American Oil and Gas Reporter - August 2015 - 24

IndustryDigest
(AOGR, April 2015, pg. 58). Their
lawsuit was combined with one filed by
the state of Wyoming on March 26 and
later joined by the states of Colorado,
North Dakota and Utah.
The plaintiffs had sought a
preliminary injunction against the new
rules while their challenge was heard.
Judge Skavdahl denied that request, but
his June 23 ruling required federal
agencies to continue processing oil and
gas permits under current regulations.
IPAA Manager of Public Affairs and
Communications Neal Kirby calls the
July 16 order good news. "The
government's request proves there is no
urgent reason to immediately
implement the final rule," he reasons.
"(The) request by the government
supports the industry's underlying
request for a preliminary injunction."
Skavdahl's June 23 ruling gave both
sides seven days to review the
administrative record, once filed. The
judge then is expected to issue his
decision on the injunction within two
weeks. ❒

BLM Seeks To Update
Rules For Calculating
Oil And Gas Royalties

WASHINGTON-The U.S. Bureau of
Land Management is seeking comments
on a proposed rule issued July 10 to
replace Onshore Oil and Gas Order No.
3 on measurement, accountability, and
royalty payments for oil and gas
production from federal and Indian
lands. Comments are due by Sept. 11.
"These updates will help ensure that
oil and gas produced from leases
overseen by the BLM is measured
properly, that American taxpayers
receive fair value for public resources,
and that Indian tribes and allottees,
states and local governments receive the
full royalties they are due," states Janice
M. Schneider, assistant secretary for
land and minerals management.
BLM points out that Onshore Order
3 was last updated in 1989 "and does
not reflect modern industry operations
or technology." In addition, the bureau
says its proposed rule responds to
recommendations from the Government
Accountability Office, the Department
of Interior's Office of the Inspector
General, and DOI's Subcommittee on
Royalty Management, "all of which
expressed concerns about the adequacy
24 THE AMERICAN OIL & GAS REPORTER

of BLM's requirements."
According to BLM, the proposed
rule would:
* Establish uniform procedures for
designating official points for
measuring oil and gas, known as facility
measurement points, which would apply
to new and existing leases;
* Codify guidance related to
approving commingling production
from multiple leases;
* Establish conditions for
approving off-lease oil and gas
measurement;
* Update requirements related to
using vale and drain seals, prohibitions
on using meter bypasses, and reporting;
* Require operators of new and
existing facilities to provide new site
facility diagrams; and
* Require purchasers and
transporters to comply with the same
standards as operators, with respect to
records.
BLM says the proposed rule may be
viewed online at
https://www.federalregister.gov/publicinspection. ❒

Voluntary Methane
Reduction Program
Announced By EPA

WASHINGTON-The U.S.
Environmental Protection Agency has
announced a proposal by which the oil
and gas industry can reduce methane
emissions voluntarily through a
program based on the agency's Natural
Gas STAR program.
The Methane Challenge "will create
a platform for leading companies to go
above and beyond existing voluntary
action and make meaningful and
transparent commitments to yield
significant methane emission
reductions," EPA says in a proposed
framework document released July 23.
The agency says the Methane
Challenge is a follow-on to both the
Strategy to Reduce Methane Emissions
released by the White House in 2014
and EPA's own goal announced in
January to reduce methane emissions
from the oil and gas sector 40-45
percent from 2012 levels by 2025 (see
"White House Releases Control
Strategy," AOGR, February 2015).
"The Methane Challenge will
complement these regulatory actions,

providing incentives and opportunities
for companies to undertake and
document ambitious voluntary methane
emission reductions," EPA says.
The program calls for companies to
make specific commitments and submit
data and information about their
programs annually through Subpart W
of EPA's greenhouse gas reporting
program. EPA contrasts this with its
regular Natural Gas STAR program, in
which companies make only general
commitments, participate at a range of
levels, and report only information on
emission reduction actions.
EPA has set three primary criteria
for recognizing Methane Challenge
partners. It says company commitments
should:
* Be ambitious and achieve
meaningful methane reductions across
company operations;
* Be transparent with the ability to
track and account for progress; and
* Demonstrate continuous
improvement.
Industry reactions were cautiously
optimistic. Howard Feldman, senior
director of regulatory and scientific
affairs at the American Petroleum
Institute, says, "Voluntary programs are
the best way to reduce methane
emissions from existing sources.
Industry . . . will consider participating
in a voluntary program, provided it has
the necessary flexibility and incentives."
Independent Petroleum Association
of America General Counsel Matthew
Kellogg offers, "A flexible, voluntary
program with appropriate incentives
will be the fastest and most effective
way to further reduce emissions from
the oil and gas sector. It remains to be
seen whether the options proposed by
EPA will be workable and whether EPA
will provide appropriate incentives for
participation."
Kellogg especially expresses
concerns "about the complexity and
utility of the record keeping and
reporting requirements."
America's Natural Gas Alliance
adds, "We always have said the best
way to achieve reductions in methane is
through collaborative measures. The
fact we have cut methane emissions
from production activities by 38 percent
since 2005 while increasing production
by 35 percent bears that out.
"We will be reviewing the details on
the proposed program to see how it
American Oil and Gas Reporter - August 2015

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