I 

114TH CONGRESS 

1ST SESSION H. R. 3289 

To prevent the waste of gas produced under oil and gas leases on Federal 

land and to collect royalty on all gas production. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 29, 2015 

Mr. LOWENTHAL (for himself, Mr. GRIJALVA, Ms. NORTON, Mr. GALLEGO, 

Mr. BEYER, Mr. POCAN, Mr. POLIS, Mr. CARTWRIGHT, Mr. TONKO, Ms. 

CASTOR of Florida, Mr. HONDA, Mr. VAN HOLLEN, and Ms. MCCOLLUM) 

introduced the following bill; which was referred to the Committee on 

Natural Resources 

A BILL 

To prevent the waste of gas produced under oil and gas 

leases on Federal land and to collect royalty on all gas 

production. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Natural Gas Environ5 mental and Economic Security Act’’. 


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1 SEC. 2. GAS WASTE REDUCTION AND ENHANCEMENT OF 

2 GAS MEASURING AND REPORTING. 

3 (a) IN GENERAL.—Title I of the Federal Oil and Gas 

4 Royalty Management Act of 1982 (30 U.S.C. 1711 et 

5 seq.) is amended by adding at the end the following: 

6 ‘‘SEC. 118. GAS WASTE REDUCTION AND ENHANCEMENT OF 

7 GAS MEASURING AND REPORTING. 

8 ‘‘(a) RULES FOR PREVENTING AND REDUCING

9 WASTE OF GAS VIA VENTING, FLARING, AND FUGITIVE

10 RELEASES.— 

11 ‘‘(1) REQUIREMENT TO ISSUE RULES.—The 

12 Secretary shall issue rules that establish require13 ments for reducing and preventing the waste of gas, 

14 including by venting, flaring, and fugitive releases, 

15 from covered operations. 

16 ‘‘(2) CONTENT OF RULES.—The rules shall— 

17 ‘‘(A) require that 99 percent of all gas pro18 duced that is subject to a mineral leasing law 

19 be captured annually within 5 years of enact20 ment of the Natural Gas Environmental and 

21 Economic Security Act; 

22 ‘‘(B) require flaring of gas, rather than 

23 venting, in all instances in which gas capture is 

24 not viable; 

25 ‘‘(C) require that every application for a 

26 permit to drill a production well— 


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1 ‘‘(i) demonstrate sufficient infrastruc2 ture is in place to capture produced gas; 

3 and 

4 ‘‘(ii) be subject to public comments 

5 for a period of 30 days; 

6 ‘‘(D) prohibit all new wells from flaring, 

7 within 2 years after the date of the enactment 

8 of the Natural Gas Environmental and Eco9 nomic Security Act; 

10 ‘‘(E) require the operator of any covered 

11 operation that routinely flares gas before the ef12 fective date of the prohibition under subpara13 graph (D) to submit a gas capture plan to the 

14 Secretary no later than 6 months after such ef15 fective date that ensures the requirement in 

16 subparagraph (A) will be met; 

17 ‘‘(F) require the operator of any covered 

18 operation that routinely flares gas before the ef19 fective date of the prohibition under subpara20 graph (D) to demonstrate a yearly decrease in 

21 the amount of gas flared, as a fraction of gas 

22 produced, to meet the requirement under sub23 paragraph (A); 


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1 ‘‘(G) set performance standards based on 

2 modern equipment, to be updated every 5 years, 

3 that minimize gas loss from— 

4 ‘‘(i) storage tanks; 

5 ‘‘(ii) dehydrators; 

6 ‘‘(iii) compressors; 

7 ‘‘(iv) open-ended valves or lines; 

8 ‘‘(v) pumps; and 

9 ‘‘(vi) other equipment for which the 

10 Secretary considers such standards are 

11 necessary; 

12 ‘‘(H) require the replacement of all high13 bleed gas-actuated pneumatic devices with low14 bleed or no-bleed devices; 

15 ‘‘(I) set performance standards based on 

16 modern procedures and equipment, to be up17 dated every 5 years, that minimize gas loss 

18 from— 

19 ‘‘(i) downhole maintenance; 

20 ‘‘(ii) liquids unloading; 

21 ‘‘(iii) well completion; and 

22 ‘‘(iv) other procedures for which the 

23 Secretary considers such standards are 

24 necessary; 


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1 ‘‘(J) require all operators to have regularly 

2 scheduled leak detection programs that assess 

3 the entire covered operation using an infrared 

4 camera or other equipment with equivalent sen5 sitivity and the ability to survey similarly large 

6 areas; 

7 ‘‘(K) require any leaks found during leak 

8 detection programs required under subpara9 graph (J), or otherwise, to be repaired within 2 

10 weeks; and 

11 ‘‘(L) require recordkeeping for— 

12 ‘‘(i) equipment maintenance; 

13 ‘‘(ii) leak detection and repair; 

14 ‘‘(iii) venting events; 

15 ‘‘(iv) flaring events; and 

16 ‘‘(v) other operations for which the 

17 Secretary considers such requirements are 

18 necessary. 

19 ‘‘(b) GAS MEASURING, REPORTING, AND TRANS20 PARENCY REQUIREMENTS.— 

21 ‘‘(1) IN GENERAL.—The Secretary shall, in ac22 cordance with this subsection, establish new require23 ments for measuring and reporting the production 

24 and disposition of all gas subject to the mineral leas25 ing laws to allow for more accurate accounting of all 


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1 such gas that is consumed or lost by venting and 

2 flaring, and of fugitive releases of such gas. 

3 ‘‘(2) MEASURING AND REPORTING REQUIRE4 MENTS.—To account for all gas referred to in para5 graph (1), the Secretary shall issue rules requiring 

6 oil or gas operators to— 

7 ‘‘(A) measure all production and disposi8 tion of gas with such accuracy that fugitive gas 

9 releases can be calculated; 

10 ‘‘(B) install metering devices to measure 

11 all vented and flared gas; and 

12 ‘‘(C) report to the Secretary the volumes of 

13 gas measured under the requirements under 

14 subparagraph (A), including— 

15 ‘‘(i) all new measured values for pro16 duction and disposition, including vented 

17 and flared volumes; and 

18 ‘‘(ii) fugitive releases based on guide19 lines for their calculation established by 

20 the Secretary in the rule. 

21 ‘‘(3) TRANSPARENCY.—The Secretary shall 

22 make all new data produced under the requirements 

23 established by the Secretary under this subsection, 

24 including calculated fugitive releases and volumes of 


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1 gas lost to venting and flaring, publicly available 

2 through the Internet— 

3 ‘‘(A) without a fee or other access charge; 

4 ‘‘(B) in a searchable, sortable, and 

5 downloadable manner, to the extent technically 

6 possible; and 

7 ‘‘(C) as soon as technically practicable 

8 after the report by the operator is filed. 

9 ‘‘(c) APPLICATION.—Except as otherwise specified in 

10 this section, the requirements established by the Secretary 

11 under this section shall apply to— 

12 ‘‘(1) the construction and operation of any cov13 ered operation initiated after the date of the 

14 issuance of rules under this section; and 

15 ‘‘(2) after the end of the 1-year period begin16 ning on the date of the issuance of such rules, any 

17 covered operation initiated before the date of the 

18 issuance of such rules. 

19 ‘‘(d) ENFORCEMENT MECHANISMS.— 

20 ‘‘(1) IN GENERAL.—The Secretary shall include 

21 in the rules issued under this section consistent en22 forcement mechanisms for covered operations that 

23 are not in compliance with the requirements estab24 lished by the rules. 


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1 ‘‘(2) REQUIREMENTS.—The enforcement mech2 anisms under paragraph (1) shall include— 

3 ‘‘(A) civil penalties for unauthorized vent4 ing and flaring, which shall— 

5 ‘‘(i) apply in lieu of the penalties 

6 under section 109; and 

7 ‘‘(ii) include production restrictions 

8 and civil monetary penalties equivalent to 

9 3 times the market value of the vented or 

10 flared gas; and 

11 ‘‘(B) civil penalties that apply to non12 compliance with other new or existing proce13 dures, which shall— 

14 ‘‘(i) apply in addition to or in lieu of 

15 the penalties under section 109; 

16 ‘‘(ii) include production restrictions or 

17 monetary penalties, or both; and 

18 ‘‘(iii) in the case of monetary pen19 alties, be proportional to market condi20 tions. 

21 ‘‘(e) DEFINITIONS.—In this section: 

22 ‘‘(1) COVERED OPERATIONS.—The term ‘cov23 ered operations’ means all oil and gas operations 

24 that are subject to mineral leasing law or title V of 

25 the Federal Land Policy and Management Act of 


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1 1976 (30 U.S.C. 1761 et seq.), regardless of size, in2 cluding production, storage, gathering, processing, 

3 and handling operations. 

4 ‘‘(2) FLARE AND FLARING.—The term ‘flaring’ 

5 means the intentional and controlled burning of gas 

6 that occurs in the course of oil and gas operations 

7 to limit release of gas to the atmosphere. 

8 ‘‘(3) FUGITIVE RELEASE.—The term ‘fugitive 

9 release’ means the unintentional and uncontrolled 

10 release of gas into the atmosphere in the course of 

11 oil and gas operations. 

12 ‘‘(4) GAS CAPTURE PLAN.—The term ‘gas cap13 ture plan’ means a plan that includes specific goals, 

14 including equipment and timelines, for capturing, 

15 gathering, and processing gas produced under an oil 

16 or gas lease. 

17 ‘‘(5) GAS RELEASE.—The term ‘gas release’ in18 cludes all gas that is discharged to the atmosphere 

19 via venting or fugitive release. 

20 ‘‘(6) VENT AND VENTING.—The term ‘venting’ 

21 means the intentional and controlled release of gas 

22 into the atmosphere in the course of oil and gas op23 erations.’’. 


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1 (b) CLERICAL AMENDMENT.—The table of contents 

2 in section 1 of that Act is amended by adding at the end 

3 of the items relating to title I the following: 

‘‘Sec. 118. Gas waste reduction and enhancement of gas measuring and reporting.’’. 

4 (c) DEADLINE.—The Secretary of the Interior shall 

5 issue rules required by the amendments made by this sec6 tion by not later than 1 year after the date of the enact7 ment of this Act. 

8 (d) ASSESSMENT OF VENTING, FLARING, AND FUGI9 TIVE RELEASES.—Not later than 6 months after the end 

10 of the 1-year period beginning on the date the Secretary 

11 of the Interior first receives data submitted under the re12 quirements established under subsection (b) of section 118 

13 of the Federal Oil and Gas Royalty Management Act of 

14 1982, as amended by this section, the Secretary shall— 

15 (1) submit a report to Congress describing— 

16 (A) the volume of fugitive releases, and gas 

17 consumed or lost by venting and flaring, from 

18 covered operations (as those terms are used in 

19 such section); 

20 (B) additional rules the Secretary con21 siders necessary to further curtail venting, flar22 ing, and fugitive releases, or the rational basis 

23 for not issuing new rules if the Secretary con24 siders new rules are not necessary; and 


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1 (C) recommendations for new statutory au2 thority necessary to limit venting, flaring, or fu3 gitive releases; and 

4 (2) issue rules described in the report under 

5 paragraph (1)(B) within 1 year after the date of the 

6 submission of the report. 

7 SEC. 3. ROYALTY COLLECTION FOR ALL GAS PRODUCED 

8 ON FEDERAL LANDS. 

9 (a) ASSESSMENT ON ALL PRODUCTION.— 

10 (1) IN GENERAL.—Except as provided in para11 graph (2), royalties otherwise authorized or required 

12 under the mineral leasing laws (as that term is de13 fined in the Federal Oil and Gas Royalty Manage14 ment Act of 1982 (30 U.S.C. 1701 et seq.)) to be 

15 paid for gas shall be assessed on all gas produced 

16 under the mineral leasing laws, including— 

17 (A) gas used or consumed within the area 

18 of the lease tract for the benefit of the lease 

19 (commonly referred to as ‘‘beneficial use gas’’); 

20 and 

21 (B) all gas that is consumed or lost by 

22 venting, flaring, or fugitive releases through any 

23 equipment during upstream operations. 

24 (2) EXCEPTION.—Paragraph (1) shall not 

25 apply with respect to— 


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1 (A) gas vented or flared in an acute emer2 gency situation that poses danger to human 

3 health that occurs for no longer than 48 hours; 

4 and 

5 (B) gas injected into the ground on a lease 

6 tract in order to enhance production of an oil 

7 or gas well or for some other purpose. 

8 (b) CONFORMING AMENDMENTS.— 

9 (1) MINERAL LEASING ACT.—The Mineral 

10 Leasing Act is amended— 

11 (A) in section 14 (30 U.S.C. 223), by add12 ing at the end the following: ‘‘Notwithstanding 

13 any other provision of this Act (including this 

14 section), royalty shall be assessed with respect 

15 to oil and gas, other than gas described in sec16 tion 3(a)(2) of the Natural Gas Environmental 

17 and Economic Security Act, without regard to 

18 whether oil or gas is removed or sold from the 

19 leased land.’’; 

20 (B) in section 17 (30 U.S.C. 226), by 

21 striking ‘‘removed or sold’’ each place it ap22 pears; 

23 (C) in section 18 (30 U.S.C. 226), by 

24 striking ‘‘except oil or gas used for production 


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1 purposes on the claim, or unavoidably lost’’ 

2 each place it appears; 

3 (D) in section 19 (30 U.S.C. 226), by 

4 striking ‘‘except oil or gas used for production 

5 purposes on the claim, or unavoidably lost’’ 

6 each place it appears; 

7 (E) in section 22 (30 U.S.C. 251), by 

8 striking ‘‘sold or removed’’; and 

9 (F) in section 31 (30 U.S.C. 188), by 

10 striking ‘‘removed or sold’’ each place it ap11 pears. 

12 (2) OUTER CONTINENTAL SHELF LANDS ACT.— 

13 The Outer Continental Shelf Lands Act is amend14 ed— 

15 (A) in section 6(a)(8) (43 U.S.C. 

16 1335(a)(8)), by striking ‘‘saved, removed, or 

17 sold’’ each place it appears; and 

18 (B) in section 8(a) (43 U.S.C. 1337(a))— 

19 (i) in paragraph (1), by striking 

20 ‘‘saved, removed, or sold’’ each place it ap21 pears; and 

22 (ii) by adding at the end the fol23 lowing: 

24 ‘‘(9) Notwithstanding any other provision of 

25 this Act (including this section), royalty under this 


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1 Act shall be assessed with respect to oil and gas, 

2 other than gas described in section 3(a)(2) of the 

3 Natural Gas Environmental and Economic Security 

4 Act, without regard to whether oil or gas is removed 

5 or sold from the leased land.’’. 

6 (c) APPLICATION.—The amendments made by this 

7 section shall apply only with respect to leases issued on 

8 or after the date of the enactment of this Act. 

Æ 


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