Submittal of API Comments to BLM Waste Prevention Rule RIN 1004-AE53

With this comment letter, submitted on April 23, 2018, API supports the Proposed Rule, which would significantly improve upon BLM’s 2016 effort to regulate venting and flaring of gas from BLM and Indian lands (“2016 Rule”), and more properly reflect the principles of the previously-applicable 1979 Notice to Lessees and Operators of Onshore Federal and Indian Oil and Gas Leases, Royalty or Compensation for Oil and Gas Lost (“NTL-4A”). The Proposed Rule also properly reflects that the MLA authorizes venting and flaring restrictions for the sole purpose of preventing “undue waste” of federal mineral resources. See 30 U.S.C. §§ 187 & 225. The Proposed Rule would incorporate into regulation the lease-specific concept of “waste” as intended by Congress when enacting the MLA, and incorporated by the Department into its oil and gas leases and regulations from the inception of its oil and gas leasing program.

Accordingly, API supports the Proposed Rule’s reinstatement of BLM’s pre-2016 understanding that, in the context of venting and flaring, “waste” is an avoidable loss of oil and gas where the cost of capture exceeds the lost economic value of the production, and that the agency may not impose on diligent operators requirements that cost more than the economic value of the resources they are required to conserve. This approach is also consistent with decades of BLM practice and guidance, including under NTL-4A.

This comment letter is intended in part to help ensure that this principle is consistently applied throughout the Proposed Rule.