Fact Sheet: BLM Proposed Rule on Methane Emissions
The Rule
· The Department of Interior’s Bureau of Land Management (BLM) recently released a proposed rule on venting and flaring, intended to decrease methane emissions during oil and natural gas development on federal and Tribal lands.
· An Associated Press report notes that “The Interior Department rule is part of the Obama administration’s target to cut methane from oil and gas drilling by 40 to 45 percent by 2025, compared to 2012 levels.”
· You can read the full rule here.
Chevron’s Perspective
· Chevron and the industry agree with the objective of reducing methane emissions. However, this proposed rule needs significant revision to effectively and efficiently achieve its stated goal. Specifically:
o The BLM should weigh the effectiveness of the proposed rule against the significant cost to operators. Industry analysis indicates that some of the rule’s most costly measures will result in minimal methane reductions.
o Implementation of the proposed rule could lead some operators to shut-in wells prematurely, decreasing the domestic oil and natural gas supply, and potentially driving up costs for consumers.
o The proposed rule would require that operators make updates to existing equipment, which is costly and less effective than ensuring that equipment on future operations is installed to updated standards.
Industry Perspective
· Methane emissions from the upstream oil and natural gas sector are about one-third of total U.S. methane emissions and only 3.4% of total U.S. greenhouse gas emissions.1
· Oil and natural gas producers already work toward minimizing methane emissions during our operations, and follow industry-wide best practices.
· According to EPA data, methane emissions from the oil and gas industry fell 17% from 1990 to 2012, while production grew 37%.
· As it is currently written, the rule could lead operators to shut-in wells prematurely, decreasing the supply of domestic oil and natural gas and reducing royalty revenues. The decrease in supply could also drive up energy costs for consumers or cause a shift away from clean-burning natural gas back to larger-emitting energy sources. This would be counterproductive.
· Natural gas – the principal component which is methane – is a product the industry sells into the market. Reducing methane emissions is aligned with good stewardship of the product and includes a natural financial incentive.
Additional Voices in the Debate
· American Petroleum Institute (API): “We share the desire to reduce emissions and are leading efforts because capturing more natural gas helps us deliver more affordable energy to consumers. The incentive is built-in, and existing BLM guidelines already require conservation. Another duplicative rule at a time when methane emissions are falling and on top of an onslaught of other new BLM and EPA regulations could drive more energy production off federal lands.”
· League of Conservation Voters (LCV): “Today’s proposal is a win all around: for our environment, public health, taxpayers, and our energy security. Once again the Obama administration has shown leadership in the fight against climate change, and we urge them to quickly finalize the strongest possible safeguards for our public lands.”
· Independent Petroleum Association of America (IPAA): “Imposing these new regulations will make it more expensive and harder for independent producers to operate, reducing America’s total energy production and preventing additional receipts from going back to the U.S. Treasury.”
1[2013 figures, EPA’s Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2014, Energy Chapter]