The U.S. District Court for Wyoming recently overturned the 2016 Waste Prevention Rule (2016 Rule; often referred to as the Venting and Flaring Rule), which placed strict limitations on methane emissions at oil and gas facilities located on public and tribal lands. The methane emissions restrictions were meant to prevent oil and gas operators from wasting natural gas, which is largely comprised of methane, through flaring and venting. As part of the 2016 Rule, the Bureau of Land Management (BLM) identified when produced gas, extracted on Federal and Indian leases, would be subjected to royalties and proposed the ability to enforce measures to capture and sell the most methane possible.
When did the 2016 Waste Prevention Rule go into effect and what’s its current status?
The 2016 Rule was never fully implemented due to a series of administrative and judicial interventions. Upon publishing of the 2016 Rule, states with considerable BLM-administered oil and gas development filed petitions for judicial review. The U.S. District Court for Wyoming stayed implementation of the 2016 Rule pending finalization of the BLM’s voluntary revision of the 2016 Rule.
The BLM issued the 2018 Revision Rule on November 27, 2018, which repealed key provisions of the 2016 Rule and reinstated pre-2016 regulations. A coalition of groups and states filed lawsuits challenging the 2018 Revision Rule in the U.S. District Court of Northern California. On July 15, 2020, the District Court of Northern California ruled in favor of the plaintiffs and ordered the 2018 Revision Rule be vacated. The Court stayed vacatur until October 13, 2020, indicating the 2016 Rule would come into effect on October 13, 2020 unless it was stayed or vacated by another court before that date. On July 21, 2020, the U.S. District Court for Wyoming lifted the stay on their original suit against the 2016 Rule, allowing Wyoming to continue its objection to the 2016 Rule. On October 8, 2020 the U.S. District Court for Wyoming vacated the 2016 Rule holding that the BLM exceeded its statutory authority and acted arbitrarily and capriciously in promulgating the new regulations, generally finding that the 2016 Rule was primarly an air regulation and therefore under the jurisdiction of the Environmental Protection Agency (EPA), not the BLM.
What would have been required under the 2016 Waste Prevention Rule?
The 2016 Rule intended to reduce the amount of natural gas wasted through venting, flaring, and leaks during oil and gas production on federal and tribal lands. The 2016 Rule also aimed to clarify under what circumstances gas lost through venting, flaring, or leaks would be subject to royalties. The following were key items identified in the 2016 Rule as ways operators would be expected to prevent waste.
- Operators must submit a “waste minimization plan” with any Application for Permit to Drill (APD) an oil well.
- Operators must capture a certain percentage of the gas they produce.
- Operators must minimize emissions from pneumatic equipment and storage tanks.
- Operators must implement leak detection and repair (LDAR) procedures.
Some operators would have been allowed exemptions from the ruling if the ruling would “cause the operator to cease production and abandon significant recoverable oil reserves under the lease.”
What requirements are now in place?
After the two court rulings, the 1980 Notice to Lessees 4A (NTL-4A) is now back in effect. NTL-4A allows for short-term venting and flaring from Federal and Indian oil and gas leases for reasons noted in the document, with appropriate documentation and reporting.
Interested in learning more about evolving regulations?
Trihydro has a team of experts dedicated to staying current on the latest changes in regulatory requirements. If you would like to learn more about recent regulatory changes and what they mean for your site or facility, contact us today.
Jeremy Sell, P.E.
Business Unit Leader, Air and Process Services