In their own words: Interior Department admits it’s helping oil and gas companies at the expense of taxpayers, clean air
After the Senate voted against killing methane safeguards, Secretary Ryan Zinke vows to finish the job
At the direction of Interior Secretary Ryan Zinke, the Bureau of Land Management has announced it will effectively eliminate a rule designed to reduce wasted natural gas from drilling operations on public lands. The BLM methane waste rule, finalized in 2016, required oil and gas companies to detect and repair leaks of methane, and to limit the venting and flaring of natural gas into the atmosphere. The common sense policy ensured more natural gas was captured and sold, instead of wasted as air pollution.
The oil and gas industry has long tried to get rid of the BLM methane rule, and the Koch-funded Freedom Partners highlighted it on the group’s wish list of policies to eliminate. Last year Secretary Zinke personally lobbied U.S. senators to kill the rule, but he failed, with the Senate voting down a proposal to do just that. Now, in keeping with his track record of implementing industry priorities at all costs, Zinke is set to finish the job himself.
However, a reading of the BLM’s own documents shows that eliminating the methane waste rule is a massive giveaway to oil and gas companies that will cost taxpayers millions of dollars.
In proposing to eliminate the methane waste rule, the BLM notes:
The proposed rule is expected to result in forgone royalty payments to the Federal Government, tribal governments, States, and private landowners. Over the 10-year evaluation period (2019–2028), we estimate total forgone royalty payments (from the baseline) of $26.4 million (NPV using a 7 percent discount rate) or $32.7 million (NPV using a 3 percent discount rate).
Translation: Eliminating the methane waste rule will cause taxpayers and landowners to lose between $26 and $32 million in royalty payments, because publicly-owned natural gas that would have been captured and sold will now be leaked, vented or flared into the atmosphere.
The proposed rule would result in forgone cost savings from natural gas recovery. Over the 10-year evaluation period (2019–2028), we estimate total forgone cost savings from natural gas recovery (from the baseline) of $629 million (NPV using a 7 percent discount rate) or $824 million (NPV using a 3 percent discount rate). The proposed rule also expected to result in forgone methane emissions reductions.
Translation: Killing the BLM methane rule will mean that oil and gas companies will recover and sell less natural gas. Over 10 years, the benefits of capturing that gas would have added up to $629–824 million.
The proposed rule would reduce compliance costs from the baseline. Over the 10-year evaluation period (2019–2028), we estimate a total reduction in compliance costs of $1.32 billion to 1.60 billion (NPV using a 7 percent discount rate) or $1.66 billion to 2.03 billion (NPV using a 3 percent discount rate). We expect very few compliance costs associated with the proposed rule, including the remaining administrative burdens.
Translation: Companies will save a lot of money — between $1.3 and $2.0 billion — by not having to detect and fix leaks, or reduce flaring and venting.
The proposed rule is estimated to result in positive net benefits relative to the baseline. More specifically, we estimate that the reduction of compliance costs would exceed the forgone cost savings from recovered natural gas and the value of the forgone methane emissions reductions.
Translation: Yes, more natural gas is going to be wasted, leading to smaller royalty payments for taxpayers and more methane pollution. However, oil and gas companies will save more money by not having to detect and fix methane leaks than taxpayers would miss out on by keeping the methane rule.
This is Secretary Zinke’s argument, and it’s shockingly honest. He is justifying eliminating the BLM methane waste rule by saying oil and gas companies will benefit more from methane pollution than the public will be hurt by it.
So what’s next? The Bureau of Land Management has put forward this proposal, but it is just that, a proposal. In the coming days, the BLM will open a public comment period to gather input, to which it must respond to in a final decision. Stay tuned for more information on how you can tell Secretary Zinke to protect taxpayers by leaving the BLM methane waste rule intact.
