What Are The Implications Of The National Park Services Tightening Oil And Gas Regulations? #nps #regulation

By 24th November 2015 Industry News No Comments

Recently, the National Park Service (NPS) has made an attempt to tighten oil and gas regulations on operations that occur on national park land. According to an October 2015 article provided by Natural Gas Intelligence, the NPS “is proposing an end to regulatory provisions that exempt 60 percent of oil and gas operations on national park land from oversight by the agency.” Furthermore the NPS hopes to modify other regulations in an effort to “provide greater clarity and certainty to industry,” enhance its ability to safeguard park resources, and ensure visitors aren’t harmed by any adverse effects.

These attempts by the NPS would likely have benefits for park visitors who would be protected from oil and gas operations in the location. But would these tightened regulations also have greater (and potentially negative) implications for the oil and gas industry as a whole?

NPS Proposal

The potential guidelines set forth by the NPS were offered in a proposed rule published in the Federal Register in late October. Specifically, the proposed rule includes the following updated regulations, among others:

Eliminatory of the provisions that exempt 60 percent of oil and gas
operations on park land, as mentioned above
Elimination of the cap on financial assurance
Addition of a well-plugging provision
Incorporation of fees for new access beyond that held as a part of
the operator’s mineral right

Currently, these are simply proposals made by the NPS, with a public comment period remaining open until December 28th of this year.

What Does This Mean for the Oil and Gas Industry?

Ultimately, these proposed regulations, should they go into effect, could have far-reaching effects on multiple operations in national park land, of which there are currently 534, according to an October 2015 article in High Country News. Businesses with operations on national park space would be forced to adhere to the regulations set forth by the NPS, which are stricter than before, and will include penalties for minor infractions committed by the oil and gas operators. In turn, while it is now only possible to speculate, this could cause some oil and gas companies to abort operations in national park land for fear of being in violation of the rules.

In effect, the proposed NPS rules would likely result in a decrease in oil and gas operations on national park land overall; while some will argue that this may provide benefits for visitors, this could have significantly negative financial ramifications for many businesses who would choose to abandon their wells. As of now, oil and gas companies must simply wait until the end of the year to discover whether or not these suggestions will become enforceable rules.