OREANDA-NEWS. The US Interior Department is not consistently enforcing its royalty policy for natural gas flared on federal lands, auditors said.

Interior's Bureau of Land Management (BLM) is supposed to charge royalties on wasted gas that could have otherwise been sold, unless operators provide documentation justifying their need to vent or flare. But the US Government Accountability Office (GAO) found in a new report the agency is routinely waiving royalties, even when most flaring and venting requests do not include the required documentation.

BLM in fiscal 2014 received 1,281 requests to vent or flare, an action oil producers take when they lack easy access to natural gas pipeline capacity. GAO took a random sample of those requests and found 90pc did not provide sufficient documentation. BLM approved 70pc of the sampled requests and allowed royalty-free venting and flaring for nearly 50pc of the requests, GAO said in a report published yesterday.

The report is the latest to find inconsistencies in Interior's management of fossil fuels on federal lands. BLM in response to these critiques proposed rules earlier this year that would prohibit venting in most cases and adopt tighter limits on flaring. The rule would also allow BLM to increase its national 12.5pc royalty rate on producers that are flaring off large amounts of natural gas. Oil industry groups have criticized the regulation.

The GAO report also found BLM's policies on venting and flaring are inconsistently enforced in different states. Some field offices have started to charge royalties on flared natural gas, such as one in New Mexico that collected $4.4mn in fiscal year 2014. The report found many other field offices approve long-term flaring requests without charging any royalties. The GAO report said BLM's new rules could improve consistency in royalty policies.газ