Louisiana energy regulators to decide on rule barring oil well venting, flaring

Louisiana energy regulators to decide on rule barring oil well venting, flaring

Louisiana Oil & Gas Association By Michael Carroll Aug 23, 2023

The Louisiana Department of Natural Resources in the weeks ahead will decide whether to advance a rule to end routine venting and flaring of oil wells around the state – something environmentalists say will put the brakes on climate change.

Monday was the deadline for interested parties to file comments with the DNR about the proposed rule. The Environmental Defense Fund has argued for a comprehensive ban on venting and flaring, saying the action would reduce the release of greenhouse gases, stop the waste of natural gas and generate jobs in the methane-mitigation industry.

Flaring refers to how operators burn off some of the natural gas produced from their wells rather than capturing it, and venting occurs when natural gas is purposely released into the atmosphere.

“In 2019, Louisiana oil and gas producers wasted approximately 5.2 billion cubic feet of methane through venting and flaring alone – that’s $16 million of natural gas,” the EDF said in a statement last month. “That’s enough wasted gas to supply all the households in Baton Rouge for over a year and a half.”

The proposed rule, however, does provide for exceptions when prohibitions on flaring and venting would cause an economic hardship for the well’s operator.

“The venting of natural gas from any well producing in the state of Louisiana is hereby expressly prohibited except in those instances where permissible flaring as specified … is not an economical or safe alternative,” the proposed rule states.

Louisiana’s oil industry has expressed concerns about such a rule, but Mike Moncla, president of the Louisiana Oil and Gas Association (LOGA), said the DNR’s Office of Conservation has been receptive to industry comments.

“In the original form being pushed by the Environmental Defense Fund, yes, it would have been devastating to the oil and gas industry and our state’s revenues,” Moncla said in an email to the Louisiana Record. “However, the Office of Conservation has been really good to work with on this topic. Several of the comments that we provided to their April Potpourri were adopted into the July Notice of Intent.”

The rule also has many more hurdles to clear before it can take effect, he said.

“Whatever this new rule may look like, it still may have to pass through a legislative oversight committee, not to mention a new governor before being implemented,” Moncla said. “So, the verdict is still out on this.”

Some energy companies have said that to comply with a rule barring venting and flaring would cost millions of dollars and imperil the operation of the companies. The proposed rule may also amount to a “regulatory taking” under the Constitution’s Fifth Amendment, they say. 

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First, recognize that this article is from the industry prospective - published by the Louisiana Oil & Gas Association.  Second, recognize how it attempts to conflate Louisiana oil with Louisiana gas.  The regulation is about the venting associated with oil wells, not gas wells - "The Louisiana Department of Natural Resources in the weeks ahead will decide whether to advance a rule to end routine venting and flaring of oil wells around the state..". 

Then you have this from the head of president of the Louisiana Oil and Gas Association (LOGA), “In the original form being pushed by the Environmental Defense Fund, yes, it would have been devastating to the oil and gas industry and our state’s revenues.”  That original form Mr. Moncla references did not include the exemption for the following: "The proposed rule, however, does provide for exceptions when prohibitions on flaring and venting would cause an economic hardship for the well’s operator.  That's an exemption big enough to drive a shrimp boat through.

As to whether this regulation would imperil company operations:  "Some energy companies have said that to comply with a rule barring venting and flaring would cost millions of dollars and imperil the operation of the companies." , the specific energy companies are not stated and this whole industry PR push has another reason which is to conflate "state oil" with gas and offshore federal oil.  For those that like to do a little SONRIS research, and I do a lot basically every day, the data shows that "state oil", not federal oil, has been on a steady decline for at least 25 years.  And at the annualize rate of decline, Louisiana oil will reach theoretical zero in about ten years.  The fact that Louisiana has no unconventional oil play is the reason that the decline in state oil production, jobs and state revenue will continue to its inevitable end.  Unfortunately, Louisiana citizens and voters are unaware of this reality and Louisiana politicians are loath to make this fact public.

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