American Oil and Gas Reporter - September 2017 - 34

two-year stay ended Aug. 9, and as of Aug.
28, IPAA said it still was waiting to hear
how the agency would proceed. In the
meantime, the association notes, the Subpart
OOOOa regulations remained in effect.

BLM Flaring Rule
BLM's notice to OMB says its proposed rule would suspend until July 17,
2019, provisions of its venting and flaring
rule pertaining to:
* Waste minimization plans;
* Flaring and venting of gas during
drilling and production operations, and
during well completions and related
operations;
* Determining the emission levels of
storage vessels; and
* Minimizing gas vented during
downhole well maintenance and liquids
unloading.
The notice says that the proposed rule
also will delay until July 17, 2019, provisions pertaining to:
* Gas capture;
* Measuring and reporting gas
volumes vented and flared;
* Existing approvals to flare royalty
free;
* Replacing pneumatic controllers;
and
* Leak detection and repair.
The notice adds that the delays and
suspensions "are consistent with the president's March 28 executive order on Promoting Energy Independence and Economic Growth and its requirement that
BLM review (its flaring rule) to determine
whether revisions, rescissions or suspensions (were) appropriate."
BLM had published a notice of its
intent to postpone certain compliance requirements of its venting and flaring rule
in the June 15 Federal Register (AOGR,
July 2017, pg. 30). The rule was finalized
in November 2016 and became effective
on Jan. 17, 2017.

Water And Royalties
On July 27, EPA and the Army Corps
of Engineers published a proposed rule
"to initiate the first step in a comprehensive, two-step process intended to review
and revise the definition of 'waters of
the United States.' This first step proposes
to rescind the (WOTUS definition) in
the Code of Federal Regulations and to
recodify (the definition) that currently
governs administration of the Clean Water
Act, pursuant to" the U.S. Court of
Appeals for the 6th Circuit's stay of the
Clean Water Rule in October 2015.
A second step, the Federal Register
notice continues, will be a rule making in
which the agencies "conduct a substantive
re-evaluation" of the WOTUS definition.
34 THE AMERICAN OIL & GAS REPORTER

When EPA and the Corps announced
their intention on June 27 to rescind the
Clean Water Rule, they indicated the
new definition would be "implemented
in accordance with Supreme Court decisions, agency guidance and longstanding
practice" (AOGR, August 2017, pg. 28).
Elsewhere, DOI's Office of Natural
Resources Revenue on Aug. 7 published
a final rule repealing the royalty valuation
rule that it promulgated under the Obama
administration and was to become effective
Jan. 1, 2017.
In a press release, DOI notes, "The
stated intent of the valuation rule was to
offer greater simplicity, certainty, clarity
and consistency in product valuation and
reporting for federal and Indian mineral
lessees."
However, DOI continues, lawsuits
challenging the rule as well as letters to
ONRR "identified several areas in the
rule warranting reconsideration."
The Federal Register notice adds,
"The valuation rule has a number of defects that make certain provisions challenging to comply with, implement or
enforce . . . and would impose a costly
and unnecessary burden on lessees."
Further, ONRR says, "We have concluded that certain provisions . . . would
unnecessarily burden the development of
federal oil and gas, and federal and Indian
coal, beyond the degree necessary."
Industry associations had criticized the
2017 valuation rule for banning the use
of non-arms'-length sales and removing
royalty deductions for business-related
expenses (AOGR, May 2017, pg. 14).
They also said the rule gave DOI essentially
unreviewable discretion to establish royalty
values on case-by-case bases.
The Aug. 7 Federal Register notice
also says DOI is re-establishing its Royalty
Policy Committee under the Federal Advisory Committee Act to engage with
key stakeholders and the public to develop
a revised rule.
The effective date of the repeal was
to be Sept. 6. IPAA estimates repealing
the rule will save oil and gas companies
between $60 million and $75 million.
Infrastructure Order
The Executive Order on Establishing
Discipline and Accountability in the Environmental Review and Permitting
Process for Infrastructure, which President
Trump signed on Aug. 15, sets the goal
of reducing the time for environmental
reviews and government authorization
decisions on major infrastructure projects
"to not more than an average of approximately two years" from the publication
date of a notice of intent.
Included in the definition of infrastruc-

ture projects are energy production and
generation from fossil, renewable, nuclear
and hydro sources, as well as pipelines.
The EO directs the White House Council
on Environmental Quality and the Office
of Management and Budget to work with
the Federal Permitting Improvement Steering Council to establish a cross-agency
priority (CAP) goal on streamlining the
infrastructure permitting process. It then
requires federal agencies to modify their
strategic plans and annual performance
plans under the Government Performance
and Results Act Modernization Act of
2010 consistent with the CAP goal.
The EO also specifies that each infrastructure project shall have a lead federal
agency that will work with other relevant
agencies to complete environmental reviews and permitting decisions. And it
directs CEQ to develop an action plan to
mediate disagreements between agencies.
The EO directs OMB, at least quarterly,
to produce a "scorecard of agency performance and overall progress toward
achieving CAP goal targets," which will
be used in evaluating agency performance
during budget formulation, and to "determine whether appropriate penalties . . .
should be imposed."
Other sections of the EO:
* Designate the Departments of
Interior and Agriculture as lead agencies
to identify and designate energy rightsof-way corridors on federal lands; and
* Revoke EO 13690 of Jan. 30,
2015: Establishing a Federal Flood Risk
Management Standard and a Process for
Further Soliciting and Considering
Stakeholder Input.
American Petroleum Institute President
and Chief Executive Officer Jack Gerard
welcomed the infrastructure EO. He noted
that comments API filed in March with
the Commerce Department indicated "significant improvements could be achieved
by standardizing permitting processes;
improving coordination among federal
and state agencies, including deadlines
for permit issuance; and using a dispute
resolution process to resolve interagency
permitting problems."
Ozone NAAQS
On Aug. 2, EPA announced it was
"moving forward with 2015 ozone designations, working with states to help
areas with underlying technical issues,
disputed designations, and/or insufficient
information."
The agency says it published a notice
in June that it was delaying the 70 ppb
designations from Oct. 1, 2017, to Oct.
1, 2018. "Today's announcement replaces
our earlier action . . . and clarifies our
path forward," EPA adds.

American Oil and Gas Reporter - September 2017

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