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April 15, 2016 05:30 AM UTC

Tax Day, Tipton, and the Tired Rhetoric of an Entitled Industry

  • 7 Comments
  • by: PKolbenschlag

(Promoted by Colorado Pols)

Two things come with certainty we are told, and one of those comes with an annual deadline: Tax Day.  And without getting into the many issues of public spending, and tax policy, and philosophies of government–there is still a thread that connects them all: fairness. Who pays what for public resources, public benefit, public good.

“Only little people pay taxes.” Leona Helmsley ~ This year Tax Day is April 18.

So here is something to think about as you dig around for that last receipt hoping to save another $50 on your 1040.

Last year alone oil and gas companies, already profiting off developing resources from public lands, wasted enough methane gas that it could have put another $50 million or more into the U.S. Treasury, according to a report prepared by the Western Values Project.

That’s money that American taxpayers have to make up, even though the resources being wasted already belong to us.

So not only are we robbed of the royalty that gets vented and flared along with the gas, we lose a valuable energy resource too. The Durango Herald (covering a public  hearing held in nearby Farmington, New Mexico) reports:

“Oil and gas companies operating on federal and tribal lands are now wasting more than $330 million worth of natural gas nationwide,” Salazar said. “And in New Mexico, that’s $100 million a year, each year, through the wasteful practice of venting, flaring and leaking. In fact, New Mexico is No. 1 in the country for the amount of natural gas being lost.”

Oil and gas executives think paying Americans for the waste of their public resources could be “crippling.”

Which brings us to another thing to consider this Tax Day. The Bureau of Land Management, which administers most of the public’s onshore minerals, is finalizing an updated rule to stop this disregard shown by oil and gas companies for our energy resources and for the American taxpayer.

Under the proposed new rule more money could be returned to the U.S. Treasury, less of America’s energy resources would be wasted needlessly, and methane emissions would be cut significantly, the Herald reports.

BLM officials estimated the tougher regulations would reduce methane emissions – a gas 25 times more potent than carbon dioxide – about 169,000 tons per year, and decrease volatile organic compound releases by 410,000 tons per year.

“The announcement … is consistent with the Obama Administration’s goal to cut methane emissions from the oil and gas sector by 40 to 45 percent from 2012 levels by 2015,” the Department of Interior said in a Jan. 22 statement.

The BLM rulemaking is a necessary and prudent update to regulations that predate the shale boom and the widespread deployment of fracking and horizontal drilling, practices that can release large amounts of methane.

Another article in the Herald notes that much of the technology to address the issue already exists.

The BLM’s current rule regarding venting and flaring of methane and other gases was adopted more than 30 years ago. A 2010 report from the U.S. Government Accountability Office, cited by the Department of the Interior, found that almost 40 percent of natural gas vented, flared and leaked through oil and gas production on federal and tribal lands could be “economically captured with currently available technologies.”

Flaring of methane is often a regular occurrence in oil and gas operations, including in western Colorado.

We know oil and gas companies can meet the requirements because Colorado has already enacted rules to limit methane leaks. Indeed, in Colorado industry PR touts the state methane rules as if they were their own idea all along.

And as Gov. Hickenlooper, no opponent of oil and gas development, noted: limiting methane leaks and wastage is not only sound from a stewardship perspective–in terms of the resource and fiduciary obligation to taxpayer–but good for the environment and for public health as well.

In Colorado, regulations reducing methane and natural gas emissions from industrial drilling were passed several years ago. “Two years ago, Colorado passed some of the most robust emissions requirements across the country for oil and gas operations, including the nation’s first methane regulations,” Gov. John Hickenlooper said in a statement regarding the BLM’s proposed rule. “We’re pleased to see that elements of the BLM’s proposed regulations on flaring, venting and leak prevention are modeled from Colorado’s rules, and will minimize the waste of natural gas while reducing harmful emissions.”

For Colorado, the need for the new federal rule, in terms of lessening climate, environmental, and health impacts; and for its broader reach across state lines, could not be more obvious.

Consider the Four Corners region, hometurf to western Colorado’s congressman Scott Tipton. Although the methane cloud hangs over all the region, much of that pollution comes from oil and gas operations in New Mexico where Colorado’s methane rules do not apply. Clearly, a federal rule would directly benefit Mr. Tipton’s constituents and the State of Colorado.

From the Herald article on the Farmington hearing:

Supporters of the proposed rules maintained that cracking down on methane leaks will not only save the state and federal government revenue from lost resources, the plan’s implementation will protect the environment.

“We have the reddest spot on the map in terms of having methane emissions in the United States,” said La Plata County Commissioner Gwen Lachelt. “This is a step in the right direction.”

In 2014, satellite images captured a massive “hot spot” of methane over the Four Corners, which is the second largest producer of natural gas in the U.S. Several studies are underway.

The nation’s largest “plume” of methane sits atop the San Juan Basin drilling zone, which includes one of the more populated parts of Colorado’s Third Congressional District.

 

The oil and gas industry has shown that it can comply with regulations to address methane leaks and to limit flaring, but it is nonetheless bemoaning the new rules being proposed by the BLM.

As predictable as an ozone haze obscures a sunny afternoon, comes the cliche reply. From an entitled sounding industry that reflexively threatens calamity anytime any others want to protect their own interests or fulfill other statutory obligations. From the Cortez Journal

The Independent Petroleum Association of America’s vice president Dan Naatz said with oil and natural gas prices dropping, new fees and regulations could cripple energy companies.

The notion is preposterous: that industry will be “crippled” if it has to clean up its act with technology that exists and is deployed successfully already in many places. Yet it still finds root in the minds of the gullible. At least among some Members of Congress.

A handful of oil and gas extremists among the House GOP have issued a letter urging that the BLM be prohibited from implementing any new methane rules. The letter was originated by Rep. Kevin Cramer (R-ND) who said in an E&E News article that:

“These regulations have nothing to do with protecting the environment and everything to do with shutting down the oil and gas industry.  …The BLM and other federal agencies can do more by approving rights-of-way for additional pipelines in a timely manner.”

The IRS is ready to collect your money. For now the U.S. Treasury cannot collect on the millions of dollars of public resources being wasted from oil and gas operations on public lands. Rep. Tipton wants to keep it that way.

Rep. Scott Tipton is among those joining the letter although his district surely stands to gain from an updated rule.

Consider Cortez, the congressman’s hometown. Not only is it located under the nation’s largest methane “hotspot” but is in one of Colorado’s poorest counties as well. Cortez is a place that would benefit from the healthier air quality the rule would help bring about, and from a fairer return that would come from better, updated, rules and stewardship for the public’s resources.

So as you hurry to get your tax filing in, consider this thread of fairness: Who pays what for public resources, public benefit, public good. Consider what benefit accrues to the public interest in letting oil and gas companies waste millions in public resources, and how that can amount to any public good.

Remember your return needs to be postmarked by midnight of April 18, 2016 to be timely filed. Then remember to submit a comment to the BLM by April 22 in support of the methane rule. Send a copy of your comment with a note to your Member of Congress too–who after all is also living off tax largess.

Comments

7 thoughts on “Tax Day, Tipton, and the Tired Rhetoric of an Entitled Industry

  1. Another excellent piece, PK.

     

     everything to do with shutting down the oil and gas industry. –  

    I would like to finish the above sentence….'because we simply cannot do this unless we are allowed to pollute at will".

    The mendacity that is a foundation of oil and gas industry policy is remarkable. Just yesterday I heard David Ludlam of COGA try to spin the Marathon Oil Co. sale of assets in the Piceance basin as a sign of increased activity there. He failed to mention that natgas futures on the NYMEX in May are at $1.92 / MCF. 

    I expect the new operator there to start moving much of that production into "stripper well" status to avoid paying any severance taxes. 

     

    1. Heard on Rachel Maddow it’s because Lincoln issued a proclamation freeing DC slaves on the date and the fed is shut down. Which made no sense to me because why wouldn’t that be the case every April 15th. Must have missed something.

      1. The date of the holiday is April 16th.  If that falls on a weekend, it's observed on the nearest weekday (Sat. -> Fri.; Sun. -> Mon.)

        Next year, tax day will fall on Tuesday, the 18th (15th on Saturday > next business day is Monday > oops, that’s Emancipation Day observed > Tuesday)

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