On June 15, 2017, the U.S. Department of the Interior, Bureau of Land Management, published a notice of postponement of compliance dates in the Federal Register for the final rule “Waste Prevention, Production Subject to Royalties, and Resource Conservation.” Immediately after BLM published the Waste Prevention Rule in November of 2016, several industry associations filed petitions for judicial review, which are now consolidated in the U.S. District Court for the District of Wyoming. BLM states in the Federal Register notice that “[i]n light of the existence and potential consequences of the pending litigation, the BLM has concluded that justice requires it to postpone the compliance dates for certain sections of the Rule pursuant to the Administrative Procedure Act, pending judicial review.” According to BLM, new compliance dates will be announced at the conclusion of judicial review.
The Waste Prevention Rule is designed to reduce venting, flaring and leaks during production activities on federal and Indian lands by amending federal regulations that specify when produced gas lost through venting, flaring or leaks is subject to royalties. Operators must pay BLM royalties on natural gas flared in excess of the capture requirements stated in the final rulemaking. The final rulemaking also requires operators to inspect certain equipment twice a year, make timely repairs to any leaks found, and update certain equipment that BLM believes contributes to lost gas.