The Bureau of Land Management (BLM) issued a final rule (the 2018 rule) on September 28, 2018 (83 FR 49184) that revised, rescinded, or replaced requirements in its “Waste Prevention, Production Subject to Royalties, and Resource Conservation” (the 2016 rule) (81 FR 83008). The 2016 rule, also known as the Methane and Waste Prevention Rule, required operators of onshore federal and Indian (other than Osage Tribe) leases to take various actions to reduce the waste of gas. The rule established clear criteria for when flared gas qualified as waste and was, therefore, subject to royalties, and also clarified which on-site uses of gas were exempt from these royalties. Prior to the 2016 rule, provisions related to venting, flaring, and royalty-free use of gas were contained in the agency’s 1979 Notice to Lessees and Operators of Onshore Federal and Indian Oil and Gas Leases, Royalty or Compensation for Oil and Gas Lost [NTL–4A]).
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