The Department of the Interior today proposed new limits on methane emissions from oil and gas operations on federal lands. The new rule would require producers to limit oil well flaring, perform regular leak inspections and replace outdated equipment that emits large amounts of gas. The rule would also limit storage tank venting and require operators to use “best practices” to curb gas losses when removing liquids from wells.
The rule also addresses royalty rates, clarifying when operators owe the government for flared gases and giving the Bureau of Land Management (BLM) flexibility to set royalty rates at or above the current 12.5% rate with congressional authority.
The American Petroleum Institute said in a statement the new rule could stifle energy development on federal lands while offering few benefits. API upstream chief Erik Milito noted that crude oil production on federal lands remained flat between 2009 and 2014 and natural gas production has decreased by 35%. Meanwhile, oil production and natural gas production on private and state lands grew by 88% and 43%, respectively. BLM maintains that enough natural gas was lost through flaring between 2009 and 2014 to power more than five million homes for a year.
The proposal follows the administration’s decision last week to halt new coal leases on federal lands while it reviews the economic and environmental impact of mining in those areas.
Last August the EPA proposed new rules designed to reduce methane emissions by 40-45% of 2012 levels by 2025.
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