{"id":21496,"date":"2017-11-12T17:08:03","date_gmt":"2017-11-12T22:08:03","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/bureau-of-land-management-deals-with-climate-change-regulate-with-data-and-care\/"},"modified":"2017-11-12T17:08:03","modified_gmt":"2017-11-12T22:08:03","slug":"bureau-of-land-management-deals-with-climate-change-regulate-with-data-and-care","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/bureau-of-land-management-deals-with-climate-change-regulate-with-data-and-care\/","title":{"rendered":"Bureau of Land Management Deals with Climate Change \u2013 \u201cRegulate with Data and Care\u201d"},"content":{"rendered":"

\"\"<\/a><\/strong><\/p>\n

Gas Flaring <\/strong>is the burning or venting of unutilized natural gas that is associated with crude oil production. This process is controlled and regulated by the Bureau of Land Management (BLM), a federal agency that manages the Federal government\u2019s onshore oil and gas program with the goals of facilitating safe and responsible energy development while providing a fair return for the American taxpayer. [1]<\/p>\n

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For most of US onshore operations, Oil and gas companies flare as much as 30% of the gas produced. The flares release carbon dioxide and raw methane, both of which contribute to global climate change. Moreover, methane \u2013 a greenhouse gas whose potency declines in the long run, but contributes more to the global warming than carbon dioxide over a span of decades. Not only flaring pollutes the environment, it also wastes gas that could be used as fuel. The World Bank calculates that in 2015 the oil industry worldwide flared off 147bn cubic meters: equivalent to the combined consumption of the UK, Germany and Switzerland. If burnt in power plants, it could supply the electricity consumption of the whole of Africa. [2]<\/p>\n

To address these concerns, BLM set up a standardized reporting system to track how much gas has been flared each day, and requires the energy companies to use the system to self-report their actual volume of gas flared on a per well basis. The goal is to set up a centralized database to store and analyze gathered data from every operator in the area. Then use these data as a benchmark for BLM to set maximum allowable emission standards. However, most of the operators took advantage of this lack of independent data and regulatory enforcement system by under reporting the actual volume of gas flared. This has resulted in uncertainty and reduced the credibility of data BLM has collected.<\/p>\n

To enforce accurate reporting and long term success, BLM passed new rule that requires oil and gas producers to cut flaring by half at oil wells on public and tribal lands and to periodically inspect their operations for leaks, targets the emissions as waste, clarifies when operators owe the government royalties on gas burned in flares and allows the government to set royalty rates at or above 12.5 percent of the value of production. [3] BLM also start to make unexpected site visits and unannounced inspections. Penalties for false reporting include fine, and in some extreme cases, BLM will mandate the operator to stop operation and freeze all pending applications on permits.<\/p>\n

However, such actions result in increase of operators\u2019 operating costs by at least 12%, delay permitting process by 48 days to 120 days, and require large increase in BLM inspector hires. Thus brought on some critics and pushbacks. According to Energy and Environment, the American Petroleum Institute (API) charged that the BLM\u2019s \u201cunnecessary proposed rules for venting and flaring could stifle energy development on federal lands with few benefits.\u201d Furthermore, President Trump pledged, \u201cWe will lift the restrictions on American energy, and allow this wealth to pour into our communities. It\u2019s all upside: more jobs, more revenues, more wealth, higher wages, and lower energy prices.\u201d [4][5]<\/p>\n

To balance the needs of cutting gas flaring while maintaining low energy prices, I recommend that BLM should use a third party inspection company to handle the day-to-day inspection and data reporting system to ensure the certainty and credibility of the data collected. A new information flow system should be established and tie with inspector dispatching procedures. Over flaring will automatically trigger alarms in the system, pinpoint the location first then dispatch inspectors in the area for site visit. This is will largely reduce the unplanned and unnecessary visits, thus reduce the personnel requirements from BLM.<\/p>\n

To ensure long term success, BLM should incorporate information flow with vendors\u2019 supply chain system. For example, every application received from the high flaring areas, BLM should mandate operators to use specialized separation unit and storage tank to capture produced gas. Once the permit is granted, both separation unit and storage tank should already be scheduled for dispatch by the rental company. While additional expenses from equipment rentals will incur, this new information system will largely reduces the operators\u2019 risks of paying large fine or potential delays from permitting and operations. In addition, operators will receive additional revenue from gas sold to offset some of the rental expenses.<\/p>\n

However, with decreasing demand in fossil fuels, the oil price declined to more than 50% since 2014. Should BLM puts flaring regulation on hold to help the oil and gas companies reducing their current operating costs? How should BLM balance its duties of both protecting the environment and ensuring deliver of cheap energy price to US taxpayers?<\/p>\n

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[1] Blm.gov. (2017). Programs: Energy and Minerals: Oil and Gas | BUREAU OF LAND MANAGEMENT, https:\/\/www.blm.gov\/programs\/energy-and-minerals\/oil-and-gas<\/a>, accessed Nov. 2017.<\/p>\n

[2] Crooks, E. (2017). Gas wasted by oil industry flaring on the rise. Financial Times, https:\/\/www.ft.com\/content\/47cf0e94-c101-11e6-9bca-2b93a6856354<\/a>, accessed Nov. 2017.<\/p>\n

[3] Goldberg, K. (2017). BLM Puts Gas Venting And Flaring Rule On Hold – Law360. Law360.com. https:\/\/www.law360.com\/articles\/934627\/blm-puts-gas-venting-and-flaring-rule-on-hold<\/a>, accessed Nov. 2017.<\/p>\n

[4] Mooney, C. (2017). Obama\u2019s government just released a new oil and gas rule \u2014 and Trump\u2019s may not like it much. Washington Post. https:\/\/www.washingtonpost.com\/news\/energy-environment\/wp\/2016\/11\/15\/obama-administration-releases-new-oil-and-gas-rule-in-the-face-of-an-incoming-trump-administration\/?utm_term=.7d9d71141183<\/a>, accessed Nov. 2017.<\/p>\n

[5] Magill, B. (2017). U.S. Has More Gas Flares than Any Country. Scientific American. https:\/\/www.scientificamerican.com\/article\/u-s-has-more-gas-flares-than-any-country\/<\/a>, accessed Nov. 2017.<\/p>\n","protected":false},"excerpt":{"rendered":"

&amp;quot;We will lift the restrictions on American energy, and allow this wealth to pour into our communities. 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