In a decisive move against the Biden administration’s aggressive climate policy, four US states have filed a lawsuit to dispute the recently announced federal rule aimed at curbing methane pollution from oil and natural gas operations. The North Dakota Attorney General’s Office, supported by Montana, Texas, and Wyoming, contends that the new measures, which include a royalty on flared natural gas and stricter gas capture requirements, encroach upon the states’ ability to manage their energy resources and may escalate production costs.
At the heart of the legal battle is a rule introduced by the Bureau of Land Management (BLM), designed to minimize methane waste and pollution on federal lands. The regulations set a new precedent by establishing a monetary charge on flared natural gas, limiting permissible flaring volumes monthly, and instituting enhanced gas capture mandates for operators seeking drilling permits on federal territory.
North Dakota, which boasts a predominant oil output with natural gas as a secondary byproduct, views these new federal stipulations as particularly burdensome. State officials argue that the reservoir aging phenomenon—which causes an increase in the gas-to-oil ratio due to declining pressures, thus bringing more gas to the surface—coupled with persistently low gas prices, complicates the financial viability of developing necessary infrastructure to capture and utilize the gas effectively.
The lawsuit arrives on the heels of the Environmental Protection Agency’s (EPA) own robust final rule, announced at COP28, targeting a significant reduction of methane emissions from the oil and gas industry nationwide. This rule, set forth by EPA Administrator Michael S. Regan and President Biden’s National Climate Advisor Ali Zaidi, seeks an estimated 58 million tons cut in methane emissions from 2024 to 2038, delivering substantial economic and public health benefits.
The EPA’s rule touts the ability to capture nearly 400 billion cubic feet of valuable fuel each year, promoting both environmental and economic advantages. The rule’s benefits are projected to be vast, with estimates totaling net gains of $97 to $98 billion dollars over a 14-year period. These estimates include climate and some health benefits from reduced ozone exposure, but do not include the rule’s full health benefits of reducing other forms of harmful air pollution. The rule will lead to increased recovery of natural gas, valued at $7.4 to $13 billion from 2024-2038 ($2019), or $820 to $980 million annually.
However, the states involved in the lawsuit claim the federal government’s involvement impedes their own regulatory efforts and harms their economic interests. Senator Kevin Cramer of North Dakota expressed his support for the legal challenge, emphasizing that federal regulations such as these “make it more expensive and difficult to produce energy domestically.”
Relevant articles:
– Four US states sue over rule curbing methane leaks, reuters.com, 04/27/2024
– ND challenging BLM methane pollution rule in court; 3 other states join suit, Bismarck Tribune, Thu, 25 Apr 2024 19:18:00 GMT