On February 22 2018 the Bureau of Land Management (BLM) proposed to rescind significant portions of the Waste Prevention Rule 2016, imposing limits on the venting and flaring of gas from oil and gas wells on federal and American Indian lands. The proposal would eliminate requirements for gas capture plans, gas capture percentages, leak detection and repair programmes and equipment replacement, citing the BLM's questionable legal authority to regulate air emissions as opposed to regulating mineral waste. Instead, oil and gas operations would be subject to existing state and Environmental Protection Agency regulations that impose similar requirements. A key aspect of the proposed rule is a revised cost-benefit analysis that uses an interim social cost of methane calculation with much lower numbers than that used for the 2016 rule. The new regulatory impact analysis concluded that the 2016 rule's costs far exceeded any benefits from additional gas capture and sale. Critics have argued that the proposal undervalues the lost gas that would have been captured under the 2016 rule – reducing royalties for the United States and individual states – and that the social cost of methane should have been given a higher, not lower, value than that used in the 2016 rule. Comments are due by April 23 2018.

For further information on this topic please contact Samuel B Boxerman or Jim Wedeking at Sidley Austin LLP by telephone (+1 202 736 8000) or email (sboxerman@sidley.com or jwedeking@sidley.com). The Sidley Austin LLP website can be accessed at www.sidley.com.

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