Consistent with the administration’s ongoing focus on methane emissions, the Bureau of Land Management (BLM) is initiating a process of inviting feedback for the anticipated rulemaking regarding Onshore Oil and Gas Order 9, Waste Prevention and Use of Produced Oil and Gas for Beneficial Purposes. The rulemaking is expected to focus on limiting waste from the venting and flaring of gas in the process of producing oil and gas on federal and Indian lands. The order is also expected to address what constitutes “beneficial use” and what standards would determine unavoidable losses or avoidable losses of resources in which royalties might be due. The order is probably more appropriately considered an update to the Notice to Lessees and Operators of Onshore Federal and Indian Oil and Gas Leases (NTL-4A), Royalty or Compensation for Oil and Gas Lost, which was signed in January 1980.

It is worth noting that while there has been a great deal of focus from the administration and the environmental community regarding environmental issues associated with fugitive emissions, the BLM’s authority actually emanates from its duty under the Mineral Leasing Act to minimize the loss of resources in which royalties might not otherwise accrue to the federal Treasury or Indian tribes. What the BLM chooses to do on this issue will likely be constrained accordingly, although ongoing interest on the broader topic from other federal agencies, including the Environmental Protections Agency (EPA), indicates that this rulemaking is not likely to be the only action at the federal level regarding the issue.