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Another Important Step Forward: BLM Proposes Long-Awaited Waste Rule

February 11, 2016

The U.S. Department of the Interior’s Bureau of Land Management’s (BLM’s) update to its decades-old regulations that address the waste of natural gas on Federally-managed land has been much anticipated. The wait is over—BLM’s proposed rule has finally been published, and there is much to be excited about in the rule.

Why is BLM’s proposal so important? Wasted gas from venting, flaring and leaks not only harms the health of local communities and cuts into the royalties paid by oil and gas operators, but it also contributes to the global problem presented by climate change because natural gas is largely composed of methane – a potent greenhouse gas. BLM’s current waste minimization policies, which date back to 1980, are insufficient because they were written long before the modern waste reduction technologies became available. A strong BLM rule would require operators to utilize the most effective available technologies to reduce waste. It would therefore not only increase the royalties paid, but it would also decrease the industry’s emissions of methane and other harmful air pollutants. The myriad benefits of such a rule present a rare opportunity for an agency, and it is one that BLM recognizes.

Once finalized, BLM’s proposed rule would represent a significant step forward. It would cover both new and existing equipment, ratchet down flaring, prohibit venting of gas from oil wells except in limited circumstances, require leak detection and repair, and ensure that operators will minimize waste from a broad range of other equipment.

Perhaps the most notable aspect of the rule is that it would address waste from sources that are located on both new and existing leases. Existing sources are not addressed by EPA’s proposed new source performance standards, despite the fact that those sources will account for the overwhelming majority of methane emissions in 2018. Though the scope of BLM’s rule is limited to existing leases on Federal land, BLM’s decision to address waste from existing sources further demonstrates that controls to address these sources are available.

Another important aspect of BLM’s proposal is the way it would address wasteful flaring. BLM proposes to establish a limit on flaring of associated gas from oil wells that, after a two-year phase-in, would require operators to flare no more than 1,800 thousand cubic feet (Mcf) per month (averaged across all of its wells – both new and existing – on a lease). Though some operators on existing leases may request a higher flaring limit, the operator would be required to provide cost and other data that shows how connecting the well to a pipeline, or utilizing other capture technologies, would be prohibitive. A Carbon Limits study commissioned by CATF suggests that, even if a pipeline is not available, many wellsites within 50 miles of a processing plant can capture gas using alternative methods like compressed natural gas trucking. For these wells, and wells even further from plants, natural gas liquids recovery and on-site power generation (to operate lift pumps and equipment) are feasible, proven ways of utilizing at least a portion of the gas from the well. Making operators consider these alternatives is an important step toward reducing flaring.

The proposal would also require operators to minimize waste by:

  • Replacing existing high-bleed pneumatic devices with low-bleed devices.
  • Performing leak detection and repair (LDAR) surveys at the wellhead, other facilities the operator operates, as well as compressors that the operator owns, leases or operates.
  • Routing vapors from new and existing storage tanks (and batteries) with VOC emissions of 6 tons per year or more to a combustion device, flare, or sales line.
  • Using practices to maximize recovery of gas for sale when performing liquids unloading or downhole maintenance events.

However, while the proposal would be a step forward, BLM must improve the proposal to truly minimize the waste of natural gas. Some examples of where BLM can strengthen the rule include:

  • LDAR Frequency. The best way to address super emitters is to require frequent surveys at a fixed rate (using OGI) at all oil and gas facilities. BLM’s proposal would vary depending on the number of leaks an operator discovers. Though BLM’s proposal may be more stringent than EPA’s proposed new source performance standards – EPA’s frequency varies depending on the percentage of leaking components rather than the number of components – both fail for the same reason: the magnitude of a leak, and thus the presence of super emitters, is not correlated with the number or percentage of leaks at a site. BLM should require inspections at a fixed rate, preferably quarterly, to minimize waste from leaks.
  • LDAR Technology. Optical gas imaging (OGI) is the most effective way to detect leaks, including those from super-emitters. However, BLM’s proposal would give operators with less than 500 wells on federal land the option of using portable analyzers to detect leaks in lieu of OGI (or a technology that matches its effectiveness). Surveys performed by portable analyzers are simply not as good at detecting “super emitters” – the small number of leaking components that account for the vast majority of leaked gas – so this carve-out for small operators is problematic.
  • Flaring Limit Exemptions. The proposal includes exemptions for certain existing wells that may limit the overall benefits of the rule. Specifically, the flaring requirements would grant renewable, 2-year exemptions for some existing wells located on leases that, among other factors, are more than 50 miles from the nearest processing plant, and it would allow other existing leases that would have difficulties complying with the flaring limit to request a higher limit. BLM should be transparent about all requests for a higher flaring limit and should narrow the length and number of renewals available for the exemption.
  • Pneumatic Controllers. BLM should also extend the coverage of pneumatic controllers to include intermittent bleed pneumatic controllers, and require the use of zero-bleed pneumatics where feasible.

Overall, BLM estimates that the rule would reduce methane emissions by 164,000-169,000 tons in 2020, in addition to the methane reductions that would be achieved by EPA’s new source performance standard proposal. BLM also estimates that the rule would cut flaring of associated gas by billions of cubic feet per year, which will conserve enough gas to heat hundreds of thousands of homes – while preventing millions of tons of carbon pollution per year. This represents real progress, and BLM can, and must, do more to minimize the waste of gas on Federal land—and we’ll be telling them as much in the upcoming public meetings.

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