Last week, the industry was dealt a serious blow when the Senate failed to repeal the BLM Waste Prevention rule. This was not without a lack of effort on behalf of Sen. John Hoeven, R-N.D., and Rep. Kevin Cramer, R-N.D., who showed great leadership in the effort and showed their support for the more than 72,000 people whose jobs are supported by the oil and gas industry.
Hoeven and Cramer were not fooled by the artificially named “Waste Prevention” rule. They saw it for what it was: a tool in the environmental extremists’ war on the oil and gas industry and efforts to “keep it in the ground.”
That’s because this rule does not prevent waste. The actual reductions in methane would have been only 0.064 percent. Compare that to industry-led efforts in North Dakota that led to a 54 percent decrease in flaring.
It also wouldn’t increase royalties as it pretends to do. In fact, it would have decreased royalties by more than $39.1 million. These are royalties that would have otherwise gone to the state, tribe and private mineral owners.
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What this rule will accomplish is the shutting in of wells, potentially impacting as many as 2,780 wells in North Dakota. Every state and its geology is different, and what this one-size-fits-all approach does not consider is the engineering that goes into each well and the unique characteristics that set the Bakken apart as a world-class resource.
Instead, the Senate and specifically Sen. Heidi Heitkamp, D-N.D., should have voted to repeal this rule and to allow the state primacy and regulatory authority. The state already has some of the most stringent rules in the nation, and the industry has invested more than $13 billion in infrastructure to capture more natural gas. This has led to a 54 percent decrease in flaring in just a few short years.
This rule will heap additional duties — duties already successfully being carried out in the state — on an already overburdened staff at the BLM. Already, the BLM is woefully behind in its essential duties, with companies waiting as many as three years for permits. This backlog is preventing the build-out of necessary infrastructure, which is the only effective and feasible way to capture natural gas and prevent waste. The irony is that rather than preventing waste, this rule will encourage it by creating an additional 82,000 hours of paperwork for BLM employees and costing taxpayers $270 million per year to achieve absolutely no benefit, all while the state and industry are already making significant strides in reducing flaring.
Heitkamp had a real opportunity to save the state and federal governments time and taxpayer dollars by voting to repeal this bill and make a larger, more immediate impact on reducing flaring and venting by instead fixing permitting, infrastructure and pipeline delays. Instead, the state and federal government must now dedicate significant time and resources in trying to fix this unworkable rule.
We want to thank Hoeven and Cramer for seeing through the politics and for their steadfast support for the state of North Dakota.
Ron Ness is the president of the North Dakota Petroleum Council.