American Oil and Gas Reporter - March 2017 - 33

NDPC Offers Regulation Suggestions
BISMARCK, N.D.-The North Dakota Petroleum Council is making four suggestions to the Trump administration for
regulatory improvements that it calls "a direct response to wasteful processes we find
unnecessary to federal governing."
In a Jan. 27 letter to President Trump,
NDPC suggests:
* Establishing an ownership threshold
trigger for federal processes;
* Rescinding the Environmental Protection Agency's methane emissions information collection request, the Bureau of
Land Management's hydraulic fracturing
and waste prevention (venting and flaring)
rules, and BLM's replacement Onshore Orders 3, 4 and 5, as well as the Pipeline and
Hazardous Materials Safety Administration's advance notice of proposed rule
making on volatility;
* That the federal government provide
optimal resources to agencies; and
* Establishing an economic threshold
on new federal regulations, above which
congressional review is required.
Expanding on the first of its four recommendations, NDPC cites BLM's hydraulic fracturing and waste prevention
rules, as well as portions of replacement
Onshore Orders 3, 4 and 5, as federal overreach that "expands federal jurisdiction to
state and private lands where the federal
government owns only a small amount of
minerals, and in many cases, no surface."
To solve this problem, NDPC suggests,
"If the federal government does not own
a controlling percentage of the surface in
a development spacing unit, then the federal permitting process and regulations
would not apply."
An alternative would be to establish an

ownership threshold such as a 51 percent
controlling mineral interest before federal processes would apply.
On EPA's ICR and the various BLM regulations, NDPC points out all are under legal challenge. Commenting that "duplicative
rules serve only to add costs while reducing
efficiency at federal agencies," NDPC suggests allowing permanent court injunctions.
On PHMSA's advance NOPR, which
NDPC notes was published on Jan. 18, two
days before the end of President Obama's
term, the association points out that a national vapor pressure threshold "was thoroughly debated in 2014 and tabled pending results from the Department of Transportation's own Sandia study."
"The advance NOPR is based on a petition from the New York State attorney
general, which is based more on emotion
than science and should not have been sufficient to elicit an advance NOPR," NDPC
continues, calling it "a very poor use of
federal resources."
NDPC says both EPA's ICR and PHMSA's advance NOPR are subject to the
Congressional Review Act.
Regulatory Efficiency
On providing optimal resources to
agencies, NDPC writes, "When necessary
rules are promulgated, the federal government should be required to provide sufficient manpower and technological resources to implement and process rule provisions in a timely and efficient manner."
NDPC observes that when BLM's replacements for Onshore Orders 3, 4 and 5
became effective Jan. 17, the agency's
Dakotas field office informed operators the
Washington office was still drafting a

process manual on how to implement the
new rules.
"Meanwhile, BLM enforcement personnel have started their compliance inspections and have issued notices of violation
to companies for being out of compliance,"
the association advises. "NDPC was told
BLM field offices would not know specifics
of the requirements until several months after the regulation was final. How then, can
the BLM issue NOVs when it has stated it
will not host a workshop on these new regulations until months after they are final?"
Furthermore, NDPC reveals that its
member companies in the past have funded BLM staff positions to ensure timely
processing of applications for permits to
drill. Other underfunded and understaffed
federal agencies include the U.S. Fish &
Wildlife Service and the U.S. Forest Service, the association adds.
One solution, NDPC says, is to leave fees
collected for federal APDs with the state offices from which they are collected, setting
up a system of payment for services rendered, and providing funds for adequate human resources, equipment and technology.
In addition, NDPC holds, "New rules
should not be promulgated until a workforce study has concluded that the federal agency has sufficient manpower and
tools at hand to administer the rule."
Finally, on requiring congressional review of any rules exceeding an economic threshold, NDPC says, "Estimates of the
economic cost of new regulations should
be subjected to an audit to verify accuracy. Furthermore, costs should be real and
verifiable, eliminating theoretical costs
such as the social cost of carbon or the social cost of methane."
❒

Federal Legislation

Congress Pursues Regulatory Reform
WASHINGTON-Congressional Republicans opened the 115th U.S. Congress
with an eye toward pruning federal regulation. Their efforts were highlighted by
a number of joint resolutions invoking the
Congressional Review Act (CRA) to
overturn specific Obama-era regulations,
but also included stand-alone bills ranging from Endangered Species Act reforms to limiting the federal government's ability to regulate hydraulic fracturing and even terminating the Environmental Protection Agency altogether.
Two CRA resolutions moved through
Congress and were signed into law in Feb-

ruary by President Donald Trump.
The first to become law was HJR 41,
which negates a Securities and Exchange
Commission rule requiring oil, gas and
mining companies to disclose payments
made to governments for commercial resource development. It passed the House
of Representatives 235-187 on Feb. 1, according to Congress' legislative website,
www.congress.gov. The Senate approved
HJR 41 52-47 on Feb. 3, the website indicates, and it was signed into law by President Trump on Feb. 14.
The "Disclosure of Payments by Resource Extraction Issuers" rule was man-

dated by Section 1504 of the Dodd-Frank
Wall Street Reform and Consumer Protection Act of 2010, which Christopher Guith, senior vice president for policy at the
U.S. Chamber of Commerce's Institute for
21st Century Energy, contends "would have
cost hundreds of millions of dollars to comply with, would have had vast unintended
consequences, and ultimately would have
harmed those it was intended to protect."
"There are existing laws and treaties ensuring transparency and disclosure, including the Extractive Industries Transparency Initiative. This one wasn't necessary,"
Guith adds.
MARCH 2017 33


http://www.congress.gov

American Oil and Gas Reporter - March 2017

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