The Interior Department's Bureau of Land Management (BLM) recently proposed to revise the 2016 final Waste Prevention Rule, known as the venting and flaring rule, due to its wastefulness, according to Interior Secretary Ryan Zinke. His agency is seeking to capture and sell the fuel instead of flaring it off or venting it to the atmosphere.
Zinke said oil and gas operations on federal lands soon could be offered a financial incentive to stop flaring natural gas and raised the possibility of reducing the royalties collected by the federal government and speeding up permitting times for pipelines and other infrastructure needed to get gas to market.
"Flaring is a waste," he remarked, speaking in Houston at CERAWeek by IHS Markit. He hopes to design a rule that ensures taxpayers get fair value for gas while not punishing industry. An estimated $330 million a year in methane is wasted through leaks or intentional releases on federal lands, enough to power about 5 million homes a year, officials say. Methane, the primary component of natural gas, is about 25 times more potent at trapping heat than carbon dioxide, although it does not stay in the air as long. Methane emissions make up about 9 percent of U.S. greenhouse gas emissions that contribute to climate change, according to government estimates.
Zinke described the Trump administration as a partner of the oil and gas industry, and commented, "The Interior Department should not be in the business of being an adversary to industry. We need to work on creating a regulatory framework that encourages innovation."
BLM described the Obama-era rule as costly, redundant and overly burdensome. In February, the Trump administration took its first step to loosen curbs on methane emissions and published a proposal seeking to wipe out the requirements that operators monitor and detect leaks of methane and capture and sell it instead.
API welcomed the Department of the Interior's proposal to delay certain requirements. "Natural gas and oil operators across the country share the Interior Department's objectives of conserving resources and preventing waste," said API Upstream and Industry Operations Group Director Erik Milito. "While the BLM's authority in this area is limited, we are taking action through innovation and technology advancements in our operations to successfully capture and reduce methane emissions, the main component of natural gas.
"We welcome BLM's efforts to get this right and encourage the agency to develop an achievable rule in the months ahead that serves to prevent waste and conserve resources while encouraging energy production on federal lands."
Zinke questioned the notion the administration was just "pro oil and gas," saying he believed in an "all of the above" energy strategy. He said it would put the U.S. on a path toward energy independence and help advance the nation's interests across the globe.
"I don't want to see your children have to deploy overseas to have to fight for energy," - Interior Secretary Ryan Zinke
He then mentioned March's "largest" offshore oil and gas lease sale. The auction was for areas in federal waters off the Gulf Coast. The Interior Department offered 77.3 million acres offshore Texas, Louisiana, Mississippi, Alabama and Florida for oil and gas development. The blocks are from 3-231 miles offshore and in waters 9-11,115 feet deep. Less than a year ago, a similar auction in the same body of water generated little interest from energy companies; the offer of 73 million acres received $121 million in high bids for 90 tracts covering 508,096 acres.
This sale is part of "American energy dominance," Zinke added. He elaborated on what this statement meant: producing energy in an environmentally responsible manner while also driving economic growth for the U.S. and its allies. He added it had a moral component, too.
"I don't want to see your children have to deploy overseas to have to fight for energy," Zinke said. "Affordable, readily available energy promotes peace."
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