This week the U.S. District Court for the District of Wyoming struck down the 2016 Methane Rule. The 2016 methane rule limited waste and increased royalty collection for taxpayers on vented, flared, and leaked natural gas.  

Statement by Autumn Hanna, Vice President of Taxpayers for Common Sense 

“Instead of fixing a decades old problem, this Administration seems intent on ensuring taxpayers continue to lose billions of dollars in royalties on wasted methane gas. It is only getting worse and taxpayers are shouldering increased liabilities as a result. We all own this natural gas and it is fiscally reckless that this egregious waste continues.  

“The Bureau of Land Management is the only agency with authority to protect taxpayers from oil and gas developers wasting our natural resources.  Reverting to guidance developed before widespread use of fracking technology is terrible for taxpayers. BLM should waste no time in taking strong action to protect taxpayers.” 

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Background  

Taxpayers continue to lose millions of dollars in lost royalties on wasted natural gas. Over the last ten years, more than $1 billion worth of natural gas was vented, flared, or otherwise lost on federal lands. Oil and gas operators were not charged a royalty on nearly 90 percent of that gas.  

In 2016, the BLM finalized a new set of standards designed to reign in the excessive waste of methane, often referred to as the 2016 “Waste Prevention” rule. In 2017, under the direction of then-Interior Secretary Ryan Zinke, the BLM reversed course and pushed back compliance dates for the 2016 rule before replacing it completely in November 2018. The 2018 rule codified aspects of the guidance in place before 2016 and deferred to inconsistent state regulations to determine when producers should pay federal taxpayers for methane waste. 

In July 2020, the U.S. District Court for the Northern District of California struck down the 2018 repeal rule as a “fickle” attempt to reach a preordained conclusion that violated statutes governing proper agency rulemaking. The ruling allowed for the underlying 2016 Waste Prevention Rule to take effect again in October, pending a ruling from the federal District Court in Wyoming, which is what was issued today.

As a result of this ruling, federal oil and management policy will revert to vague guidance written in 1979, decades before the fracking boom caused a spike in both gas production and gas waste on federal lands. 

For a quarter century, Taxpayers for Common Sense has served as a nonpartisan budget watchdog
working on behalf of the nation’s taxpayers.