produce and service methane mitigation technologies, with 500 different facilities in 45 states. Because cost-effective, efficient solutions exist, the BLM, along with considerable input from industry, established a common-sense rule in 2016 to reduce the amount of methane wasted each year on public lands.
Despite some oil and gas lobbyists and special interest groups calling for its repeal, the BLM methane waste rule can work for the oil and gas industry. The rule is based in large part on a much stricter and more comprehensive methane rule adopted, with the support of leading members of industry, by Colorado four years ago. That rule has been remarkably successful, reducing leaks by 75 percent as production continued to rise.
Moreover, one study showed that oil and gas industry players believe the rule’s benefits — reduced waste, new revenue from the sale of captured methane, better worker safety, and increased operations efficiency — outweighed its costs.
As an added benefit, it led to the creation of new high-paying, blue-collar maintenance jobs in the oil and gas industry. There is no reason to expect the BLM rule won’t have the same impact across the West, including states like North Dakota.
The Trump administration should think seriously about states where methane mitigation companies and oil and gas companies are working together to address methane waste in a cost-effective manner.
Upending common sense polices just for the sound bite it produces can be satisfying in the short-term but can also create long-term instability for our economy. Zinke should keep the methane waste rule on the books.
Isaac Brown serves as executive director of the Center for Methane Solutions. Previously, he served as an energy advisor to several senior members of Congress on energy issues.