Oil companies collect crude in tanks by their pumps but often vent the methane gas that also comes up out of the ground into the air, unwilling to invest in the infrastructure to capture it.
While the companies pay royalties to landowners for the liquid petroleum they take, no payments are made for the vented methane, a wasted resource that is more than 80 times more effective at warming the atmosphere than carbon dioxide.
Oil companies also burn methane at the wellhead through a practice known as flaring, either to reduce pressure as a safety precaution or, more typically, to dispose of unwanted natural gas that surfaces as a byproduct of oil extraction. Methane is the primary component of natural gas.
Federal regulators have struggled to rein in this massive source of greenhouse gas emissions through venting and flaring. A new rule advancing at the Bureau of Land Management proposes to charge oil producers for the gas they release or burn on federal and Indigenous land.
But the proposal falls short of the Biden administration’s commitment to eliminate regular venting and flaring by the oil and gas industries by 2030 through investments in innovations to create more environmentally friendly infrastructure for fossil fuel extraction.
Instead, the rule would require oil and gas operators to submit waste minimization proposals to the BLM and would charge royalties on gas when it is flared or vented in certain circumstances. It would also encourage operators to adopt technologies for capturing the gas.
The proposed regulations would replace those currently in place and will officially become law after the agency reviews public comments and makes necessary revisions. The BLM estimates the rule will be released by the end of 2023. The current rules are outdated, according to the agency, and thus unfit to address the amount of flaring occurring on federal and Indigenous lands.
The new rule is intended to increase the financial pressure on oil producers to reduce carbon emissions. But environmental advocates say it provides so many exemptions that it is largely toothless and call the rule a missed opportunity to eliminate venting and flaring.
The new rule requires royalties to be paid to federal, state and tribal governments on some of the fossil gas that is released into the atmosphere but would not require flared or vented gas to be captured and used and does not abolish routine flaring, as Colorado and New Mexico have done in the last three years.
Living near oil or gas operations increases the risk of a variety of health problems.
Methane emissions and flaring at oil wells produces air pollution that can lead to respiratory and cardiovascular problems, and can also contaminate groundwater. If the gas is not properly controlled and managed, it can also pose an explosion risk.
Methane is also a significant driver of climate change. Though the gas has a shorter lifespan in the atmosphere compared to carbon dioxide, it is 86 times more powerful than CO2 at warming the atmosphere over a 20-year period.
To avoid royalties under the new rule, venting and flaring must meet criteria that includes releases in emergency situations, gas that can be used to economically benefit lease operations and that which is “unavoidably lost,” such as through undetected leaks in the well equipment. The exemptions, defined so broadly, provide companies with far too much wiggle room, environmental organizations say.
The BLM says the royalties imposed by the new rules will economically benefit both the communities impacted and American taxpayers, and will also help to lower pollution.
“There are a lot of benefits here that are worth noting,” BLM Deputy Director Nada Wolff Culver said. “It will avoid venting and flaring, which will avoid pollutants, and the emission of methane, which has significant climate impacts.”
The BLM estimates that the new rule will increase royalty revenues by $39 million per year, roughly half of which would be returned to the state in which the lease is located, helping ensure a fair return for taxpayers.
The agency also estimates that the reduced methane emissions would provide a monetized benefit to society of approximately $427 million per year in the form of avoided climate damages.
In the proposal for the rule, the BLM states it chose not to require gas released by oil wells to be captured because that process would be too difficult to regulate and not necessarily better at controlling waste or drawing royalty payments. Opponents say it is irresponsible not to adopt capturing technologies that are currently available.
For tribal communities across the country, which bear the health burden of routine flaring, the proposed rule is a disappointment. Both flaring and venting, beyond their impact on climate change, pose serious health threats to nearby residents. Flaring releases a variety of hazardous air pollutants, including volatile organic compounds such as benzene, and contributes to ground-level ozone, a pollutant that causes respiratory illness and heart disease.
There is a disconnect between the federal government and tribal communities, said Mario Entencio, a board member of Diné Citizens Against Destroying our Environment (CARE) based in New Mexico. On the Navajo Nation in Arizona, where CARE headquarters is located, he said, methane emission rates are more than double the national average.
“They aren’t embracing science,” he said. “There is still deep environmental racism.”
With oil and gas facilities disproportionately located in and near their communities, Native Americans face greater risks from pollution generated by the extraction of the fossil fuels than other populations, resulting in dramatic health disparities and the dismantling of tribal culture.
“The United States has deeply dishonored itself,” Entencio said.
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Lisa Finley-Deville, a North Dakota state representative and board member of the Dakota Resource Council and Fort Berthold POWER organization, is using her position in government to address the major environmental damage from the oil and gas industry that she sees in her home state.
“It started with the flaring,” Finley-Deville said. “I wanted to know how it was affecting the area. I’ve seen snow that is yellow because of fly ash, so when a lady called me to tell me that her house was yellow, I became concerned.”
Finley-Deville has begun conducting her own research on the impacts that flaring and venting have had on her reservation.
“My tribe was fed the idea that we would become rich by getting oil wells on our land, but we grew up poor,” she said.
When gas is “unavoidably lost,” and no royalties are paid on it, mineral owners like those who Finley-Deville represents lose out on potential profits.
“We were very poor. Now we are losing money because of the flaring,” she said.
In response to public concern, Earthjustice, an environmental justice organization, requested in January that the BLM hold a public hearing to discuss the complexities of the new rule. The Earthjustice letter was signed by more than 30 organizations, including Fort Berthold POWER. Robin Cooley, an Earthjustice senior attorney, said it was sent in the hopes of creating a more open line of communication between the affected communities and the federal agency.
“It is the very definition of waste to allow oil and gas companies to simply burn millions of cubic feet of federally and tribally owned gas every year,” said Cooley, who authored the letter. “There is no reason that they should not be considering required capture rather than just assessing royalties.”
The BLM did not formally respond to the letter, so a public hearing will not be held. The period for public comment ended on Jan. 30 and officials are now reviewing all submitted feedback before drafting a final proposal.
Organizations including Earthjustice expect flaring from the oil and gas industry to continue on public and tribal lands under the new rule with minimal flaring reduction and loss of income due to the broad royalty exemptions outlined in the rule, leading to what they say will be continued degradation of the health and culture of nearby communities and warming of the global climate.
“The BLM rule needs to be strengthened to eliminate routine flaring,” Finley-Deville said. “That is all we have asked for.”