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Department of the Interior, Bureau of Land Management: Waste Prevention, Production Subject to Royalties, and Resource Conservation

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Highlights

GAO reviewed the Department of the Interior, Bureau of Land Management's (BLM) new rule on waste prevention, production subject to royalties, and resource conservation. GAO found that (1) the final rule (a) requires operators to take various actions to reduce waste of gas, establishes criteria for when flared gas will qualify as waste and therefore be subject to royalties, and clarifies which on-site uses of gas are exempt from royalties; and (b) focuses on several points or processes in the oil and gas production process where BLM determined waste-prevention actions are most effective and least costly: venting and flaring of associated gas from development oil wells (routine flaring occurs at oil wells that dispose of gas as a waste product); gas leaks from equipment at the well site or elsewhere on the lease; operation of high-bleed pneumatic controllers and certain pneumatic pumps; gas emissions from storage vessels; downhole well maintenance and liquids unloading; and well drilling and completions; and (2) BLM complied with the applicable requirements in promulgating the rule.

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