By Valerie Volcovici and Nichola Groom
A 2013 photo shows a gas flare at an oil well site outside Williston, North Dakota. Methane is the main component of natural gas and tends to leak into the atmosphere from drill sites and pipelines, something the Biden administration's proposed new rules aims to counter. Photo: Andrew Burton / Getty Images / AFP
US President Joe Biden's administration has proposed rules aimed at limiting methane leaks from oil and gas drilling on public lands, Washington's latest move to crack down on emissions of the potent greenhouse gas.
The proposal complements new rules the US government already proposed for the industry on private lands. It would place monthly limits on flaring and require oil and gas companies to undertake methane leak detection programs for operations on federal lands, where nearly a tenth of US oil and natural gas production takes place, primarily in Western states.
The US Bureau of Land Management (BLM) said the rules would help prevent gas from being wasted and boost taxpayer returns.
"This draft rule is a common-sense, environmentally-responsible solution as we address the damage that wasted natural gas causes, BLM Director Tracy Stone-Manning said in a statement.
Methane is the main component of natural gas and tends to leak into the atmosphere from drill sites and pipelines. It is about 80 times more powerful at trapping heat than carbon dioxide during a 20-year timeframe.
The Interior Department said venting and flaring activity from production on public lands had significantly increased over several decades.
Flaring, or deliberately burning gas produced as a by-product to oil, releases carbon dioxide into the atmosphere, while venting releases unburned methane. Oil drillers tend to flare or vent gas when they lack pipelines to move it to market, or when prices are too low to make transporting it worthwhile.
The proposed rule would require each applicant for a drilling permit to submit a plan detailing how it would minimise methane waste. BLM could hold up the permit application if it found the plan inadequate.
An oil and gas industry group said federal methane regulation should be handled by the Environmental Protection Agency (EPA), which has been crafting its own rules.
"The issue is not as cut and dried as this regulation would make it seem as there are many reasons to vent and flare gas, such as safety concerns and connectivity issues," Mallori Miller, vice president of government relations for the Independent Petroleum Association of America, said in an email.
"Of course, it will always be in the best interest of a producer to capture and sell a commodity on the marketplace when at all possible."
The new rules follow years of legal wrangling over methane regulations crafted by former President Barack Obama's administration. BLM said its regulation focused on waste prevention, an area over which it has clear legal authority.
The rules will cost oil and gas companies around US$122 million (NZ$198m) per year to implement but will give them $55m (NZ$89m) per year of recovered gas. That gas will also boost royalty revenues paid to US coffers by $39m (NZ$63m) per year, according to BLM.
"There's no reason for oil and gas companies to waste a publicly-owned resource, much less a powerful greenhouse gas like methane," Aaron Weiss, deputy director of the Center for Western Priorities, said in an email.
- Reuters