OVERVIEW: The below is BLM reasoning for the rule. HY-BON/EDI can help you through it. The Bureau of Land Management (BLM) has updated its regulations to reduce the waste of natural gas from flaring, venting, and leaks from oil and gas production operations on public and Indian lands. The final requirements, which will be phased in, will help curb waste of our nation’s natural gas supplies; reduce harmful air pollution, including greenhouse gases; and provide a fair return on public resources for federal taxpayers, Tribes, and States.
The BLM’s final rule requires oil and gas producers to take commonsense and cost-effective measures to reduce this waste of gas, modernizing the existing, more than 30-year-old oil and gas production rules and bringing them in line with technological advances in the industry. In addition, the rule modifies the existing royalty rate provisions to better align with the BLM’s authority and enhance flexibility, but the rule would not raise royalty rates.
FACT: The BLM’s onshore oil and gas management program is a major contributor to our nation’s oil and gas production. Domestic production from almost 100,000 federal onshore oil and gas wells accounts for five percent of the nation’s oil supply and eleven percent of its natural gas. In Fiscal Year 2015, the production value of this oil and gas was worth almost $21 billion and generated over $2 billion in royalties.
FACT: Large quantities of natural gas are wasted during oil and gas production. Between 2009 and 2015, oil and gas producers on public and Indian lands vented, flared and leaked about 462 billion cubic feet (Bcf) of natural gas. That’s enough gas to supply about 6.2 million households for a year. These losses create a myriad of problems, including: releasing harmful emissions, including methane, into the atmosphere; safety issues, if not properly handled; and waste of a valuable domestic energy resource.
FACT: Taxpayers are losing out. States, Tribes and federal taxpayers also lose royalty revenues when natural gas is wasted – as much as $23 million annually in royalty revenue for the Federal Government and the States that share it, according to a 2010 Government Accountability Office (GAO) report.
FACT: The rule minimizes waste of natural gas. The final rule will save and put to productive use up to 41 Bcf of gas a year – enough to supply up to about 740,000 households each year. Overall, the rule will reduce flaring by an estimated 49 percent and venting and leaks by roughly 35 percent (compared to 2014 rates).
FACT: Inaction is not an option. Methane, a powerful greenhouse gas about 25 times more potent than carbon dioxide, accounts for nine percent of all U.S. greenhouse gas emissions, and almost one-third of that is estimated to come from oil and gas operations. U.S. methane emissions are projected to rise substantially without additional steps to lower them. Several states, including North Dakota, Colorado, Wyoming, Utah and most recently Pennsylvania, as well as the U.S. Environmental Protection Agency (EPA), have also taken steps to limit venting, flaring and/or leaks.
FACT: The rule will reduce emissions that worsen climate change. BLM estimates that this rule could avoid an estimated 175,000-180,000 tons of methane emissions per year, roughly equivalent to 4.4-4.5 million metric tons of carbon dioxide emissions. This is also roughly equivalent to eliminating the greenhouse gas emissions from 924,000 to 950,000 vehicles.
FACT: The rule’s benefits are projected to outweigh its costs. Using conservative assumptions, the BLM estimates that the rule’s net benefits could range from $46 to $204 million per year. Benefits include revenues for operators from sale of recovered natural gas and environmental benefits of reducing methane emissions and other air pollutants.
FACT: Impacts to operators are expected to be minimal. Many oil and gas operators are voluntarily taking steps required in the rule to reduce wasted gas and improve operations. The BLM estimates that the annual cost to industry of implementing the rule will be $110-279 million. Individual, small business operators may see profit margins reduced by less than two- tenths of one percent, on average. About 40 percent of natural gas now vented or flared from onshore Federal leases could be economically captured with currently available technologies, according to the 2010 GAO report.
FACT: The rule reflects stakeholder outreach through public meetings and tribal consultations. The BLM conducted public and tribal meetings in 2014 and again in 2015 during the public comment period. The BLM received over 300,000 comments on the proposed rule. The BLM has also coordinated with individual states, as well as the Environmental Protection Agency, to avoid inconsistency or redundancy in regulations.
HY-BON/EDI’s TOTAL SOLUTION APPROACH
HY-BON/EDI’s engineered vapor recovery units (VRU), vapor recovery towers (VRT) and enclosed vapor combustion units (VCU) along with our IQR and Leak Detection and Repair (LDAR) services offer a complete package for operators to reduce their greenhouse gas emissions. Our testing and monitoring systems can set your baseline GHG emissions and track the reductions with real-time data.
If you have any questions on information presented above, please contact Jeff Voorhis at