The Interior Department is considering including emissions requirements in leases for companies that drill for oil and gas on federal property, Interior Deputy Secretary David Hayes said today.
"Typically the leases between the Interior Department and oil and gas developers have not focused on emissions, and there's some real opportunities there," Hayes said. "We're going to be reaching out to industry and looking at our leasing structure and seeing what opportunities we can provide. ... One way or another, we're going to tackle that issue."
Hayes added that Ned Farquhar, Interior deputy assistant secretary for land and minerals management, has been looking into "potential initiatives dealing with methane emissions, for example."
The move may tie into an executive order signed by President Obama last month requiring federal agencies to set 2020 emission-reduction targets for greenhouse gases, Hayes said. The order requires agencies to set targets within 90 days (E&ENews PM, Oct. 5).
"Part of that deals with a question of whether our lessees should also be counted and their emissions should be counted," Hayes said, adding that Interior officials are in discussions with the White House Council on Environmental Quality about that now.
"Whether we do it as part of that governmentwide initiative or our own initiative ... there's some great opportunities there for emissions reductions, and we'll be looking forward to working with our lessees toward that end," Hayes added.
Lee Fuller, vice president of government relations at the Independent Petroleum Association of America, said he had not heard of the initiative and was not sure of the scope of Interior's authority to include such provisions in a lease or an application for a permit to drill.
"I would think that the resource management plans that are devised for an area take the emissions implications into account as they develop them," Fuller said. "But ... it would certainly influence the leasing process if it became too burdensome."
Oil companies lose trillions of cubic feet of natural gas each year as inefficient producers burn or release gas and as old or faulty pipelines leak tons more.
A voluntary U.S. EPA program has had some success, and the Minerals Management Service has been pressed to clamp down on flaring by offshore platforms. But the Bureau of Land Management has no specific program to address the problem, and many see BLM forgoing millions of dollars in lost tax revenue by not requiring petroleum companies that operate on federal lands to capture and sell as much oil-field gas as possible (Greenwire, May 19).