Current Status of Waste Prevention Rule – Partially In Effect

UNITED STATES DEPARTMENT OF THE INTERIOR

BUREAU OF LAND MANAGEMENT

WASHINGTON, D.C. 20240

http://www.blm.gov

April 18, 2018

In Reply Refer To:

3100 (300) P  

EMS TRANSMISSION 05/15/2018

Information Bulletin No. 2018-048

To:                    All Washington Office and Field Office Officials

From:               Assistant Director, Energy, Minerals and Realty Management

Subject:           Current Status of Waste Prevention Rule – Partially In Effect                               

On November 18, 2016, the Bureau of Land Management (BLM) published a final rule to address, among other things, the waste of Federal and Indian gas through venting, flaring, and leaks.  81 Fed. Reg. 83,008 (Nov. 18, 2016) (the “Waste Prevention Rule”).  The Waste Prevention Rule replaced BLM’s Notice to Lessees and Operators of Onshore Federal and Indian Oil and Gas Leases, Royalty or Compensation for Oil or Gas Lost (NTL-4A), which previously governed the royalty-free use of oil and gas, as well as the venting and flaring of oil and gas from onshore Federal and Indian leases. 

The Waste Prevention Rule established new regulations for the royalty-free use of oil and gas in 43 Code of Federal Regulations (C.F.R.) subpart 3178 (“subpart 3178”).  The Waste Prevention Rule also established new regulations addressing the loss of gas through venting, flaring, and leaks in 43 C.F.R. subpart 3179 (“subpart 3179”).  Finally, the Waste Prevention Rule established a requirement for operators to submit a “waste minimization plan” with Applications for Permits to Drill (APD) (see 43 C.F.R. 3162.3-1(j)).

The Waste Prevention Rule became effective on January 17, 2017.  However, many of the subpart 3179 requirements were to be phased in over time, and would not become operative until January 17, 2018.[1]  Notably, the Subpart 3178 regulations for royalty-free use and the subpart 3179 provisions for determining when the loss of gas is “avoidable” or “unavoidable” (43 C.F.R. 3179.4) and for requiring the filing of a waste minimization plan with APDs, among others, have been in effect since January 17, 2017.

Almost immediately, the rule was challenged in Federal Court by industry groups and the States of Wyoming, Montana, North Dakota, and Texas.  On January 16, 2017, the U.S. District Court for the District of Wyoming denied a preliminary injunction of the Waste Prevention Rule.  Wyoming v. U.S. Department of the Interior, 2017 WL 161428 (D. Wyo.) (Jan. 16, 2017).  This litigation was later stayed in light of administrative efforts to suspend and revise the Waste Prevention Rule.

On December 8, 2017, the BLM issued a final rule suspending certain requirements[2] established in the Waste Prevention Rule until January 17, 2019.  82 Fed. Reg. 58,050 (Dec. 8, 2017) (the “Suspension Rule”).  The Suspension Rule was challenged in Federal Court by the States of California and New Mexico and a coalition of 17 conservation and tribal citizen groups.  On February 22, 2018, the U.S. District Court for the Northern District of California granted a preliminary injunction of the Suspension Rule, meaning that the Suspension Rule will not have effect during the litigation of the Suspension Rule.  California v. Bureau of Land Management, 2018 WL 1014644 (N.D. Cal.) (Feb. 22, 2018).  

Separately, on February 22, 2018, the BLM published a proposed revision of the Waste Prevention Rule for public comment.  83 Fed. Reg. 7924 (Feb. 22, 2018) (“Revision Rule”).  The BLM’s proposed Revision Rule would rescind certain requirements introduced in the Waste Prevention Rule and would revise Subpart 3179, such that it would more closely align with NTL-4A.

Following the preliminary injunction of the Suspension Rule, the plaintiffs who had initially challenged the Waste Prevention Rule in the U.S. District Court for the District of Wyoming filed motions to lift the stay on that litigation and either proceed to a decision on the merits or stay the Waste Prevention Rule pending the administrative revision of the rule.  On April 4, 2018, the U.S. District Court for the District of Wyoming stayed the litigation of the Waste Prevention Rule pending finalization or withdrawal of the proposed Revision Rule and stayed implementation of certain provisions of the Waste Prevention Rule.  Wyoming v. U.S. Department of the Interior, 2:16-CV-0285-SWS (D. Wyo.) (April 4, 2018). Specifically, the court stayed implementation of the Waste Prevention Rule’s "phase-in" provisions. 

The stayed “phase-in” provisions are:

• 43 CFR 3179.7 (gas capture percentage requirement)
• 43 CFR 3179.9 (measuring and reporting volumes of gas vented or flared)
• 43 CFR 3179.201 (equipment requirements for pneumatic controllers)
• 43 CFR 3179.202 (requirements for pneumatic diaphragm pumps)
• 43 CFR 3179.203 (storage vessels)
• 43 CFR  3179.301 - 3179.305 (leak detection and repair)

Please note that the court’s stay of the Waste Prevention Rule is narrower than the suspension that BLM sought to impose with the Suspension Rule.  For example, the requirement that the operator submit a waste minimization plan with its APDs and the provisions of the Waste Prevention Rule pertaining to well drilling and well completions are not included in the court’s stay and remain in effect. 

All provisions of the Waste Prevention Rule that were not stayed by the court’s order are currently in effect.  In other words, all the provisions of the Waste Prevention Rule in subparts 3178 and 3179 that are not listed above among the stayed “phase-in” provisions are currently in effect.

If you have any questions, please contact me at 202-208-4201, or your staff may contact Catherine Cook, Acting Division Chief, Fluid Minerals, at 202-912-7145.

Signed by:                                                                   Authenticated by:

Timothy R. Spisak                                                      Robert M. Williams

Acting Assistant Director                                           Division of IT Policy and Planning,WO-870

Energy, Minerals and Realty Management

[1] The requirements of the Waste Prevention Rule that would not become operative until January 17, 2018, were: 43 C.F.R. §§ 3179.7 (gas capture percentage), 3179.9(b) (measurement/calculation), 3179.201 (pneumatic controllers), 3179.202 (pneumatic diaphragm pumps), 3179.203 (storage tanks), and 3179.301-305 (leak detection and repair).

[2] The Suspension Rule sought to suspend the following requirements until January 17, 2019: 43 C.F.R. §§ 3162.3-1(j) (waste minimization plan), 3179.7 (gas capture percentage), 3179.9(b) (measurement/calculation), 3179.10 (prior determinations regarding royalty-free flaring), 3179.101 (well drilling), 3179.102 (well completion and related operations), 3179.201 (pneumatic controllers), 3179.202 (pneumatic diaphragm pumps), 3179.203 (storage tanks), 3179.204 (downhole well maintenance and liquids unloading), and 3179.301-305 (leak detection and repair).