Implementation of the 2016 43 C.F.R 3179 Waste Prevention, Production Subject to Royalties, and Resource Conservation
UNITED STATES DEPARTMENT OF THE INTERIOR
BUREAU OF LAND MANAGEMENT
Grand Junction, Colorado 81506
https://www.blm.gov
September 9, 2020
In Reply Refer To:
3179 (310) P
EMS TRANSMISSION 09/09/2020
Information Bulletin No. 2020-028
To: All Field Office Officials
From: Assistant Director, Energy, Minerals, and Realty Management
Subject: Implementation of the 2016 43 C.F.R 3179 Waste Prevention, Production Subject to Royalties, and Resource Conservation
The purpose of this Information Bulletin is to update State and Field Offices on the status of the Bureau of Land Management’s (BLM) oil and gas regulations pertaining to the venting and flaring of gas.
On November 18, 2016, the BLM issued a final rule concerning, among other things, the waste of Federal and Indian gas through venting, flaring, and leaks (“2016 Waste Prevention Rule”), found at 81 Fed. Reg. 83,008 (Nov. 18, 2016). The rule replaced NTL-4A (Notice to Lessees and Operators of Onshore Federal and Indian Oil and Gas Leases, Royalty or Compensation for Oil and Gas Lost (Jan. 1, 1980)), the BLM’s prior regulation governing the royalty-free use of production and the surface waste of oil and gas. The 2016 Waste Prevention Rule became effective on January 17, 2017; however, due to a series of administrative and judicial interventions, the rule was never fully implemented.
Shortly after the 2016 Waste Prevention Rule was published, industry groups and certain states with significant BLM-administered oil and gas development filed petitions for judicial review of the 2016 Waste Prevention Rule in the U.S. District Court for the District of Wyoming. Wyoming v. DOI, Case No. 2:16-cv-00285-SWS (D. Wyo.). Ultimately, the court stayed implementation of much of the rule pending finalization of the BLM’s voluntary revision of the rule.
On September 28, 2018, the BLM issued a final rule substantially revising the 2016 Rule (“2018 Revision Rule”), found at 83 Fed. Reg. 49,184 (Sept. 28, 2018). In September 2018, a coalition of environmental groups and states filed lawsuits challenging the 2018 Revision Rule in the U.S. District Court for the Northern District of California. California v. Bernhardt, Case No. 4:18-cv-05712-YGR (N.D. Cal.). On July 15, 2020, the court ruled in favor of plaintiffs and ordered that the 2018 Revision Rule be vacated. California v. Bernhardt, No. 4:18-cv-05712-YGR, 2020 WL 4001480 (N.D. Cal. July 15, 2020). The court stayed vacatur until October 13, 2020. Id. Notably, the Wyoming v. DOI case was never dismissed. On July 21, 2020, the U.S. District Court for the District of Wyoming lifted the stay in that case. Briefing in the case was completed on September 4, 2020, and a decision is pending. Thus, the 2016 Waste Prevention Rule will come into effect on October 13, 2020, unless it is stayed or vacated by a different court before that date.
The 2016 Waste Prevention Rule applies to all onshore Federal and Indian oil and gas leases, units, and communitized areas. The rule has two major components: (1) rules governing the royalty-free use of oil or gas, and (2) rules intended to limit the waste of oil or gas, especially the waste of gas through venting, flaring, and leaks. The rules governing royalty-free use have been in effect since January 17, 2017. In addition to updating and codifying the NTL-4A requirements, the 2016 Waste Prevention Rule also imposes the following requirements:
- Operators must submit a “waste minimization plan” with any Application for Permit to Drill (APD);
- Operators must capture a certain percentage of the gas they produce;
- Operators must minimize emissions from pneumatic equipment and storage tanks; and,
- Operators must implement Leak Detection and Repair (LDAR) procedures.
Certain provisions allow operators to obtain exemptions or reduced requirements where compliance would “cause the operator to cease production and abandon significant recoverable oil reserves under the lease.”
To prepare for implementation, State and Field Offices should review the regulatory text of the 2016 Waste Prevention Rule. As cited above, that rule may be found at 81 Fed. Reg. 83,008 (Nov. 18, 2016). State and Field Offices should also ensure that all Inspection and Enforcement (I&E) personnel are notified of these developments.
Signed by: Authenticated by:
Nicholas E. Douglas Robert M. Williams
Assistant Director Division Regulatory Affairs,(HQ-630)
Energy, Minerals and Realty Management