Business Groups Attack Oil & Gas Flaring Rule
A new rule to reduce methane emissions by limiting venting and flaring from oil and gas operations on federal lands would “deprive manufacturers and other energy consumers of critical energy supplies, increase operating costs and threaten international competitiveness,” according to several business associations including the National Association of Manufacturers and the US Chamber of Commerce.
Developed by the US Interior Department’s Bureau of Land Management (BLM), the proposed rule would require oil and gas producers to adopt currently available technologies, processes and equipment that would limit the rate of flaring at oil wells on public and tribal lands, and would require operators to periodically inspect their operations for leaks, and to replace outdated equipment that vents large quantities of gas into the air.
Operators would also be required to limit venting from storage tanks and use best practices to limit gas losses when removing liquids from wells. The new measures would also clarify when operators owe royalties on flared gas, and ensure that BLM’s regulations provide congressionally authorized flexibility to set royalty rates at or above 12.5 percent of the value of production.
In a letter submitted to the Interior Department today, the trade associations say the proposed rule will be too costly and burdensome. They also say it fails to take into account technological and market realities and limitations. In addition to NAM and the US Chamber, the letter’s signatories include: American Iron and Steel Institute, Corn Refiners Association, Industrial Minerals Association – North America, Natural Gas Supply Association, National Industrial Sand Association, SPI: The Plastics Industry Trade Association and The Fertilizer Institute.
A 2010 GAO report, however, found about 40 percent of natural gas now vented or flared from onshore federal leases could be economically captured with currently available technologies.
The Obama administration has set a goal to cut methane emissions from the oil and gas sector by 40 percent to 45 percent from 2012 levels by 2025.
In addition to the venting and flaring proposal, the administration is taking other steps to limit the potent greenhouse gas. Last summer the EPA proposed new rules to limit methane emissions from new and modified sources in the oil and gas sector and said this month it will begin developing regulations to limit these releases from existing oil and gas wells.
Photo Credit: gas flaring via Shutterstock
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