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DOI in the dark on amount of gas lost from federal lands, GAO finds

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DOI in the dark on amount of gas lost from federal lands, GAO finds

The U.S. Department of the Interior does not have a goodhandle on how much gas producers are venting and flaring on federal lands, theGovernment Accountability Office concluded in a report released July 21.

The DOI's data collection instructions are too unclear toget consistent methane emissions estimates from oil and gas producers onfederal lands, the GAO said. Lacking specific instructions for how to estimateemissions, operators have been using inconsistent methods. In some situations,operators rely on gas-to-oil ratios, while under other circumstances, producersuse equipment specifications and highly variable engineering assumptions, thereport noted.

With such erratic data, the department cannot tell whetheroperators are minimizing the amount of gas they are wasting when producing onfederally leased land, Congress' government watchdog agency concluded.

"Interior's limited guidance to operators on how toreport natural gas emissions on the [oil and gas operations reports] may hinderthe extent to which it can account for such emissions," the GAO reportsaid. "Without consistent accounting, Interior does not have theinformation it needs to have reasonable assurance that it is minimizing wasteon federal oil and gas leases."

Historically, the department has focused on collecting datarelated to produced — rather than emitted — hydrocarbons, in large part becausethe emitted resources were not ascribed royalty value. Now, the DOI's Bureau ofLand Management is supposed to decide whether gas lost through venting orflaring is unavoidably lost and royalty-free or avoidably lost and,consequently, subject to royalties.

The BLM has not been consistently following its own guidancewhen approving operators' special requests to vent or flare gas without havingto pay royalties. The agency has approved some requests without having thenecessary documentation, and different BLM field offices applied the bureau'sguidance differently, the GAO found.

The report said that in 2014, the bureau got 1,281 ventingor flaring requests, about 90% of which did not have the right documentation,and that the bureau approved about 70% of these requests. For roughly half ofthe approvals, the bureau let the operators flare the gas without payingroyalties, the GAO said.

The GAO recommended that the BLM and the DOI's Office ofNatural Resources Revenue lay out clearer guidance on a few fronts. Operatorsappear to need more instruction on how to estimate methane emissions from federaloil and gas leases; how to account for flaring; how to report certain emissionsthat are not clearly covered by guidance, such as those from storage tanks andwell completions; and how to differentiate between combusted and non-combustedgas that operators use on-site.

The DOI in January also proposed rules for reducing methane emissions on federaland tribal lands, estimating that the regulations would per year. The nonprofit Western Environmental Law Center said in a that in 2013, thenation wasted an estimated $227 million of gas from federal land.