Judge blocks federal flaring rule in 5 states

A federal judge has blocked the US Bureau of Land Management (BLM) from enforcing restrictions on the volume of natural gas that can be lost to flaring on federal lands in North Dakota, Montana, Texas, Wyoming and Utah.

Those states were likely to prevail in a lawsuit that said BLM was "arbitrary and capricious" in finalizing a rule that limited the amount of natural gas that producers could flare on federal land, US District Court for the District of North Dakota judge Daniel Traynor in North Dakota wrote in an order on Thursday. The judge issued a preliminary injunction blocking the rule in those states while the litigation is pending.

BLM said it was reviewing the court's ruling.

The ruling deals another blow to BLM's efforts to stop operators from flaring vast amounts of natural gas on federal land without paying any royalties. The agency tried to limit the practice through a rule in 2016, but a federal judge blocked those limits in 2020 for veering too far into climate policy, rather than focusing on a mandate to prevent waste of natural resources.

BLM's latest attempt at the rule sought to limit leaks from oilfield equipment, in addition to imposing strict limits on "royalty-free" flaring that would have started to apply in December. The agency expected the rule would capture an additional 1.2mn cf/d of natural gas and generate an additional $51mn/yr in royalties.

Traynor, in his ruling, said the flaring restrictions and other parts of the rule "add nothing more than a layer of federal regulation on top of existing federal regulation" and was not "reasonably explained". The judge faulted BLM for differences in the regulatory treatment of flaring and venting — releasing gas directly into the atmosphere — even though the two practices would result in the same volumes of natural gas lost to waste.

Oil and gas producers largely opposed BLM's regulations, which they argued were duplicative of other regulations and would raise operating costs. US senator John Hoeven (R-North Dakota) said the court ruling was welcome for stopping "overregulation that is handcuffing our domestic energy producers". Routine flaring is set to be largely prohibited under a separate methane rule from the US Environmental Protection Agency, but that rule will not fully take effect until 2029 at the earliest.

By Chris Knight