Oil and gas industry makes bizarre argument against BLM natural gas waste rule

The latest argument by the oil and gas industry against the BLM’s methane waste rule is an interesting one. In an article for E&E News (paywall), energy industry insiders and allies make a strange case for why they oppose BLM’s new Methane Waste Rule.

Their argument essentially boils down to two oddly contradictory points:

1) They are already doing all they can to capture the methane gas they waste, so there is no need for a rule by BLM to force them to clean up, and

2) The BLM rule would be too darn expensive.

Both arguments are wrong, but by using both arguments together the industry is showing their true colors: they just want to do whatever they want, public land and taxpayers be damned.

But let’s step back and pretend that they are making a coherent argument.

Are they voluntarily cleaning up their act?

In a word: no.

First, their track record on voluntarily cleaning up their waste is not good. If we look at the EPA’s current voluntary program, the Natural Gas STAR program, has achieved a paltry 1% participation rate among those do-gooders in the oil and gas industry – not exactly worthy of a pat-on-the-back.

Second, any voluntary measures taken by the industry are not sufficient to capture vast amounts of wasted methane. A recent survey of 65 of the biggest oil and gas companies found that none (ZERO!) have even taken the first step in reducing methane waste by disclosing their intent to do so. In fact, less than a third of those companies even report their methane waste. So, I guess they’re asking us to just trust them?

Will BLM’s Methane Waste Rule be too costly?

This is just laughable.

To the contrary, the BLM rule will actually help the bottom line of many of these companies and boost the revenue from public lands benefiting every single taxpayer. The reason is simple; by capturing the methane that is currently wasted, the companies have another valuable product to sell.

According to a study by Conservation Economics Institute, the Methane Waste Rule will have a net positive impact on oil and gas production and revenue.  They looked at almost 9,000 low-producing wells in the San Juan Basin and found that determined that BLM’s rule will have little to no negative impact on these marginal wells. In fact, the measures will actually increase overall production and royalties paid to state and local governments.

Those findings support previous studies that capturing methane is very cost effective. According to a 2014 study, capturing most lost methane costs about a penny per thousand cubic feet of gas produced. And, more recently, the Center for Methane Emissions Solutions surveyed oil and gas producers in Colorado and found that 70 percent of them found compliance with that state’s methane-capture requirements to be very cost effective.

So, if capturing and selling wasted methane is a win-win for producers and taxpayers, why does industry oppose the BLM rule? That’s a good question. But one thing is for sure: it’s not because they’re already doing it and it’s not because it’s too costly.

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