(WASHINGTON) A new economic analysis commissioned by Environmental Defense Fund and Taxpayers for Common Sense finds oil and gas companies operating on U.S. public and tribal lands wasted over $500 million worth of gas in 2019, the most recent year of data available that is reflective of the industry.
This waste occurs when gas is either flared, vented or leaked from oil and gas infrastructure, and the analysis – conducted by Synapse Energy Economics — comes as the Bureau of Land Management accepts public comment on a proposed rule to reduce methane waste on public lands. Separately, the Environmental Protection Agency is currently collecting public comment on its proposed rule to reduce methane emissions from oil and gas facilities nationwide.
“We can’t continue to allow half a billion dollars’ worth of taxpayer-owned resources to go to waste every year,” said Jon Goldstein, Sr. Director of Regulatory & Legislative Affairs at EDF. “The Biden administration has a clear opportunity to step up with strong rules that stop waste and pollution from practices like routine flaring to protect the public interest. These resources should benefit priorities like education and infrastructure, not be released into the atmosphere to undermine our climate and health.”
Methane is a potent greenhouse gas with 84 times the warming power of carbon dioxide over a 20-year timeframe and is often accompanied by other local air pollutants. Because methane is the main component of natural gas, it also represents a waste of an energy resource every time it is released from the supply chain.
According to the analysis, the 163 billion cubic feet of oil and gas methane wasted on public lands translates into nearly $64 million in lost revenue for tribes, states and the federal government. That’s lost funding that would otherwise support priorities like education, infrastructure and public services.
“This new reporting further confirms that hundreds of millions of dollars’ worth of natural gas is being lost each year,” said Taxpayers for Common Sense Vice President Autumn Hanna. “Not only is this an unnecessary waste of a valuable natural resource, allowing drillers to release and burn off natural gas royalty-free in nonemergency situations, instead of capturing and selling it, is a blatant giveaway to the industry. It is time for the administration to stop this waste.”
This analysis also highlights that flaring is a leading cause of waste, responsible for 54% of all methane wasted on public lands in the U.S. That directly translates into nearly $275 million worth of gas lost through flaring alone.
Several states such as Colorado and New Mexico have demonstrated leadership with strong state rules to stop pollution and waste from routine flaring, creating an important foundation for BLM and EPA to build on with federal standards.
“Methane venting, flaring and leaks on public lands not only harm our climate but also waste resources and revenue,” said Olivia Griot, Senior Associate, Synapse Energy Economics. “Synapse synthesized a variety of sources, including U.S. Energy Information Administration data, U.S. Greenhouse Gas Reporting Program data and satellite data to conduct a robust analysis that shows the economic value of reducing methane emissions. We found that natural gas operations on federal and tribal lands in 2019 corresponded to millions of dollars in wasted gas, as well as millions of dollars in wasted potential revenue to federal, state and tribal governments in the form of royalties and taxes.”
The 163 billion cubic feet of lost methane on public lands represents enough wasted natural gas to meet the needs of 2.2 million households – nearly as many households as New Mexico, North Dakota, Utah and Wyoming combined. Reducing this needless resource waste is important for reinforcing the energy security of the U.S. and its allies, while also helping protect air quality and safeguard the climate.
Multiple analyses have shown that reducing methane waste is a critical solution for supporting both energy and climate security. A recent S&P report found that it’s currently economical across 6 key global oil and gas producing regions – including North America — to capture and commercialize 70% of lost methane and flared gas. Additionally, EDF analysis revealed that reducing waste of natural gas from leaks and flaring in the U.S. could provide over half of the 50 BCM/yr of natural gas the Biden administration has pledged to European allies.
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One of the world’s leading international nonprofit organizations, Environmental Defense Fund (edf.org) creates transformational solutions to the most serious environmental problems. To do so, EDF links science, economics, law, and innovative private-sector partnerships. With more than 3 million members and offices in the United States, China, Mexico, Indonesia and the European Union, EDF’s scientists, economists, attorneys and policy experts are working in 28 countries to turn our solutions into action. Connect with us on Twitter @EnvDefenseFund
Taxpayers for Common Sense is a nonpartisan budget watchdog and an independent voice for the American taxpayer since 1995. Our mission is to fight for a federal government that operates within its means and works for people, not just special interests. We focus our efforts on eliminating wasteful and harmful programs and policies, weapons systems that do not work, and the perverse incentives that increase taxpayer risks and liabilities.