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US oil sector seeks flaring rule delay

17 May 2017, 9.03 pm GMT

US oil sector seeks flaring rule delay

Washington, 17 May (Argus) — Industry trade group the American Petroleum Institute (API) is asking the new US administration to grant oil and natural gas companies an extra two years to comply with federal regulations designed to limit flaring and gas leaks on public lands.

API president Jack Gerard says such a delay would be appropriate in light of President Donald Trump's "energy independence" executive order, which requires the US Interior Department to consider revising or withdrawing the regulations. Gerard said it is "critical" to delay the rule to relieve the oil and gas industry from a regulation that may change.

"Swift action from your department is needed to provide certainty for operators of federal oil and gas leases subject to its terms," he wrote yesterday in a letter that asks US interior secretary Ryan Zinke to quickly publish a proposal delaying the rule.

The oil and gas sector had expected the US Senate would vote to permanently scrap the flaring regulations, using fast-track procedures under a law called the Congressional Review Act. But unexpected Republican opposition caused that effort to fail, leaving the regulations and their compliance timelines intact.

The regulations, which were issued last year under former president Barack Obama, require oil and gas lessees on federal land to complete their first detection operation for natural gas leaks by 17 January 2018. That same month, operators are supposed to start reducing flaring by capturing otherwise flared gas or slowing production. Interior last week said it will "suspend, revise or rescind" the rules because of the burden it would place on industry.

Gerard, in his letter, said operators will need to start complying with the regulations unless Interior takes action soon to propose a delay. Oil industry groups have sued to block the regulations in court, but US district court judge Scott Skavdahl in January declined to grant a preliminary injunction halting the regulations from taking effect.

Interior did not respond for comment.

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