Wasting Gas and Losing Revenue

Wasting Gas and Losing Revenue

Energy & Natural Resources  | Quick Takes
Mar 12, 2017  | By  | 4 min read

Senators John McCain and Jeff Flake have long been champions of rooting out waste in the federal government.

We applaud that and have given both of them our prized “Mr. Smith Goes to Washington” award.

Arizona’s Senators may get a chance to vote on another government waste issue. This time it will be on a fast-track measure to repeal a rule that helps get taxpayers a fair return on more than $440 million in natural gas wasted every year from development on federal lands. Sens. McCain and Flake should take a step back from the rapid push to end regulatory overreach, vote against full repeal, and help curb this waste of taxpayer resources. Instead of repeal, which would legally preclude any similar rule in the future, they should work with the Trump Administration to improve the new rule.

The Bureau of Land Management oversees millions of acres of federal land located mostly in the American West. The BLM is charged by Congress to ensure a fair return to taxpayers and minimize waste from the development of natural resources on these lands. Since the advent of hydraulic fracturing or “fracking” in recent years, oil and gas development has increased dramatically. So, too, has the amount of royalty-free natural gas wasted through leakage or flaring during drilling. The total amount of natural gas flared from BLM — administered leases doubled from 2009 to 2013 — losing enough gas to serve more than six million households for a year.

Thankfully, the problem of royalty free gas wasted in federal operations is getting attention. In 2014, my organization, Taxpayers for Common Sense, released our first report tracking millions of dollars in lost taxpayer revenue from wasted gas. In 2010, Congress’ own watchdog, the Government Accountability Office (GAO) reported that 40 percent of natural gas being vented and flared from onshore federal leases could have been economically captured with the use of control technologies already on the market. The GAO also found Interior’s oversight of the oil and gas program had significant limitations and added it to their list of government programs considered to have “greater vulnerabilities to fraud, waste, abuse, and mismanagement.”

The vote in the Senate is important because it would severely limit any opportunities for fixing this well-documented problem. The law that allows Congress to overturn federal rules, the Congressional Review Act, stipulates that if a rule is repealed, a similar rule cannot be issued—ever—without an act of Congress. This would lock taxpayers into years of waste, as the problem continues to grow worse. If the Senate overturns the methane waste rule, it will make the original waste guidelines drafted more than 35 years ago effectively permanent.

Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program Fact Sheet

Repealing the BLM methane rule will lead to more wasted gas and hundreds of millions of dollars in lost taxpayer revenues. If the rule needs fixing, then let’s fix it. But let’s not take solutions of the table. Congress and the new Administration must stop the costly waste of natural gas—it’s bad business and bad for taxpayers.

Originally published on October 27, 2017 in Sierra Vista Herald