American Oil and Gas Reporter - August 2023 - 18

IndustryDigest
technology to produce high-quality,
long-term data for emitters,
contributing important insights into
emissions trends as we work to protect
people and the planet, " maintains
Joseph Goffman, principal deputy
assistant administrator for EPA's
Office of Air and Radiation.
EPA says its proposed amendments
to subpart W of the GHG reporting
program aim to address gaps in
facilities' reported total methane
emissions by adding several new
covered sources. These include " other
large release events, " which EPA
indicates will capture abnormal
methane emission events for which
existing methods do not fully account.
The agency says the amendments
also add new or revise existing
calculation methodologies to:
· Improve the accuracy of reported
emissions data for methane and other
GHGs and incorporate additional
empirical data;
· Incorporate new technologies such
as remote sensing for quantifying
emissions from other large release
events; and
· Collect data at a more granular
level to support data verification and
transparency.
In addition, EPA indicates it is
proposing determinations to establish
whether data submitted to the agency
under the proposed revisions will be
entitled to confidential treatment.
EPA proposes that most of the
revisions should become effective on
Jan. 1, 2025, and that reporters will
implement most of the changes
beginning with reports prepared for the
2025 reporting year and submitted by
March 31, 2026.
According to EPA, the Inflation
Reduction Act directs the agency to
impose and collect a charge on methane
emissions that exceed certain waste
emissions thresholds. The law requires
EPA to revise subpart W requirements
to ensure reporting is based on
empirical data and accurately reflects
relevant emissions, and to allow owners
and operators of applicable facilities to
submit empirical emissions data to
demonstrate the extent to which a
charge is owed.
EPA also expresses plans to release a
separate proposed rule about
implementing the waste emissions
charge in fall 2023. ❒
18 THE AMERICAN OIL & GAS REPORTER
DOI Leasing Proposal
Seeks To Hike Cost Of
Public Lands Leasing
WASHINGTON-Although the U.S.
Department of the Interior claims that
the U.S. Bureau of Land Management's
newly proposed revisions to its oil and
gas leasing regulations will ensure a
balanced approach to development,
critics say it will drive smaller operators
off public lands. BLM unveiled the
rulemaking on July 20.
" Interior's proposed rule is another
attempt by the Biden administration to
reduce oil and natural gas production on
federal lands, " assesses Dan Naatz,
executive vice president and chief
operating officer of the Independent
Petroleum Association of America.
" These excessive increases on bonding
rates and other activities will hamper
independent producers' ability to
operate on federal lands.
According to DOI, its proposal seeks
to revise fiscal terms of the onshore
federal oil and gas leasing program,
including bonding requirements, royalty
rates and minimum bids. The proposed
rule aims to codify provisions made by
Congress in the Inflation Reduction Act
and the Bipartisan Infrastructure Law, as
well as other Biden administration
initiatives.
DOI's proposal calls for increasing
the minimum lease bond to $150,000
and the minimum statewide bond to
$500,000, while eliminating nationwide
and unit bonds. " The existing lease
bond amount of $10,000-established
in 1960-no longer provides an
adequate incentive for companies to
meet their reclamation obligations, nor
does it cover the potential costs to
reclaim a well should this obligation not
be met, " the department asserts. " The
current, outdated bond requirement
increases the risk that taxpayers will
end up covering the cost of reclaiming
wells in the event the operator refuses to
do so or declares bankruptcy. "
The department proposes raising
royalty rates to reflect the IRA, which
calls for royalty rates for leases issued
for 10 years after the law's effective date
to be 16.67%. After Aug. 16, 2032, the
rate of 16.67% will become the
minimum royalty rate. The rule also
seeks to codify an IRA provision that
increases the national minimum bid from
$2 to $10 an acre, or fraction thereof, and
after 10 years regularly adjust that
minimum for inflation, DOI says.
The department says its proposal for
base rental rates also seeks to
implement aspects of the IRA. For
leases issued within 10 years after the
law's enactment, the proposal includes a
rate of $3 an acre, or fraction thereof,
each year during the first two years after
lease issuance; $5 per acre a year, or
fraction thereof, for the following six
years; and then $15 an acre, or fraction
thereof, each year thereafter. After Aug.
16, 2032, those rental rates will become
minimums and are subject to increase.
The department says the rulemaking
also strives to steer oil and gas
development away from important
wildlife habitat or cultural sites. It also
includes the IRA's new fee for
expressions of interest, which is $5 an
acre, or a fraction thereof.
" The BLM's proposal reflects a
baseline disregard for the challenges
that producers face in putting drilling
packages together when they operate on
federal lands-not only are companies
working with the federal government,
but also states and private landowners, "
Naatz says. " Companies pay everincreasing
rents on leases as they
assemble a framework for drilling and
submit complex environmental
stewardship plans, but the Biden
administration continues to up the ante
in its effort to reduce production despite
growing energy needs. " ❒
Agencies Initiate Funds
To Help Operators
Cut Methane Emissions
WASHINGTON-A month after
some prominent congressional voices
called on the Biden administration to
launch a statutorily-created grant
program to help operators cut their
methane emissions, a couple executive
branch agencies have taken their first
steps to do so.
The U.S. Environmental Protection
Agency, U.S. Department of Energy
and DOE's National Energy
Technology Laboratory released a
notice of intent announcing the first in a
series of funding opportunities to
monitor and reduce methane emissions
from the oil and gas sector or restore
well sites. Through a newly initiated
interagency agreement, EPA and DOE
say they also will partner to offer
American Oil and Gas Reporter - August 2023

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