04/09/2018

Oil & Gas Industry Challenge Halts Core Provisions of BLM's Venting and Flaring Rule

Oil and gas companies affected by the Bureau of Land Management's (BLM's) 2016 Waste Prevention, Production Subject to Royalties, and Resource Conservation rule, known as the "Venting and Flaring Rule," are (mostly) breathing a sigh of relief. On Wednesday, Judge Scott W. Skavdahl of the U.S. District Court for the District of Wyoming agreed that affected operators should not be required to comply with the most burdensome and costly provisions of the rule while BLM is actively revising it. Industry petitioners, Western Energy Alliance and Independent Petroleum Association of America are represented in the circuitous litigation by Eric Waeckerlin and Sam Yemington of Holland & Hart and Kathleen Schroder of Davis Graham & Stubbs.

What happens next is somewhat uncertain. Environmental groups have already appealed Judge Skavdahl's Order to the Tenth Circuit Court of Appeals. And, BLM is still undertaking the administrative revision process, with comments due April 23 and a final rule expected by August (or even earlier). While Wednesday's ruling provides much needed relief for many in the industry, it is important to realize that the Court stayed only certain provisions of the Venting and Flaring Rule, leaving others in effect. In essence, Wednesday's Order preserves the status quo that has existed since January 17, 2017, when the rule first took effect. More specifically, the following provisions have now been stayed:

  • 3179.7 (gas capture requirements)
  • 3179.9 (measuring and reporting volumes)
  • 3179.201 (pneumatic controller requirements)
  • 3179.202 (pneumatic diaphragm pump requirements)
  • 3179.203 (storage vessel requirements)
  • 3179.301-305 (leak detection and repair requirements).

These provisions, which were originally "phased-in" and not effective until January 2018, represent the rule's most burdensome and costly provisions. The remaining provisions in effect since January 2017, however, remain in effect.

Judge Skavdahl's Order is a well-reasoned, pragmatic decision that, in the Court's words, will "provide certainty and stability for the regulated community and the general public while BLM completes its rulemaking process." Please don't hesitate to reach out to Eric Waeckerlin or any of our other experienced environmental compliance and enforcement team should you have any questions about the status of the Venting and Flaring Rule. We will continue to provide updates as events continue to evolve in the courts and at the agency level.

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