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LETTER: Governors urge BLM to defer to state regulations for methane emissions reduction

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April 22, 2016

Neil Kornze
Director, Bureau of Land Management
U.S. Department of the Interior
Mail Stop 2134 LM
1849 C Street N.W.
Washington, D.C. 20240

Dear Director Kornze:

The Western Governors’ Association (WGA) appreciates the opportunity to comment on the Bureau of Land Management’s (BLM) proposed rule, Waste Prevention, Production Subject to Royalties, and Resource Conservation (81 FR 6615, February 8, 2016) (Proposal).

STATEMENT OF INTEREST

WGA represents the Governors of 19 western states and three U.S.-flag islands. The Association is an instrument of the Governors for bipartisan policy development, information exchange and collective action on issues of critical importance to the western United States.

Reduction of methane emissions can enhance air quality, and capture a valuable resource. WGA Policy Resolution 2015-02, Methane Emissions Regulation (attached to these comments and incorporated by reference) states, “we view methane as a valuable natural gas, the capture and commoditization of which can be beneficial for state economies and for the energy industry.”

BACKGROUND ON WESTERN GOVERNORS’ POSITION

States have statutorily recognized authority to manage air quality within their borders. The Clean Air Act (CAA) recognizes that states should take a lead role in implementing various provisions of the CAA. Emission of chemical substances affecting air quality differs based on local industry, geography and other state-specific factors.

Methane is a potent greenhouse gas – estimated to have a comparative impact 20-30 times greater than carbon dioxide over a 100-year period when vented into the atmosphere. Properly managed, however, methane is also a valuable commodity with a variety of industrial applications.

BLM has taken steps to acknowledge existing state regulatory frameworks for methane emissions reduction. More work is needed in consultation with Governors and state regulators to ensure the Proposal defers to existing state regulatory frameworks, and does not encroach on air regulatory authority reserved to the states.

Consultation with the States

This issue highlights an ongoing concern of Western Governors’ about the nature, scope and timing of consultation between federal agencies and Governors. WGA Policy Resolution 2014-09, Respecting State Authority and Expertise, states “Governors have significant responsibilities for the condition of land, air, forest, wildlife, and water resources as well as energy and minerals development, for the lands within their state’s borders.”

Regulation of methane emissions from the oil and gas sector must be adapted to local conditions and circumstances. States already have the dual responsibilities to manage programs to protect air quality and to regulate oil and gas operations. Governors are uniquely qualified to assume the responsibility of methane regulation. It is imperative that BLM work with Western Governors and state regulators.

State Variances Process

Many western states, in cooperation with industry, have already implemented regulatory or policy strategies to reduce methane emissions from oil and natural gas operations. State regulations encourage the capture of methane emissions, which reduces emissions and provides for expansion of the methane market.

Despite existing state regulations, BLM is contemplating federal regulation. Section V.I.9(a) of the Proposal describes a variance procedure BLM will create for a state to request that aspects of that state’s methane regulation apply in lieu of the BLM rule.

There are similarities between the variance procedure in this Proposal and in the Oil and Gas; Hydraulic Fracturing on Federal Lands (Hydraulic Fracturing Rule) rule.(1) BLM should seek input on states’ experience with the Hydraulic Fracturing Rule’s variance request procedure. This information should be used to inform the variance request procedure suggested in the Proposal. At a minimum, the following issues require consideration:

  • Additional Information and Timelines

Clarification is needed on BLM review of a state variance request. The Proposal contemplates that this authority will reside with BLM State Directors. Section V.I.9(a) states, “[t]o approve a request, the BLM State Director would have to determine that the [s]tate or tribal regulation meets or exceeds the requirements of the provision(s) for which the [s]tate or tribe sought the variance,” and that the state regulation is, “consistent with the terms of the affected Federal or Indian leases and applicable statutes.” The Proposal stipulates that, in a variance request, states will be required to:

    • Identify the specific provisions of the BLM requirements for which the variance is requested;
    • Identify the specific state or tribal regulation that would substitute for the BLM requirements;
    • Explain why the variance is needed; and
    • Demonstrate how the state or tribal regulation would satisfy the purposes of the relevant BLM provisions.

These requirements need to be clarified in consultation with Governors and state regulators. This clarification will ensure all parties have clear and consistent expectations of submittal and review of variance requests.

  • BLM Implementation Guidance Document Needed in Advance of Finalization

The Proposal is silent on BLM’s formal implementation guidance for use in completing variance requests. This should be completed and provided to states before the rule goes into effect. It should be constructed in consultation with Governors and state regulators. This will ensure that state variance requests are submitted in a manner preferred by the agency.

At a minimum, the following issues should be negotiated with states and clearly articulated in guidance:

    • Clear, consistent criteria outlining state regulatory programs eligible for variance, including description and assignment criteria;
    • Required timelines for review and approval of a state variance request;
    • Direction on when a BLM State Director’s decision on variance will be subject to review, revision or veto from BLM Headquarters;
    • Provisions that a variance will not be eligible for rescission, unless the state program fails to meet the criteria; and
    • Guarantee states the right to appeal if a variance is rescinded (discussed in further detail below).
  • State Right of Administrative Appeal Needed

The Proposal specifies that, “the [BLM] decision over a variance request is not subject to administrative appeal [to the Interior Board of Land Appeals] under 43 C.F.R. Part 4” and would, “reserve the BLM’s authority to rescind a variance or modify any condition of approval in a variance.”(2) If a variance request can be denied or rescinded unilaterally – without a right of appeal – states will be left without assurance that existing regulations will not be duplicated or preempted.

There is little value in a variance if it does not give states certainty regarding their authority to implement state programs without fear of contradiction or duplication at the federal level. Variances that meet the criteria set forth in the rule should not be subject to rescission or modification.

BLM’s failure to afford states an opportunity for administrative appeal through regular channels raises equity concerns.(3) Barring states from exercising the same right for administrative appeal as other parties operating under BLM rules and regulations creates questions about the agency’s intention to work collaboratively with states in meeting air quality and land management objectives.

CONCLUSION

We request that BLM engage in meaningful consultation with Governors and state regulators before rule finalization to produce an implementation guidance document in line with these comments.

Sincerely,

Matthew H. Mead
Governor of Wyoming
Chairman, WGA

Steve Bullock
Governor of Montana
Vice Chair, WGA

(1) 43 CFR 3160, March 26, 2015.
(2) Section V.I.9(a) of the Proposal.
(3) Section 3162.3-3(k) of the Hydraulic Fracturing Rule.

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