The Bureau of Land Management (BLM) recently released its final rule addressing the waste of natural gas via flaring, venting, and leaks. Since 2013, the WORC network has advocated for the finalization of the rule.
The purpose of a federal rule, like the BLM methane waste rule, is to set a strong floor or set of minimum standards that must be adhered to. After analyzing the rule, WORC found a strong floor and some clear improvements, compared to the draft rule. Below we highlight areas of the rule that set a strong floor or were improvements from the draft rule.
Overall, the final rule is an improvement when compared to the draft rule. When the rule is implemented fully in 2025, the rule will be stronger than some of the state rules already on the books in Colorado, Montana, North Dakota, and Wyoming, with regard to flaring. The rule requires companies to reduce flaring from both a percentage of gas captured standpoint and volume standpoint.
The percentage capture goals are as follows:
These capture goals are similar to the North Dakota flaring rule and provide an approach that steps up capture with time. North Dakota’s rules require a phased-in capture percentage that ends in 2020 with 95%.
The allowable flare volumes are as follows:
|2018||5400mcf/month or 180mcf/day|
|2019||3600mcf/month or 120mcf/day|
|2020||1800mcf/month or 60mcf/day|
|2021||1500mcf/month or 50mcf/day|
|2022-2023||1200mcf/month or 40mcf/day|
|2024||900mcf/month or 30mcf/day|
|2025||750mcf/month or 25mcf/day|
The flare volume limits are similar to the rules that have been enforced in Wyoming. Wyoming has a flat limit of 60mcf/day. By the end of the implementation the rule would be an improvement upon the Wyoming rules, though BLM would allow companies to flare more than the Wyoming limit until 2021. With regard to Montana, the state allows companies to flare up to 100mcf/per day (though exemptions are allowed), so the rules would not surpass the Montana standards until 2020. North Dakota does not currently have volume based standards so this would improve upon North Dakota’s rules.
The BLM gives the companies flexibility by allowing them to average their flare volumes across an entire state or county. This is similar to the North Dakota flaring rules. This is problematic because it allows companies to capture all of their gas at several wells, while allowing other wells to flare in perpetuity, if they meet the volume and percentage goals through averaging. Though the new flaring requirements have their limitations and problems, they are an improvement over the draft rules. The final BLM methane rules do improve upon some existing state rules when flaring volume and percent goals ratchet up over time.
The final rule provides clarity on what defines a leak and sets out guidelines for leak inspection. Leaks are defined as methane gas leaking from equipment designed to vent and from releases due to operator error, equipment malfunctions, or equipment that does not meet the level of control required by the rules.
With regard to the frequency of leak detection, the BLM requires leak detection to be completed two times per year for oil and gas wells and associated infrastructure. The rule also requires that inspections occur four times per year for compressor stations. This is similar to the existing provisions in the Colorado rules.
What equipment can companies use to detect leaks?
Companies can use FLIR cameras or other optical cameras to detect leaks. Companies can obtain a variance if they can prove another technology is also effective at detecting leaks.
How long do companies have to complete repairs?
30 days after detection.
How can companies determine repairs are complete?
Soap bubble test, FLIR (optical imaging), and portable analyzers using Method 21
It is also noteworthy that the final rule does not include an exemption from leak monitoring for low producing wells. Getting an exemption for low-producing wells was one of the industry’s priorities.
The final rule requires the operator replace pneumatic diaphragm pumps that operate 90 or more days per year with zero-emissions pumps. If companies cannot replace pneumatics with zero-emissions pumps they can instead route the gas to a processing facility. A can flare excess gas if it finds it infeasible to send its gas to a line or processing facility. Though this is not the best it reduces venting.
The final rule addresses losses from storage vessels that not even the EPA methane rule covered. The final rule requires operators to route storage vessel vapor gas to a sales line, if the storage vessel has the potential to emit at least 6 tpy of volatile organic compounds. If this seems technically infeasible, or unduly costly, the operator can flare the excess gas instead of putting it into a sales line. Though this is not the best, it stops venting.
Gas Capture Planning
The final rule requires companies to send a “waste minimization plan” with their ADPs (Application to Drill Permit). The “waste minimization plan” must include the following:
- Anticipated well completion date.
- Description of anticipated production from wells
- Certification that the operator has provided one or more midstream companies regarding the operator’s production plans. This includes the anticipated completion dates and gas production rates of the proposed well or wells; and identification of a gas pipeline to which the operator plans to connect.
This is similar to what is already in place in states like North Dakota and Wyoming.
Overall, the final BLM methane waste rule is much improved when compared to the draft rule. Though the rule is not perfect, it, in some cases, improves on some state rules related to flaring in our region when the rule is fully implemented by 2025. In addition, there is more clarity on equipment, The rule provides fewer opportunities for companies to vent gas than in the past and sets some standards for oil and gas infrastructure and equipment to reduce venting. The rule does the job of setting a solid floor, which is the main objective of a federal rule.