Oil and gas producers notch a win in federal court

CASPER - Wyoming's oil and gas producers have won a reprieve with a federal court injunction against the Bureau of Land Management's methane regulation rule, stalling for now regulatory requirements that would have added millions of dollars in overhead for producers and threatened to force many of Wyoming's small operators out of business, industry representatives say.

'The left hand of the government does not know what the right hand of the government is doing'

The court declared the BLM's "Waste Prevention Rule" - which tightens methane emissions standards and eliminates royalty-free flaring - is both superfluous and contradictory to other federal laws.

It collides with preexisting federal mandates to collect royalties on vented or flared gas under the Inflation Reduction Act, while simultaneously usurping state's sovereign authority to regulate emissions under the federal Clean Air Act, among other inconsistencies, the court wrote.

The rule is "an example of where the left hand of the government does not know what the right hand of the government is doing," according to the court.

The injunction does not mean Wyoming and co-plaintiff states will "ultimately win," but rather have a "'fair chance of prevailing," the court explained. The BLM may still prevail in its goal of clamping down on methane emissions on public lands and "communitized" parcels with jurisdictional overlap.

Public health and valuable resources

For the agency, the rule is a necessary safeguard of both public health and public resources.

It's estimated that in 2019 the combined venting from oil storage tanks, equipment leaks and other pneumatic instruments equated to a total loss of natural gas valued at $53.7 million.

Between 2010 and 2022, venting and flaring of onshore federal leases averaged around 44.2 billion cubic feet per year - enough to meet the energy needs of 675,00 homes - according to data from the Department of Interior.

It's the latest in a years-long battle over methane emissions that began in 2016 when the agency issued a rule requiring producers to flare rather than vent excess methane gas, which is known to reduce overall environmental impacts. That rule was later overturned by a federal court.

Then, in 2024, the BLM released its updated methane waste prevention rule, drawing on new science, information and policy prerogatives.

Lots at stake

The final decision will help clarify an area of regulatory uncertainty on a topic with growing concern among stakeholders.

As one of the most potent greenhouse gasses, methane regulation is central to climate policy. And as the leading input for electric generation, making the most of US natural gas reserves is seen as an important piece of domestic energy security.

In 2019 alone, $500 million worth of natural gas was wasted during oil and gas extraction on U.S. public and tribal lands, according to economic analysis from the Environmental Defense Fund.

In either case, local leaders are celebrating for the moment.

"It is encouraging to see Wyoming's fight against unreasonable BLM policies and the Biden-Harris administration's agenda producing tangible results for our hometown companies," said Gov. Mark Gordon. "This fight is nowhere near completed, and there is still much work to be done to protect Wyoming's economy from the onslaught of other regulations."