Week Ending May 12, 2017

Senate Vote to Overturn Dept. of Interior’s Methane Rule Comes Up Short

This Article Appears as Published in Foster Report No 3148
Senate Vote to Overturn Dept. of Interior’s Methane Rule Comes Up Short

The Senate on May 10 came up one vote shy of overturning the U.S. Department of Interior’s Methane and Waste Prevention Rule that was finalized late in the Obama administration, frustrating producers that had been calling the rule costly and unnecessary.

No Democrats voted for the measure, a resolution to nullify the rule from the Bureau of Land Management (BLM) that was approved by the House of Representatives through the Congressional Review Act (CRA). The Senate vote of 49-51 had three GOP members, Sens. Susan Collins of Maine, Lindsey Graham of South Carolina, and John McCain of Arizona, join Democrats in voting against the resolution.

The rule requires producers to reduce accidental leaks of natural gas into the atmosphere on federal and tribal lands and to scale back intentionally flaring or venting gas during production operations on those lands.[1] It was made final in November of 2016 and had been a target for repeal since the election of President Donald Trump.

Without the use of the CRA, which has a time limit that expired on May 11, Interior will have to take action to change or revoke the rule, which will take much longer than if the Senate had voted to overturn it, since Trump had indicated he would sign the measure to overturn it.

“The vote today in the Senate doesn’t impact the Administration’s commitment to spurring investment in responsible energy development and ensuring smart regulatory protections,” Kate MacGregor, acting assistant secretary of Interior for land and minerals, said in a May 10 statement.

In line with Trump’s America-First Energy Strategy and executive orders to reduce regulation affecting energy production, “the Department has reviewed and flagged the Waste Prevention rule as one we will suspend, revise, or rescind given its significant regulatory burden that encumbers American energy production, economic growth and job creation,” MacGregor said.

The American Petroleum Institute, the Independent Petroleum Association of America (IPAA) and others expressed disappointment with the Senate vote and praise for the plan by Interior to review the rule.

Compliance with the rule will mean more costs for producers, shutting in smaller wells on federal lands, and less federal revenues stemming from royalties on federal lands, said IPAA President and CEO Barry Russell.

“We’re disappointed the Senate wasn’t able to stop President Obama’s unworkable rule by a federal agency that does not have the Congressionally-granted authority to regulate air quality,” Russell said in a May 10 statement.

IPAA looks forward to working with Interior to preserve royalties while developing a solution to achieve a safe, workable regulation “instead of this one-size-fits-all approach,” of the rule, Russell said.

IPAA and others shared concerns about the rule before it was finalized, but those concerns were disregarded, the producer group noted. IPAA and Western Energy Alliance have challenged the rule in court, asserting that the rule is heavily focused on emission reductions, which are outside of the authority of BLM, and that court case is pending.

The House in February passed a measure to repeal the rule, and the oil and gas industry said the rule is not needed as methane emissions have dropped even as gas production has soared.

In the Senate, Republican lawmakers commended Sen. John Barrasso (R-Wyo.) for his leadership in trying to overturn the rule, while Barrasso pointed out that two Senate Democrats, Sens. Heidi Heitkamp of North Dakota and Joe Manchin of West Virginia, sent a letter to Interior Secretary Ryan Zinke calling for BLM to scrap the rule.

“Letters to the secretary are nice, but when given the opportunity to immediately remove this punishing regulation, the Senators voted no,” Barrasso said in a May 10 statement.

“BLM’s rule is not necessary, not part of its core mission, and it will create higher economic costs, reduce jobs and revenues, and weaken our energy security,” Sen. Lisa Murkowski (R-Alaska) said in a statement.

McCain explained his vote against the measure to overturn the rule, noting that methane emissions are an important air quality issue and that some states are developing their own regulations for enhanced technology to capture them.

“While I am concerned that the BLM rule may be onerous, passage of the resolution would have prevented the federal government, under any administration, from issuing a rule that is ‘similar,’ according to the plain reading of the Congressional Review Act,” McCain said.

McCain believes that the public interest is best served if Interior issues a new rule to revise and improve the current rule, he said.

Environmental groups and a few Democrat lawmakers praised the Senate vote to uphold the rule. With so much increased oil and natural gas production in the last 10 years, making sure methane leaks and flaring are controlled makes sense and is effective regulation, said Sen. Maria Cantwell (D-Wash.).

With the Senate supporting the rule, it has the force of law and the Trump administration should support it, Cantwell said. “The Department of Interior cannot just decide to ignore methane pollution. The Senate refused to go along with the administration’s attempt to undo the rule and now the Department of Interior should enforce it,” she said.

By Tom Tiernan TTiernan@fosterreport.com

[1]   For background on the rule, see DOI Issues Final Rule to Reduce Methane Emissions & Wasted Gas on Public, Tribal Lands, FR No. 3125, pp. 1-8.

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