Welcome to the Star-Tribune’s Energy Journal, a play-by-play of the past week in Wyoming’s wild world of energy. I’m your energy and natural resources reporter, Camille Erickson. Sign up to receive the newsletter in your inbox each week here.
More court litigation likely coming to methane emissions regulations in Wyoming
Back in 2016, the state of Wyoming challenged the Obama administration's new federal regulations on methane emissions. But when the Trump administration assumed office and moved to repeal the rule — known as the Waste Prevention Rule — the court case was placed on hold.
Yet, a recent court decision could bring the case back to life.
On Tuesday, the U.S. District Court for Wyoming lifted a stay on the case against the rule. The court's recent move will allow Wyoming, along with other fellow energy-dependent states including Montana, North Dakota and Texas, to continue their objection to the Obama-era federal methane regulations.
The Waste Prevention Rule set out to limit the amount of methane and other pollutants emitted during natural gas production on public and tribal land.
The decision comes on the heels of another federal court decision this month involving the same rule.
A California federal district court recently ruled to reinstate the Waste Prevention Rule. If upheld, the Bureau of Land Management will impose the policy, which the Trump administration had rejected, in less than three months.
In statements made Wednesday, Gov. Mark Gordon criticized the California court's ruling, saying the Obama administration's 2016 Waste Prevention Rule was overreaching and harmful.
“In a thorough, but thoroughly incorrect ruling, the judge rejected the Trump Administration’s commonsense approach to the management of waste gas,” Gov. Mark Gordon said. “The Trump Administration recognized and respected Wyoming’s longstanding and effective regulations, while the Obama Administration sought to impose a one-size-fits-all mandate that imposes tremendous costs on oil and gas producers to save small amounts of natural gas.”
The Trump administration had considered the meatier regulatory requirements burdensome and costly to the private sector and set out to reverse them upon assuming office. Following the president’s cue, the Bureau of Land Management announced last year it would rescind provisions of the rule to reduce regulatory burdens on energy companies.
“Wyoming will be reviewing its options to appeal the California decision, but in the meantime we will do all we can to avoid the harm that the Obama-era rule will cause in this particularly difficult time for Wyoming’s energy industry,” Gordon added.
The state of Wyoming was an intervenor-defendant in the recent court case in California and continues to support the Trump administration’s revisions to the Waste Prevention Rule.
Wyoming has not adopted the Bureau of Land Management's 2016 Waste Prevention Rule, which would also apply methane emission limits and standards to existing wells on federal and public lands, as well as collect royalties from wasted gas. A similar statewide policy on existing wells has also not been introduced during Gordon's time in office.
"What struck me as unfortunate about the governor's statement is it doesn’t seem to be considering the considerable taxpayer benefits that are embedded in the 2016 Bureau of Land Management Waste Prevention Rule," said Jon Goldstein, director of regulatory and legislative affairs at the Environmental Defense Fund.
Conservation advocates considered the U.S. District Court for the Northern District of California's decision a win for air quality and the economy.
Lost gas translates into lost tax revenue for Wyoming. A study by the Wyoming Outdoor Council in 2018 concluded the state loses approximately $8.8 million to $16.1 million in revenue every year from wasted natural gas. The more gas operators are able to emit, the more royalty money goes down the drain. The Waste Prevention Rule could change that, advocates said.
"At a time when the state is looking at serious revenue shortfalls," Goldstein continued, "I would hope the governor would make efforts to reduce methane emissions and add to the state's royalty coffers."
The Wyoming Outdoor Council, an organization involved in the case, echoed Goldstein's remarks.
"The BLM's 2016 update to its 30-year-old waste regulations was long overdue," Executive Director Lisa McGee said in a statement. "Many companies, including some Wyoming producers, are voluntarily meeting the standards not only because it's the right thing to do to protect public health and clean air, but because they can recoup the upfront costs by keeping methane in the pipeline instead of venting it off or losing it to leaks."
When operators drill for oil, natural gas also comes up to the surface in the solution. Given the low market value of natural gas, operators often consider the resource less a commodity and more a byproduct. There also may not be pipeline systems near an oil site to economically dispose of the byproduct. Building pipeline infrastructure can be economically prohibitive, so operators will often look to flaring to dispose of the unneeded gas on site.
The practice of flaring comes with its fair share of environmental and health consequences.
Flared gas emits methane, a compound considered 84 times more potent in warming the climate than carbon dioxide over a 20-year period, along with other volatile organic compounds. Critics of flaring also consider the practice as wasteful: It discards a nonrenewable natural resource. Since the escalation in hydraulic fracturing and horizontal drilling, the volume of flared gas associated with domestic oil production has exploded.
According to the U.S. Energy Information Administration, Wyoming ranks fourth in the nation for most flaring, but the state’s rates are still far less than hotspots like the Bakken oil fields in North Dakota or the Permian Basin in west Texas and New Mexico.
Methane and other emissions can also enter the atmosphere if equipment at oil and gas sites falters and leaks.
Last week's news roundup
- Sen. John Barrasso sent a letter to the Department of Energy urging the federal agency to set up a satellite office in Wyoming to bolster support for the state’s dominant energy sector as it weathers “serious economic headwinds” during the COVID-19 pandemic. "A permanent DOE presence in the state will allow us to build upon this close relationship and further energy research, development and commercialization objectives of Wyoming and the nation,” Barrasso wrote in the letter sent Friday.
- Wyoming's Public Service Commission plans to discuss PacifiCorp’s plan to close coal-fired power plants in Wyoming following an investigation into the proposal this month.
- Several states are continuing to pressure the Trump administration to halt the leasing of public lands for coal to stop the Trump administration from selling coal from public lands.
OIL & GAS
WIND & SOLAR
- The state's largest utility, Rocky Mountain Power, recently hired approximately 40 displaced oil and gas workers who lost work in Converse County during the economic collapse of energy markets. The newly hired team is now working at the neighboring Cedar Springs wind construction project. Between Sweetwater and Carbon counties, the utility has employed 1,248 this month.
- Leaders in wind energy in Wyoming will be celebrating wind energy week and Energy Day from noon to 4 p.m. on Aug. 3 at the Carbon County Fairgrounds in Rawlins.
- In a move cheered by Wyoming's uranium industry, Gov. Mark Gordon endorsed an agreement with the U.S. Environmental Protection Agency and Nuclear Regulatory Commission on Thursday to clarify federal and state regulation of in-situ uranium production and cleanup.
- The U.S. Council on Environmental Quality published its final revisions to regulations implementing the National Environmental Policy Act, known as NEPA, with the aim of “streamlining and modernizing” the act. In the week since President Donald Trump announced the monumental changes, Wyoming lawmakers, citizens and industry leaders have responded — heaping both praise and disapproval on the regulatory overhaul. Hear what Wyomingites had to say here.
A bipartisan bill called the Great American Outdoors Act dedicates nearly $3 billion to conservation projects, outdoor recreation and maintenance of national parks and other public lands. It secured final legislative approval.
Last week in numbers
Friday oil prices:
- West Texas Intermediate (WTI) $41.07, Brent (ICE) $43.31
Friday natural gas:
- Henry Hub $1.68, Wyoming Pool $1.48, Opal $1.49
Baker Hughes rig count:
- U.S 251 (-2), Wyoming 1 (-0)
Quote of the week
“In its haste, BLM ignored its statutory mandate under the Mineral Leasing Act, repeatedly failed to justify numerous reversals in policy positions previously taken, and failed to consider scientific findings and institutions relied upon by both prior Republican and Democratic administrations,”
— Judge Yvonne Gonzalez Rogers wrote in a court decision which blocks an attempt by the Trump administration to roll back methane regulations.
Follow the latest on Wyoming’s energy industry @camillereports