The Biden Administration recently released its Spring 2023 plan for all the agency rulemaking the administration is pursuing or plans to pursue. Several proposed rules address the federal onshore oil and gas program.

The Bureau of Land Management (BLM), under the Department of the Interior (DOI), is responsible for managing the development of the 700-million-acre federal subsurface mineral estate, which contains valuable, taxpayer-owned resources. The DOI captures the value of the rights to explore for and develop federal oil and gas resources through a live auction (with the resulting revenue referred to as “bonus bid” revenue), rental fees, and a royalty rate charged on oil and gas that is extracted.

Many federal leasing terms are outdated and charge below-market value, costing taxpayers billions of dollars every year in lost revenue. Furthermore, federal bonding requirements – money oil and gas developers must pay in advance to ensure the cleanup of well sites after production ends – are insufficient to cover cleanup costs, leaving taxpayers with sizeable financial and environmental liabilities. One proposed rule seeks to address these outdated leasing terms.

Another proposed rule seeks to address natural gas that is vented (released), flared (burned), or otherwise lost (e.g. leaked) during oil and gas production on federal land. Every year, oil and gas companies waste billions of cubic feet of natural gas extracted from federal lands through venting flaring, and leaking. These practices waste valuable federal resources and lose royalty revenue for taxpayers.

Bureau of Land Management – Fluid Mineral Leases and Leasing Process

This proposed rule will codify fiscal reforms to the onshore oil and gas leasing system made through the FY2022 budget reconciliation bill (Inflation Reduction Act, P.L. 117-169), as well as propose additional changes to “the fees, rents, royalties, and bonding requirements related to oil and gas leasing, development, and production.” Additionally, the proposed rule will modify the Bureau of Land Management’s leasing process to better “ensure the protection and proper stewardship of the public lands, including addressing impacts associated with fossil fuel activities and ensuring a fair return to taxpayers.”

A proposed rule was originally scheduled to be released in June 2023, but was published on July 24, 2023.

Bureau of Land Management – Conservation and Landscape Health

This proposed rule will “clarify and support the principles of multiple use and sustained yield in the management of the public lands,” including by incorporating climate resiliency and restoration in the management of the public lands though practices such as conservation and preservation.

The draft rule was first proposed April 3, 2023. The initial comments period was originally set to close June 20, 2023, but was later extended to July 5, 2023 (check out TCS comments here). A final rule is scheduled for December 2023.

Bureau of Land Management – Waste Prevention, Production Subject to Royalties, and Resource Conservation

This proposed rule would update regulations in the federal oil and gas leasing system governing the waste of natural gas through venting, flaring, and leaks on onshore federal and tribal leases. Specific proposed requirements include establishing that “operators must use all reasonable precautions to prevent the waste of oil or gas developed from the lease,” placing a 48-hour limit on the royalty-free emergency flaring, establishing a monthly volume limit on royalty-free flaring due to other specified events (e.g. pipeline capacity constraints, midstream processing failures), establishing obligations that operators must take to avoid wasting oil or gas, and requiring operators to submit waste minimization plans.

The draft rule was first proposed November 30, 2022. The comment period ended January 30, 2023 (check out TCS comments here). A final rule is scheduled for September 2023.

Environmental Protection Agency – New Source Performance Standards and Emission Guidelines for Crude Oil and Natural Gas Facilities: Climate Review

On November 15, 2021, the Environmental Protection Agency (EPA) proposed new source performance standards and emission guidelines for crude oil and natural gas facilities. This proposed rule would update and strengthen methane and volatile organic compound (VOC) emissions standards for new sources. The initial comments period was originally set to close January 14, 2022, but was later extended to January 31, 2022.

On December 6, 2022, the EPA proposed a supplemental rule to update, strengthen, and expand its previous 2021 proposal. This proposed supplemental rule will expand proposed regulations and apply the proposed rules to both new and existing sources. Other specific proposed requirements include fugitive emissions monitoring, stronger requirements for flaring natural gas, zero-bleed requirements for pneumatic devices, allowing operators to use advanced leak detection technologies, and allowing third-party detection of super-emitters.

The comment period for the supplemental rule ended February 13, 2023 (check out TCS comments here). A final rule is scheduled for August 2023.