2022IADC, Regulation, and LegislationMarch/April

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IADC concerned over Bureau of Land Management’s missed Q1 lease sale deadline

In an 18 February news release, IADC  expressed its disappointment with the US Department of Interior (DOI) missing its 15 February deadline to schedule an onshore federal oil and gas lease sale for Q1 2022.

Under the Mineral Leasing Act, the Bureau of Land Management (BLM) is required to hold federal onshore lease sales once per quarter and must provide at least a 45-day notice. Despite these well-defined requirements – as well as recent rulings in US federal court that further affirm these requirements – the Q1 deadline passed without a sale being scheduled.

IADC remains deeply concerned that the DOI lacks a fundamental respect of the requirement to conduct federal lease sales in a timely manner.

As the world faces growing energy demands and a rapid increase in fuel prices, the administration seems oblivious to the fact that holding regular federal lease sales is a tool the government can leverage to directly address those challenges.

RRC launches database for flaring, venting applications

The Texas Railroad Commission (RRC) launched a new online database of flaring and venting applications. The Flare/Vent Exceptions Query is part of a years-long effort to improve public access to the RRC’s information.

Updated nightly, the query makes available all applications for exception to Statewide Rule 32 (SWR 32) that have been filed electronically with the agency since 2 May 2021. 

SWR 32 specifies exempt and authorized flaring in which an operator can flare, including for safety reasons, without going through the application process to obtain an exception to the rule. Any other flaring request would go through the application for exception to the rule and be reviewed.

The RRC published a new form, Form R-32, for operators to apply for an exception to SWR 32. It provides specific guidance on when an exception to flare would be permissible, under which circumstances and for how long. 

The online version of the form launched in May 2021.

The RRC noted that less that 0.2% of natural gas produced in November was flared, which was a record low. Further, the amount of gas flared has been on a steady decline every month since June 2019.

Click here to access the Texas RRC Flare/Vent Exceptions Query.

API appeals ruling invalidating 2021 federal lease sale

In early February, the American Petroleum Institute (API) filed a notice of appeal with the US Court of Appeals for the DC Circuit of the decision by the DC District Court that invalidated the results of the only federal lease sale for natural gas and oil held in 2021. 

The sale generated more than $198 million in total bids, and the revenues received are directed to the US Treasury, state and local governments, the Land and Water Conservation Fund and the Historic Preservation Fund.

“At a time of rising energy costs and heightened geopolitical tensions, the misguided decision to cancel the only lease sale held last year is contributing to significant uncertainty for US natural gas and oil producers and limiting access to the affordable, reliable energy that’s needed here in the US and around the world,” said Frank Macchiarola, API Senior Vice President for Policy, Economics and Regulatory Affairs.

The notice also said the court’s ruling overlooked the comprehensive environmental analysis that the Bureau of Ocean and Energy Management had conducted as part of the National Environmental Policy Act process prior to the lease sale.

API also cited a report issued in November 2016 by the US Bureau of Ocean Energy Management analyzing the effects of offshore leasing restrictions, which found that US greenhouse gas emissions would be little affected and could increase if more foreign imports are needed in the absence of new US offshore leasing and production. The report noted that increased production and transport of foreign oil would lead to higher greenhouse gas emissions.

DOE issues cyber notice amid Russia’s war in Ukraine

On 23 February 2022, the US Department of Energy (DOE) issued a letter addressing increasing concerns for heightened cybersecurity risks associated with the conflict in Eastern Europe. The DOE encourages organizations across the energy sector to evaluate their cybersecurity measures and implement a “shields up posture.” Organizations should:

• Review the Cybersecurity and Infrastructure Security Agency’s “Shields Up” Guidance;

• Verify or otherwise engage with one of the three energy Information Sharing and Analysis Centers (ISAC);

• Ensure awareness, roles and responsibilities, and cross-functional processes for securing enterprise operations; and

• Immediately report attempted or confirmed cyber intrusions to ISAC points of contact and US government emergency response centers.

API comments on proposed EPA methane regulations

On 31 January, the API submitted comments on the US Environmental Protection Agency’s (EPA) proposed methane regulations. The comments emphasized support for the direct regulation of methane for new and existing sources and highlighted the industry’s progress in reducing methane emissions intensity from operations. 

The EPA has yet to publish the rule text for the proposed regulations, but the API based its comments on the preamble text and focused on the effectiveness of emission-reduction strategies, safety, feasibility, operability and cost. Where appropriate, alternative approaches were recommended. The API also called on the EPA to publish the full text before setting the new source applicability date.

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