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Former U.S. President Barack Obama gestures as he talks during the Global Food Innovation Summit in Milan, Italy May 9, 2017. REUTERS/Alessandro Garofalo

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By Valerie Volcovici

WASHINGTON (Reuters) - In a blow to administration efforts to free the oil and gas industry from Obama-era environmental rules, a Senate resolution to revoke a rule to limit leaks and flaring of methane from oil and gas production on federal lands fell short of votes 49-51 on Wednesday.

The surprise vote outcome came after Republican leaders scrambled for weeks to secure the 51 votes necessary to pass the Congressional Review Act resolution, which would revoke the rule and prevent any similar regulations from being introduced.

Getting the Trump administration to repeal the Interior Department's Bureau of Land Management methane rule had been a top priority of the oil and gas industry, but not all Republicans supported the measure because it would make it difficult to regulate methane waste in the future.

Republican Senator John McCain of Arizona made a surprise vote against the resolution, joining fellow Republicans Lindsey Graham of South Carolina and Susan Collins of Maine in opposition.

The rule, finalised by President Barack Obama in his last weeks in office, updated 30-year-old regulations that govern flaring, venting and natural gas leaks from oil and gas production. His administration said the rule could avoid wasting up to 41 billion cubic feet (BCF) of natural gas per year.

Industry groups such as the American Petroleum Institute had argued that the rule was unnecessary because companies have made strides in reducing methane leaks from their operations.

“The rule could impede U.S. energy production while reducing local and federal revenues," said API Upstream and Industry Operations Group Director Erik Milito.

Members of the Western Energy Alliance, which include Devon Energy , Whiting Petroleum and EOG Resources had been strongly opposed to the BLM rule.

Environmental groups were taken surprise by the vote, but claimed a rare victory for the environment after a barrage of regulatory rollbacks by the Trump administration.

“In recent months, thousands of Americans asked the Senate to stand up for clean air and against the oil lobby, and their efforts were successful today," said Jamie Williams, president of the Wilderness Society.

The Western Values Project estimated that taxpayers would have lost out on $800 million in lost potential royalties from leaked or vented natural gas over the next decade if the rule had been rescinded.

(Reporting By Valerie Volcovici; Editing by Alistair Bell)

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