Interior Dept. moves on drilling regulation
Last fall, Interior Secretary Ryan Zinke began formally unraveling an Obama-era regulation that would raise the cost of drilling for energy on federal lands.
Environmental groups are already claiming the Interior Department’s moves are unlawful and environmentally disastrous. They’re wrong on both counts. The rule is illegitimate and unnecessary. Repealing it would save thousands of Buckeyes’ jobs.
The rule in question, finalized last year by the Bureau of Land Management, requires drillers to cut “flaring” in half on public lands. Drillers burn — “flare,” in industry parlance — gas from new wells to prevent excess pressure build-up. This practice is routine, necessary and more environmentally friendly than discharging the gas without burning it. The rule also requires drillers to install expensive new equipment and technology to limit discharges of methane, a greenhouse gas.
In May, the Senate had the chance to scrap the rule using the Congressional Review Act, which allows Congress to revoke regulations issued during the final months of a previous administration.
The House had already voted to strike down the regulation. And with Republicans holding 52 Senate seats, it seemed the rule was a goner. But in a shocking turn of events, three Republican senators sided with all Democrats to preserve the regulation.
The rule is a prime example of the executive overreach that both parties claim to oppose. Only the Environmental Protection Agency and state-level authorities — not the Bureau of Land Management — have authority to implement air quality rules.
The rule is also unnecessary. Methane and natural gas are both extremely valuable. Energy companies prefer to capture them whenever possible — they only flare gas when necessary.
Firms are already slashing methane emissions without heavy-handed government meddling. Natural gas drillers increased production by 33 percent from 2005 to 2015 while simultaneously reducing methane emissions by 38 percent. And oil drillers increased production by millions of barrels a day, even while cutting methane emissions 21 percent since 1990.
The regulation would have a negligible impact on U.S. greenhouse gas emissions. It would cut emissions by just 0.065 percent — not even a drop in the proverbial bucket.
It would, however, severely harm workers. The regulation could cost $279 million every year, with small businesses bearing the brunt of these costs. These firms could each spend up to $63,000 annually to comply with the regulation. Many small energy companies would find the compliance costs prohibitively expensive and have to lay off workers or forgo hiring new ones.
That’s bad news for the 255,000 Ohioans employed directly or indirectly by the state’s oil and gas industry. Folks directly employed by the sector earn $76,000 on average — well above the typical Ohioan’s salary of $45,000. The industry contributes $28 billion to the state economy — nearly 6 percent of Ohio’s GDP.
The regulation would jeopardize these jobs and investment. Sen. Rob Portman put it best: “[The rule will] hurt our economy and cost jobs in Ohio by forcing small, independent operators to close existing wells and slowing responsible energy production on federal lands.”
Under the Obama administration, the BLM burdened Ohio businesses and put jobs at risk by designing a costly, ineffectual methane regulation. Luckily, the Interior Department has taken the first steps toward nixing the rule. Let’s hope it finishes the job.
Brandi Wielgopolski is a Columbus-based tax and budget contributor at the Heartland Institute.