GAO Aims for Richer Government and Cleaner Air by Capturing Lost Gas

Photo Source: EPA and GAO. Some rights reserved.

Written in October, but released just yesterday, the GAO has published a report on the opportunities and benefits of capturing wily gas on federal leases that is currently either released into the atmosphere (vented) or burned (flared).

The Department of the Interior (DOI) leases public lands for oil and natural gas development as a source of federal income. DOI’s Bureau of Land Management (BLM) manages leases onshore, and the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) is responsible for offshore leases.

According to the GAO, the DOI received around $9 billion in royalties from these leases in 2009. However, the GAO posits that those royalties could be substantially increased (and GHG emissions substantially decreased) if the DOI took steps to curb gas lost to leaks and releases from ongoing operational and safety procedures. It is this gas which must be vented or flared, processes which not only throw away royalties, but add to climate change – venting releases methane, and flaring emits carbon dioxide, both of which are greenhouse gases.

As a part of this study, GAO was asked to “(1) examine available estimates of the vented and flared natural gas on federal leases, (2) estimate the potential to capture additional gas with available technologies and associated potential increases in royalty payments and decreases in greenhouse gas emissions, and (3) assess the federal role in reducing venting and flaring.”

Interestingly enough, EPA data and GAO analysis suggest that nearly 40 percent of vented and flared gas (from onshore federal leases) could be “economically captured with currently available control technologies,” increasing royalty payments by about $23 million, and reducing GHG emissions by more than 16 million metric tons! You can read the report for the full set of recommendations, but generally the GAO proposes that Interior “improve its venting and flaring data and address limitations in its regulations and guidance.” (The BLM currently uses guidance from 1980. See NTL-4A.)

***

While the DOI has official oversight responsibilities for federal leases, the EPA voluntarily works with the oil and gas industry to encourage gas saving technology. Read more here: Natural Gas STAR program.

To view federal oil and gas operations regulations, see the following CFR Parts:
43 CFR Part 3160 (onshore) and 30 CFR Part 250 (offshore).

2 responses to this post.

  1. Posted by Clif on November 30, 2010 at 9:01 pm

    Sounds like a win-win. This is a great story. Thanks Mien!

    Reply

  2. This Alert published by Haynes and Boone yesterday says that “federal authorities are eyeing new rules curtailing venting of natural gas in the Gulf of Mexico.” Looks like someone else read that GAO report!

    http://www.haynesboone.com/files/Publication/dbdcc606-6248-4cf5-894e-7a511ebcf9bf/Presentation/PublicationAttachment/abcfad00-b044-4104-999e-8cc910a8de1c/Feds_Convene_Meeting_to_Discuss_Regulations.pdf

    Reply

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