BLM Proposes New Regulations to Reduce Natural Gas Flaring and Leakage

On November 30, 2022, the Bureau of Land Management (BLM) proposed new regulations to reduce the waste of natural gas from venting, flaring, and leaks during oil and gas production activities on Federal and Indian leases. The proposed regulations would replace the BLM's current requirements governing venting and flaring, which are more than four decades old.

Vented or leaked gas contributes significantly to climate change, because the primary constituent of natural gas is methane, an especially powerful greenhouse gas, with climate impacts roughly 28-36 times those of carbon dioxide (CO2), if measured over a 100-year period, or 84 times those of CO2 if measured over a 20-year period.

The BLM anticipates the regulation will have the following economic impact:

• Costs to industry of around $122 million per year (annualized at 7 percent);
• Benefits to industry in recovered gas of $55 million per year (annualized at 7 percent);
• Increases in royalty revenues from recovered and flared gas of $39 million per year; and
• Benefits to society of $427 million per year from reduced greenhouse gas emissions.

However, an earlier BLM regulation, the "Waste Prevention Rule," was struck down in Wyoming v. DOI, 493 F. Supp. 3d 1046 (D. Wyo. 2020) after a finding that the rule was inappropriately supported by “climate change benefits" and exceeded BLM's statutory authority. These new regulations take a different approach. While BLM has published a separate Regulatory Impact Analysis discussing the benefits derived from GHG reductions, BLM argues that requirements of this proposed rule reflect reasonable measures to avoid waste that could be expected of a prudent operator, irrespective of any impacts with respect to climate change.

The BLM will accept comments to this proposed rule until January 30, 2022.