Judge lets federal flaring rules take effect during lawsuit

Markets Associated Press

New nationwide rules to curtail the practice of burning off excess natural gas from oil and gas wells on federal land took effect as scheduled Tuesday after a judge said he saw no urgent reason to block them while a lawsuit moves ahead.

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U.S. District Judge Scott Skavdahl in Casper said Monday that he couldn't immediately conclude the Interior Department had overstepped its authority with the rules, which seek to reduce air pollution and waste by requiring gas to be captured and sold rather than flared.

Certain provisions in the rules don't take full effect for a year, Skavdahl pointed out. That allows time for the lawsuit contesting the rules filed by Montana, North Dakota, Wyoming, the Western Energy Alliance and Independent Petroleum Association of America to be resolved — assuming Donald Trump and his administration don't revoke the rules after he takes office Friday.

Environmentalists praised Skavdahl's decision, saying it will allow the government to begin collecting royalties on gas currently going to waste. Those royalties could be used for schools and infrastructure, Environmental Defense Fund lead attorney Peter Zalzal said.

Petroleum developers flare excess gas from newly drilled wells while they assess productivity and install pipelines to carry the gas off to sale. The practice costs the government about $23 million a year in lost royalties, according to a 2010 U.S. Government Accountability Office report.

Forty percent of the gas could be captured economically with existing technology, said the report referred to by Skavdahl in his decision not to suspend the rules.

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Though Skavdahl rejected its request to suspend the rules, the Western Energy Alliance predicted the judge ultimately would agree with the three states and industry groups that the rules exceed Interior's proper authority. The petroleum industry has done much on its own to reduce methane emissions, alliance President Kathleen Sgamma said.

"Federal regulation in the form of delayed pipeline and gas gathering line permits often leads to producers having to flare methane for longer periods of time than would otherwise be necessary," Sgamma said in a release.

Wyoming Gov. Matt Mead said in a statement that he was disappointed Skavdahl didn't suspend the rules but appreciated the judge also was skeptical about the Bureau of Land Management's "attempt to regulate matters outside its expertise."

Last summer, Skavdahl struck down rules for hydraulic fracturing on public lands, ruling Congress hadn't given the U.S. Bureau of Land Management such authority.

How Trump and his nominee for Interior secretary, Montana Rep. Ryan Zinke, will approach the flaring rules remains to be seen. Zinke has advocated for more oil and gas drilling and coal mining on Western lands.

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