The Colorado Petroleum Council (CPC) today urged federal lawmakers to repeal a last-minute Obama administration rule targeting oil and natural gas development on federal lands. The rule, aimed at restricting methane emissions, has angered tribal, business and local officials from across the state.
“The flawed rule doesn’t improve upon successes in U.S. methane emissions reduction, and could have a negative impact not only on industry, but consumers, local revenues and energy security as well,” CPC executive director Tracee Bentley said on a conference call today with reporters.
The CPC’s comments are part of a rising tide of opposition to the so-called venting and flaring rule in Colorado. Western lawmakers are leading an effort in Congress to repeal the rule, which was imposed by the U.S. Bureau of Land Management (BLM) two months before President Barack Obama left office. A disapproval motion under the Congressional Review Act passed the U.S. House last month, and the Senate may take up the repeal measure as early as next week.
Recently, the Republican majority in the Colorado State Senate also endorsed the repeal effort. “It is clear in many cases operators will be forced to prematurely abandon wells, consequently reducing royalties to the Federal government and severance tax to the States,” Senate President Kevin Grantham, Senate Pro Tem Jerry Sonnenberg and Senator Ray Scott, chairman of the chamber’s select committee on energy, wrote in a letter to U.S. Sens. Cory Gardner (R) and Michael Bennet (D).
“We will not stand for additional shortages in these types of funding due to a flawed rule recklessly put in place in the last days of the Obama administration,” the state lawmakers said. On today’s conference call with reporters, Bentley echoed this concern. “These declining revenues would directly impact state and local governments, and such a drop in [oil and gas] production would reduce the availability of affordable energy to consumers,” she said.
Methane is the primary constituent of natural gas, and under the Obama administration, the BLM and its supporters argued the rule would prevent waste. But critics of the rule say it imposes overlapping and damaging restrictions on oil and natural gas development on public and tribal lands, and the additional red tape could threaten energy revenues that fund essential public services.
As Western Wire has previously reported, other stakeholders to speak out against the venting and flaring rule include the Southern Ute Indian Tribe, Colorado Association of Commerce and Industry, Club 20, and the Grand Junction Chamber of Commerce.
CPC, a division of the American Petroleum Institute, also joined the Colorado Oil & Gas Association, West Slope Colorado Oil & Gas Association and Western Energy Alliance this month in co-authoring a letter urging Gardner and Bennet to support the repeal of the venting and flaring rule.
“The BLM methane rule will have damaging consequences not only for our industry, but for rural communities across the West,” the four trade associations wrote. BLM claims the rule will increase federal royalties for natural gas by $17 million per year, but even this small figure is inflated, the groups said. An economic analysis by John Dunham & Associates “estimates the BLM rule would capture less than $4 million in new royalties but at a staggering cost of $1.26 billion,” they said. The analysis was commissioned by the Alliance, which is a supporter of Western Wire.
Bentley – the CPC executive director – told reporters today the “redundant, flawed and unnecessary rule” also ignores the track record of oil and natural gas producers in reducing emissions.
Last week, the U.S. Environmental Protection Agency (EPA) released an updated greenhouse gas inventory showing major reductions in methane emissions from the oil and natural gas sector. Oil and gas-related methane emissions fell 21 percent from 1990 to 2015, the report said. Yet, over the same period, domestic oil and natural gas production have soared by 28 percent and 52 percent respectively, according to separate data compiled by the U.S. Energy Information Administration.
Across the broader economy, increased production of natural gas “is the main reason why energy-related carbon emissions in the U.S. have fallen to levels not seen since the early 90s,” Bentley said.
