February 3, 2023

AG Coalition Supports Bureau of Land Management’s Proposed Waste Prevention Rule

Lori Kalani, Bernard Nash

Cozen O'Connor

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Cozen O'Connor

A coalition of eight AGs submitted a comment letter in support of the Bureau of Land Management’s (BLM) proposed Waste Prevention Rule, which would impose obligations that oil and gas operators must undertake to avoid waste of oil and gas resources, particularly methane, through flaring, venting, and leaking on BLM-administered lands.
In the letter, the AGs note that the states have strong interests in the proposed rule and its implementation. Three of the states—California, New Mexico, and Colorado—have large amounts of BLM-managed lands within their borders and have active oil and gas leases on those lands. The other states—Connecticut, Maryland, New Jersey, New York, and Oregon—do not have active oil and gas leases on federal land, but the letter notes that they share an interest with the oil-and-gas-producing states in minimizing the waste of resources on public lands and in reducing methane emissions to combat climate change.
In addition to the specific, affirmative obligations on oil and gas operators to avoid wasting resources, the proposed rule would allow BLM to specify further waste reduction measures as a condition for approving drilling permits or ongoing exploration and production operations, require operators to submit waste minimization plans with drilling permit applications, clarify when oil and gas is considered “unavoidably lost” such that it is not subject to royalty payments, and establish monthly volume limits on royalty-free flaring.
The states assert that the proposed Waste Prevention Rule is a necessary update to outdated regulations that are more than four decades old. They argue that the proposed rule includes reasonable requirements that do not impose undue compliance costs on operators, are legally sound under BLM’s authority, will result in additional royalties to the states that will provide a financial benefit to the public, and will reduce methane emissions.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.