Check Your Facts, WEA—BLM Rule’s Benefits Match Projected Costs

Recently, industry reps over at the Western Energy Alliance (WEA) spread some misinformation around regarding the Bureau of Land Management’s proposed rule to cut back on natural gas waste. Let’s get the facts straight—the rule, which is a win for taxpayers and public lands, has significant economic benefits.

Unfortunately, WEA seems to be a little confused on those numbers. A recent blog post from them stated that the rule will cost industry $125 million, with return benefits of only $17 million annually. They link to BLM’s factsheet on the rule to support their claim—yet the factsheet’s numbers tell a very different story than WEA’s.

According to the BLM factsheet, released with the proposed rule, oil and gas operators can expect to see a minimal impact from implementing the rule—between $125 and $161 million annually. And when you look at the profits of WEA’s sustaining members last year–$12 billion—it becomes clear those costs are just a drop in the bucket.

The BLM factsheet also explicitly states that the rule’s benefits are projected to outweigh its costs. Even using conservative estimates, the BLM found that the rule’s net benefits would fall somewhere between $115 and $188 million annually. Last time we checked, that’s a lot higher than $17 million.

WEA should pick their battles a little more carefully—particularly when they, and other industry groups, are cavalierly throwing around millions of dollars annually. In fact, a recent story in the Denver Business Journal found that the industry group Coloradans for Responsible Energy Development is spending over $15 million annually on advertising and promotion. If WEA’s complaining about costs, that may be one place to cut them.

Finally, in this time of low oil prices where state budgets are really feeling the impact, it seems like oil companies should want to do right by taxpayers. Local and state budgets are feeling the strain of reduced royalty revenue—but reducing gas flaring is an easy way for industry to capture more gas for profit, and for taxpayers to receive an estimated $800 million in additional royalty revenue over the next decade.

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