Trio of bills would reduce wasteful natural gas flaring, incentivize oil and gas co’s to produce on the drilling leases they already own, and study the impacts on ratepayers of energy auctions

Washington (May 11, 2015) – As the Senate begins the process of developing an energy bill, Senator Edward J. Markey (D-Mass.) today introduced three pieces of legislation to protect consumers from wasteful energy practices and rising energy prices.

The first piece of legislation, the FLARE (Fuel Loss Abatement and Royalty Enhancement) Act, is targeted at the wasteful practice of excessively burning or venting natural gas emanating from wells drilled for crude oil. The practice is becoming increasingly prevalent on federal lands and is costing taxpayers millions of dollars. The FLARE Act requires the Secretary of the Interior to issue regulations to prevent or minimize the flaring of natural gas on public land both onshore and offshore to conserve this resource that oil companies are currently treating as waste.

“Oil and gas companies are wasting energy resources that could be used to power American homes and businesses,”said Senator Markey, who first introduced the FLARE Act in the House of Representatives. “The oil and gas industry should take a ‘waste not, want not’ approach to America’s energy production, and taxpayers should be compensated for the loss of this valuable natural resource on public lands. The FLARE Act would ensure that the federal government requires the oil and gas industry to dramatically cut down on this wasteful practice, which is costing taxpayers and worsening climate change.”

The FLARE Act would also require oil companies to pay royalties to the American people on vented or flared natural gas on public lands. Finally, the FLARE Act would require the Government Accountability Office (GAO) to report to Congress on how much natural gas is being vented or flared.

As reported by the Associated Press, according to the GAO investigation, in 2010 the federal government was losing at least $23 million annually in lost sales. The GAO found that capturing the gas being vented, much of which is methane, would be equivalent to removing 3.1 million cars from the road or closing four average-sized coal-fired power plants.

A copy of the FLARE Act can be found HERE. 

The second piece of legislation, the USE IT (United States Exploration on Idle Tracts) Act, would provide an incentive to oil and gas companies to produce on the drilling leases they already own on public lands, instead of continuing the practice of warehousing these leases without producing. After then-Rep. Markey introduced similar legislation in the House of Representatives, the Obama administration began proposing such a legislative change in its budget requests for the Department of the Interior. Onshore, oil companies hold nearly 22 million acres of leases on federal land on which they are not producing oil, an area larger than South Carolina.

“We shouldn’t even contemplate opening the Atlantic coast to drilling when oil companies are currently warehousing 24 million acres of offshore leases they already hold in the Gulf,” continued Senator Markey. “That’s an area nearly the size of Kentucky that they already have under lease and on which they are not producing oil. They should drill on these leases first before pushing to threaten Massachusetts’ tourism and fishing industries and environment by opening the East Coast to drilling.” 

A copy of USE IT Act can be found HERE.

The third piece of legislation, co-sponsored by Senator Elizabeth Warren (D-Mass.), directs the U.S. Comptroller General to conduct a study on the effects of forward capacity auctions and other capacity mechanisms on electricity prices and supply and competition in these markets. Senator Markey and Rep. Joe Kennedy III (D-Mass.) have recently expressed concerns to the Federal Energy Regulatory Commission (FERC) about shortcomings in the auction process and its impact on ratepayers.

A copy of the legislation to study forward capacity auctions can be found HERE.

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