The Bureau of Land Management (BLM) held a hearing in May to discuss the growing issue of “flaring” and “venting,” two mainstream industry practices designed to prevent dangerous build-ups of natural gas at drilling sites. Venting and flaring practices have recently entered the public consciousness after an industry report from nonprofit organizations the Western Values Project indicated that an estimated 50 million dollars in royalties and taxes were lost in 2013 from gas flaring and the burning of large amount of natural gases. Despite an increased shift towards natural gas use, the volume of unutilized natural gas has risen dramatically. Previous EPA findings suggested that burning excess natural gas has been deemed less environmentally harmful than venting ethanol and other elements directly into the atmosphere, and has therefore been a preferred method of disposal for many producers. The EPA New Source Performance Standards require increased action to increase natural gas capturing and minimize venting and flaring practices across the country.
Thus far, collection of the gases has not been widely favored in the industry. Low natural gas prices have provided little incentive for oil producers to implement infrastructure and technology that would easily and effectively harvest and store the naturally occurring byproducts of drilling. The BLM indicated at the hearing that “current regulations do not reflect the best management practice” and they hope to create regulations and agreements that will ensure better control of natural resources and fuels sources. Furthermore, regulatory crackdowns are expected to curb unauthorized flaring practices of potentially usable natural gasses which could increase penalties for fuel producers caught participating in wasteful practices.
The fuel industry is heavily subject to changing regulations and requirements which often alter established business practices. Keeping up with the latest federal regulations is essential to a Connecticut fuel producer’s risk management strategies. At Sinclair Risk and Financial Management our specialists are experts in assessing the needs of our Fuel Industry clients. We understand that a typical Connecticut Business Insurance is not enough to cover the unique risk exposures that oil dealers face. Our Connecticut Fuel Insurance programs are designed to fully protect your assets and reduce losses. Call us today at (877) 602-2305 for more information about any of our products.