American Oil and Gas Reporter - November 2017 - 30

continue to govern agency actions," along
with attorney fees and costs paid.
* EPA shall not enter any consent
decree or settlement agreement with
"terms that the court would have lacked
the authority to order" had the parties
not resolved the litigation, or that "converts
an otherwise discretionary duty of the
agency into a mandatory duty."
* Attorney fees and litigation costs
will be excluded from future settlements.
* The agency must provide sufficient
time to issue and modify proposed and
final rules arising from a future settlement,
as well as take public comments.
* It must publish any proposed or
modified consent decrees and settlements
for 30-day public comment and provide
a public hearing when requested.
Venting And Flaring Rule
A proposed rule published Oct. 5 by
the BLM would postpone implementation
until Jan. 17, 2019, portions of its Waste
Prevention, Production Subject to Royalties, and Resource Conservation rule
that have yet to be implemented, and
that would suspend until Jan. 17, 2019,
portions of the rule that are in effect already.
However, on the same day, the U.S.
District Court for the Northern District
of California overturned BLM's earlier
attempt to stay the Obama-era venting
and flaring regulation.
The regulation, which was finalized
in November 2016, requires producers

to reduce by half methane flared from
wells on public and tribal lands (AOGR,
December 2016, pg. 32).
BLM's Oct. 5 Federal Register notice
notes that the Independent Petroleum Association of America and the Western
Energy Alliance, as well as a number of
states, immediately challenged the rule
in the U.S. District Court for the District
of Wyoming. Those lawsuits, BLM observes, contend the agency underestimated
the rule's cost, and "would drive the industry away from federal and Indian
lands, thereby reducing royalties," as well
as "cause marginal wells to be shut in."
An analysis done at the behest of the
American Petroleum Institute calculates
the rule could render uneconomic up to
40 percent of wells that flare on federal
lands (AOGR, July 2017, pg. 30).
"We applaud BLM for revisiting a
regulation that contains underestimated
costs and overestimated environmental
and economic benefits," responds IPAA
Senior Vice President Dan Naatz. "It is
prudent for BLM to delay implementing
a rule it already is seeking to change."
Naatz is referring to BLM's June 15
Federal Register notice that it would
postpone indefinitely compliance requirements for key parts of the rule (AOGR,
July 2017, pg. 30).
Misinterpret APA
BLM mentions that President Trump's
Jan. 30 Executive Order 13771 required
federal agencies to seek ways to reduce

Members of the Kentucky Oil & Gas Association pause with Environmental Protection
Agency Administrator Scott Pruitt in Hazard, Ky., at which he announced EPA's intent to
repeal the Clean Power Plan. From left are KOGA Executive Director Ryan Watts, George
Mason of George Mason Law Firm, William Barr with BlackRidge Resource Partners,
Pruitt, Wesley Cate of Eco Energy, Bill Daugherty of BlackRidge Resources Partners, and
Maverick Bentley with EQT Corporation. Barr and Dougherty are past presidents of
KOGA, and the others all serve on the association's Board of Directors.

30 THE AMERICAN OIL & GAS REPORTER

regulatory compliance costs. That was
followed on March 28 by Executive Order
13783, which required the Department
of Interior to review four specific rules,
including the venting and flaring rule,
and by Secretarial Order 3349 on March
29, directing BLM to begin that review.
That review, BLM says, "found that
some provisions appear to add regulatory
burdens that unnecessarily encumber energy production, constrain economic
growth and prevent job creation."
Consequently, DOI issued its June 15
Federal Register notice postponing the
rule's January 2018 compliance dates,
BLM says.
On July 10, the attorneys general for
California and New Mexico, as well as
17 environmental organizations, filed lawsuits challenging that order (AOGR, August
2017, pg. 32).
IPAA says Judge Elizabeth Laporte
ruled Oct. 5 that BLM had misused an
Administrative Procedure Act provision
to delay implementing the rule.
An analysis written for the Texas Independent Producers & Royalty Owners
Association by Michael K. Reer, an associate with Harris, Finley & Bogle PC
in Fort Worth, explains that BLM postponed the rule under Section 705 of the
APA, which allows postponing the effective date of rules "when justice so requires."
But, as BLM points out, the rule became effective on Jan. 17, 2017, although
many of its provisions were not to be implemented until Jan. 17, 2018. Reer says
BLM argued that under §705, "effective
date" included both effective and compliance dates.
"The court disagreed with BLM's
broader interpretation," he reports, "instead
holding that the terms . . . have distinct
meanings."
Despite that, Western Energy Alliance
President Kathleen Sgamma says she is
optimistic the oil and gas industry will
not have to worry about complying with
the rule. "With publication (on Oct. 5) of
the proposed rule to suspend BLM's
methane rule for a year while the full
process is under way to rewrite the rule,
we remain confident companies will not
have to comply by the Jan. 17, 2018,
deadline," she says.
Sage Grouse Plans
On Oct. 11, BLM published a notice
of intent to seek public comments on
ways to amend its 2015 sage grouse landuse plans. Five days earlier, it announced
it was canceling a proposal within those
plans to ban mining on 10 million acres
American Oil and Gas Reporter - November 2017

Table of Contents for the Digital Edition of American Oil and Gas Reporter - November 2017
