Compliance with portions of the Bureau of Land Management's (BLM) Waste Prevention, Production Subject to Royalties, and Resource Conservation Rule has been postponed pending judicial review. The notice was published in the Federal Register on June 15, 2017 (Vol. 82, No. 114, pp. 27430-27431). The postponement is effective immediately, but there is no timeframe for duration, nor did the notice address the potential rescinding or reinstatement of the affected requirements.
Some Requirements Postponed
Specifically, requirements with future compliance dates in the section of the Rule concerning waste prevention (§3179) were postponed. These include:
- Gas capture requirements for natural gas produced from oil and gas wells. (§3179.7)
- Measuring and reporting requirements for volumes of gas vented or flared. (§3179.9)
- The requirement to replace high-bleed natural gas actuated pneumatic controllers with a no-bleed or low-bleed device. (§3179.201)
- The requirement to replace natural gas operated pneumatic diaphragm pumps with either zero emission pumps or to capture all pump exhaust gases for use or sale. (§3179.202)
- The requirements to capture volatile organic compound (VOC) emissions from storage tanks with the potential for VOC emissions equal to or greater than 6 tons per year. (§3179.203)
- Leak Detection and Repair (LDAR) requirements for wells and compressor stations that were in production, or operating, prior to January 17, 2017 (§3179.301 through §3179.305). This includes the initial inspection that would have been required by January 17, 2018 and all subsequent inspections.
Not All Requirements Have Been Postponed
As noted in the Federal Register notice, those portions of the rule in effect as of June 15, 2017 have requirements unaffected by the postponement notice. These include:
- The requirement to submit a waste minimization plan with any application for a permit to drill was not postponed. For any application submitted on or after January 17, 2017, an accompanying waste minimization plan containing the elements listed in §3162.3-1(j) is required. Failure to submit a "complete and adequate" plan with the application could be grounds for denying or disapproving the Application for Permit to Drill.
- All aspects of the Rule regarding royalty-free use of production are in effect and were not postponed. This section of the rule addresses how oil and gas produced from a Federal or Indian lease can be used without being subject to royalties. These uses are outlined in 40 CFR §3178.
- New definitions of "avoidably" and "unavoidably" lost oil and gas are in effect (§3179.4). Because §3179.5, "When lost production is subject to royalty", was not postponed, oil and gas that is "avoidably" lost is subject to royalty.
- The venting prohibitions in §3179.6 are also in effect and were not postponed. This section of the rule requires that gas produced from gas wells, except for unavoidably lost gas, may not be flared or vented. If the avoidably lost gas cannot be captured, it must be flared or combusted subject to some exceptions. All flares and combustion devices must be equipped with an automatic ignition system.
- Limits on venting and flaring of gas during drilling and production operations are not postponed. For example, for wells drilled after January 17, 2017, any gas that reaches the surface as part of normal drilling must be captured and sold, flared, used, or injected. (§3179.101). Additionally, similar requirements for well completions (§3179.102) and well testing (§3179.103 and 104) were not postponed.
- Flaring or venting during an emergency may be conducted royalty-free. The definitions of what constitutes an emergency, and what does not constitute an emergency, are listed in §3179.105. Emergencies are limited to 24 hours or less, unless the BLM agrees to a longer period. The requirement to report emergency flaring or venting volumes within 45 days of the start of an emergency is also in effect and was not postponed.
- The requirements to minimize vented gas and the need for well venting associated with downhole maintenance and liquid unloading remain in effect. This section (§3179.204) outlines the operational and reporting requirements for liquids unloading by manual purging, including on-site presence during the entire event and recording of dates, times, and volumes of any venting that occurs. Wells equipped with plunger lift and/or automated well control systems may have reporting requirements under this section as well.
For assistance with the preparation of waste minimization plans, unavoidable loss determinations, or to discuss other requirements of the Rule still in effect, contact George Iwaszek in Trinity's Denver office at email@example.com or (720) 638-7647 x105.