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US suspends federal flaring restrictions until 2019

7 Dec 2017, 8.40 pm GMT

US suspends federal flaring restrictions until 2019

Washington, 7 December (Argus) — President Donald Trump's administration has delayed by a year a rule that would have required oil and gas producers on federal land to limit flaring and methane leaks starting on 17 January.

The US Bureau of Land Management (BLM) today said it was delaying that approaching compliance deadline because it believes the regulations would unnecessarily encumber oil and gas production and limit job creation. The rule would create a particular burden to marginal wells and threaten their economic viability, the agency said.

Industry groups say the delay of the compliance deadline until 17 January 2019 was especially needed because the Trump administration is planning to revise and rescind parts of the regulation. BLM's action provides "much-needed certainty" to oil and gas producers, Independent Petroleum Association of America president Barry Russell said.

But environmentalists say the delay is only the latest example of the administration aiding industry at the cost of public health. The rule would have used "common-sense" methods to reduce the waste of natural gas and the resulting air emissions, Clean Air Task Force program director Sarah Uhl said.

US producers sometimes flare natural gas so they can maximize production of more valuable oil, particularly in booming shale areas where gathering pipelines either do not exist or at full capacity. Producers also sometimes lose natural gas directly into the atmosphere if they lack leak detection programs or install high-emission equipment.

BLM, when former president Barack Obama was in office, sought to prevent natural gas losses on federal and tribal land by issuing a suite of regulations. BLM said those regulations, which were finalized last year, would prevent the waste of publicly-owned natural gas and avoid at least $209mn/yr in global costs from climate change.

But the Trump administration decided to delay the rules while it considered significant changes. BLM today said it was worried the rule would force marginal wells to shut down and it might not survive judicial review, since most its benefits related to environmental issues are outside the agency's traditional authority.

The delay will save producers about $110mn in compliance costs in 2019, BLM said, although operators will eventually have to make those investments unless BLM repealed the rule. At the same time, the delay will prevent $19mn in cost savings, from capturing otherwise wasted natural gas, and reduce federal royalties by $2.6mn.

BLM estimates the one-year delay will increase methane emissions by 175,000 tons and cause $26mn in climate damage in the US, based on an estimate called the social cost of methane. The Trump administration recently overhauled that estimate so it would no longer reflect the global climate damage, reducing its cost to $160/ton from $1,100/ton.

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