Addressing Costs of Methane Waste and Future Policy Actions

Slides:



Advertisements
Similar presentations
New Source Review NSR Reforms Oklahoma Department of Environmental Quality Air Quality Council Presented by Matt Paque, Attorney, ODEQ - AQD April 20,
Advertisements

Mission: Mission: To protect human health and the environment Primary services: Expertise DEC brings to the ACMP Primary services: Expertise DEC brings.
U.S. Environmental Protection Agency April 13, 2011 Final Rules to Reduce Air Toxics from Boilers.
2006 AP Government Free Response Question #3 Mark Power.
Anne M. Inman, P.E. Air Permits Division September 11, 2012.
FLARING AND VENTING CAN WE HARMONIZE PROVINCIAL DEFINITIONS? Industry Meeting April 17, 2012 Presented by Jim Spangelo and James Vaughan, ERCB and Kevin.
S-1925 Subsection t Stakeholder Meeting November 9, :30-2:30pm NJDEP Public Hearing Room 1 st Floor, 401 East State Street Trenton, NJ.
Garry Kaufman Deputy Director Colorado Air Pollution Control Division June 6, 2014.
Implementing the Environmental Fiscal Reform – Greening the State Budget in Lithuania Jurate Varneckiene Center for Environmental Policy, Vilnius, Lithuania.
1 Katy R. Forney Energy Sector Technical Authority Air Permits Section EPA Region 4 PSD and Title V Greenhouse Gas Tailoring Rule 14 th Annual Power Generation.
Highlights of Colorado’s New Oil and Gas Hydrocarbon Emission Reduction Rules - Adopted February 2014 Presentation to WESTAR May 2014 Will Allison Colorado.
1 Wetland Regulatory Programs Department of Natural Resources Legislative Audit Bureau July 2007.
HOUSING CHOICE VOUCHER PROGRAM PROJECT-BASED ASSISTANCE.
Marketable Securities
2015 Legislative Session Update: Tax Relief, Tax Law Changes & Tax Credits and Exemptions June 25, 2015 Ryan Rauschenberger Tax Commissioner.
CRISTINA LANNAO MILLET BIGLAEN SUPPLEMENTARY INFORMATION.
Office of Natural Resources Revenue U.S. Department of the Interior Industry ComplianceAccurate Revenues & DataProfessionalism & Integrity Federal and.
May 22, 2012 How We Managed an Oil Boom Williston Basin Petroleum Conference Presented by Cindy DeLancey.
Bureau of Land Management Solid Minerals Programs June 12, 2013.
Part 1.3 Mineral Rights & Leasing. Objectives After reading the chapter and reviewing the materials presented the students will be able to: Understand.
Limitations and Constraints on Marketing (1)
Managing Natural Gas & Oil Resources on Federal Lands on Federal Lands Colorado Bureau of Land Management.
U. S. Department of the Interior Bureau of Land Management Division of Fluid Minerals, 1.
New Air Quality Regulation “NSPS OOOO” Oil and Natural Gas Industry Workshop October 24, 2012 Robert Keatley, PE Senior Engineer/Supervisor DEP – Division.
Update on EPA Oil and Gas Activities Greg Green, Outreach and Information Division, OAQPS.
E&P STORM WATER OVERVIEW Domestic Onshore Energy E&P STORM WATER OVERVIEW Domestic Onshore Energy May 10, 2005.
Agency Drafts Statement of Scope Governor Approves Statement of Scope (2) No Agency Drafts: Special Report for rules impacting housing
[Legislative] [American policy] Passing of the Public Utility Regulatory Policies Act (PURPA) in Introduced competition within the supply sector.
EPA Overreach WATERS OF THE U S METHANE REDUCTION PLAN LEGISLATIVE /REGULATORY FORUM SEPTEMBER 16, 2015.
Alternative Energy on the Outer Continental Shelf Robert P. LaBelle Deputy Associate Director Offshore Energy and Minerals Management Minerals Management.
Office of Natural Resources Revenue U.S. Department of the Interior Industry ComplianceAccurate Revenues & DataProfessionalism & Integrity DOI Revenue.
Energy Exploration & Development On National Forest System Lands Barry Burkhardt
1 BLM’s Hydraulic Fracturing Revised Proposed Rule 2013 Virginia Governor’s Conference on Energy Richmond, VA October 16, 2013 Presented by: Luke D. Johnson,
Clean Air Act National Enforcement Initiatives Beverly A. Spagg May 22, 2012.
Update on EPA’s Greenhouse Gas Rulemakings Norman W. Fichthorn Hunton & Williams LLP 2010 American Public Power Association Energy and Air Quality Task.
Environmental Protection Agency (EPA)  Founded by U.S. government (under Richard Nixon) in 1970  William Ruckleshaus was first EPA administrator  a.
Realizing the Value of Public Assets Ensuring a Fair Return to Taxpayers January 28, 2016.
Staff Training & Interview Techniques Unit 2. Employer Responsibilities Building industry has many statutory requirements. The building industry makes.
Using VAT and Social Security Data in Compiling Economic Statistics in Ghana By Magnus Ebo Duncan.
Station Name CY 2014 AQS Data Certified CY 2015 AQS Data Certified Ute 167Y68Y Ute 367Y66Y Mesa Verde National Park65Y66 Bloomfield62Y61 Navajo Dam63Y68.
Samuel Short, Manager Air Permits Division Texas Commission on Environmental Quality.
EPA Methane Regulations Details on the Final Rules and Summary of Impacts May 16, 2016 Producer: Claire Carter Edited by: Afzal Bari Director: Afzal Bari.
Concepts for Proposed General Permit for Well Pads and Proposed GP-5 Modifications Citizens Advisory Council March 15, Tom Wolf, Governor John Quigley,
Bureau of Land Management Federal Coal Leasing Program Programmatic Environmental Impact Statement Scoping Meeting Supporting Text.
WHITE HOUSE COAL REPORT White House Report Highlights How Federal Lands Provide Significant Resources for the Coal Industry Market Share of Coal Produced.
Environmental Quality Board May 16, 2007
ONRR Overview and Updates Presented by: Jim Steward, Deputy Director
MAPPS BLM Update Washington, DC, March 2017
PASO Federal/Indian Royalty Compliance Workshop February 8 & 9, 2017
NSPS OOOOa Overview Photo from
PowerPoint presentation
Essentials of the legal environment today, 5e
Office of Enforcement Civil Penalties Update
Addressing Costs of Methane Waste and Future Policy Actions
Clean Air Act Glossary.
What we’ll cover: How EPA enforces the Clean Air Act, including permits Roles for tribal governments in enforcing NSR permits.
ARB GHG Oil & Gas Regulation
“There’s a problem? Says who?”
New Oil & Gas NAICS Codes
BLM SOLID MINERALS PROGRAM
Methane Emission Standards for Crude Oil and Natural Gas Facilities
Bureau of Ocean Energy Management
What we’ll cover: How EPA enforces the Clean Air Act, including permits Roles for tribal governments in enforcing NSR permits.
Curbing New Mexico’s methane pollution Opportunities for engagement
Federal Lands and Fossil Fuels
A presentation by: Rebecca Fischer & Daniel Timmons
Recent Louisiana Energy Legislation
JUSTICE ADMINISTERED FUND BILL [B ] BRIEFING OF THE SELECT COMMITTEE ON SECURITY AND JUSTICE ON 8 NOVEMBER 2016.
Environmental/Energy policy
Uinta Basin Industry BMPs Stuart Siffring
Presentation transcript:

Addressing Costs of Methane Waste and Future Policy Actions Ensuring a Fair Return to Taxpayers October 27, 2016

Energy and Natural Resources Federal Coal Leasing: Fair Market Value and a Fair Return for the American Taxpayer Fair Market Value for Wind and Solar Development on Public Lands Understanding Oil and Gas Tax Subsidies Burning Money: Updating Rules for Oil and Gas Loss on Public Lands Understanding Federal Subsidies for the Biofuels & Biomass Industries

Fair Return to Taxpayers Revenues from the collection of royalties from federally owned minerals represent one of the largest non-tax income sources for the federal government. Fair and accurate collection is necessary to ensure taxpayers are receiving what they are owed. Many of the rules governing different aspects of federal energy programs are decades old and have not kept pace with changes in energy markets and technology. In general, federal energy development systems should be aligned to conform to a consistent set of standards that will ensure taxpayers receive adequate compensation for federal resources.

Leasing on Federal Lands The Bureau of Land Management (BLM) within the Department of the Interior (DOI) administers mineral leasing on 245 million acres of public lands. In FY2014, the value of oil and gas production on federal lands exceeded $27 billion.

Natural Gas Lost on Federal Lands Increasing quantities of natural gas are wasted during oil and gas production. From 2006 through 2015, oil and gas operators lost at least 189.4 bcf of natural gas, with a market value of $951.3 million. 90 percent of this lost gas did not incur a royalty.

What are Sources of Methane Waste? FLARING: the process of burning off natural gas associated with oil or gas extraction deemed to be unprofitable to capture by operators. VENTING: Intentional or unintentional leakage of natural gas into the atmosphere. Venting occurs at a number of points in the oil and gas development process (well completion; well maintenance; pipeline maintenance; tank maintenance; etc.).

BLM vs. EPA: Different Mandates BLM is responsible for stewardship of public lands and resources (under Federal Land Policy and Management Act), and waste prevention (under Mineral Leasing Act). BLM rule covers new and existing sources of methane emissions from oil and gas on onshore federal lands. Ninety percent of emissions in 2018 are estimated to come from existing sources. EPA is responsible for air quality and climate pollution (under Clean Air Act). EPA’s proposed new limits on emissions of methane and volatile organic compounds (VOC) for oil and natural gas operations will cover only new and modified methane emissions sources nationally.

Existing Rules at BLM on Methane Waste: States, Tribes and federal taxpayers lose as much as $49 million annually in royalty revenue thanks to outdated federal policies. Notice to Lessees and Operators of Onshore Federal and Indian Oil and Gas Leases (NTL-4A): Adopted in 1980, pre-dates new techniques such as hydraulic fracturing Largely exempted oil and gas companies from royalty payments on gas that is wasted.

Problems With Existing Rules (NTL-4A) Rely on the subjective judgment of a BLM Supervisor or Authorized Officer about what is “prudent and proper” or “reasonable” to determine whether gas has been wasted and should incur a royalty. Criticized by the Government Accountability Office for: not providing specific instructions to operators for how to estimate the volume of lost natural gas; providing operators with only limited guidance on how they should record volumes of natural gas in the different categories on monthly reports; and not identifying which types of natural gas venting and flaring should be recorded on monthly reports.

How Does Proposed Rule Affect Taxpayers? Good: BLM is proposing to charge a royalty on gas that is flared from wells that are connected to capture infrastructure. Bad: No royalty charged for flaring from wells not connected to gathering infrastructure. Good: BLM proposes to set a flaring limit of 1,800 Mcf/month/well, averaged over all producing wells on a lease. Bad: The rulemaking needs to provide a more direct statement that all flaring above the flaring limit is subject to a royalty payment and possible penalties. BLM should charge royalties for all flaring of associated gas from all wells. Not charging royalties reduces the incentive to install or extend gas capture equipment.

How Does Proposed Rule Affect Taxpayers? Good: Venting prohibited, except emergencies and venting from certain equipment subject to proposed limits. Replaces all “high bleed” pneumatic controllers with “low bleed” controllers within one year. Good: Requires use of an instrument-based leak detection and repair (LDAR) program to find and repair leaks twice a year. Good: Modifies the existing regulation to give BLM discretion to raise the royalty rates for onshore oil and gas leases above 12.5 percent for new competitive leases, consistent with the statutory authority in the Mineral Leasing Act. Good: Requires submission of plan with an Application for Permit to Drill to also be shared with midstream gas capture companies. Bad: Waste minimization plan details would not be enforceable by BLM.

Other Concerns: Beneficial Use Oil and gas companies are also allowed to freely use gas from a well as fuel and for other uses on a lease site, known as “beneficial use.” No royalties are paid on this gas. From 2006 through 2015, oil and gas operators reported the “beneficial use” of 711.8 bcf of natural gas to power their equipment on federally-administered leases. This gas would have had a market value of $3.72 billion and generated $465.1 million in royalty payments.

Fair Return In 1976, Congress passed the Federal Lands Policy and Management Act (FLPMA), which requires “the United States receive fair market value of the use of the public lands and their resources ...” Congress further articulated BLM’s authority in the Federal Oil and Gas Royalty Management Act of 1982, which states, “Any lessee is liable for royalty payments on oil or gas lost or wasted from a lease site when such loss or waste is due to negligence on the part of the operator of the lease, or due to the failure to comply with any rule or regulation, order or citation issued under this Act or any mineral leasing law.” Next Steps For BLM - Finalize New Rule that ensures fair return for taxpayers and royalties are collected on all federally owned natural gas. For Congress - pass legislation that ensures taxpayers receive royalties for natural gas used in wellsite operations.