Opinion Editorial: Methane rule good for environment, consumers

2/22/2017
Tom Singer, WELC Senior Policy Advisor

The oil and gas industry often reminds us that the New Mexico economy depends on a strong oil and gas industry, and that’s not wrong. New Mexico gets about a third of its state income from oil and gas. But any stockbroker will tell you that an undiversified portfolio comes with significant risk. As we are experiencing now, periodic crashes in fossil fuel prices affect the whole state; cuts for education, senior services – Gov. Martinez is now ordering agencies to cut budgets by 5 percent across the board. One way to help us weather the current downturn is to make sure that oil and gas companies pay royalties on all of the natural gas they produce on public lands. The Bureau of Land Management’s new rule to minimize methane waste from venting, flaring and leaks will do just that.

Every year, oil and gas operations in New Mexico waste about $100 million worth of natural gas, resulting in $6 million in lost state royalties. This waste has led to a Delaware-sized cloud of the gas looming over the Four Corners region and an “F” grade from the American Lung Association for ozone pollution in San Juan County in 2016.

The U.S. Senate will vote as soon as this week on a resolution that would undo the BLM methane rule. Senators supporting the resolution, at the bidding of the oil and gas industry, are taking advantage of procedural loopholes to force a quick vote with little debate. New Mexico Sens. Tom Udall and Martin Heinrich, both Democrats, lead a large group of New Mexico officials in opposing this industry-led attempt to void the rule, which would result in continued waste, forgone royalties for taxpayers and widespread pollution.

The BLM rule comes with minimal costs to operators. In fact, they will be able to make money selling saved gas. Economists found that, for 90 percent of the 13,493 active federal gas wells studied in the San Juan Basin, the part of the rule requiring leak detection and repair would increase income. Only the bottom 10 percent (the most marginal wells producing less than 15,000 cubic feet of methane per day) would incur a modest net cost – about a thousand bucks per year. Additionally, retrofitting operations with more efficient equipment, and finding and fixing leaks provides great potential for job growth in our state.

And the BLM methane waste rule is popular, too. A recent Colorado College poll found that 73 percent of New Mexicans and 81 percent of Westerners support the idea. Similar rules in Colorado have proven successful, with seven of 10 producers in one survey saying benefits outweigh the costs. The BLM crafted its rule carefully to fill in gaps and not duplicate the few state rules that do exist.

Even Gov. Susana Martinez has recognized the importance of curbing methane waste, ordering the New Mexico Oil Conservation Division to take steps with the “ultimate goal to reduce natural gas emissions,” which include requiring oil and gas operators to report the amounts of gas they vent (emit directly to the atmosphere unused) and flare (burn off unused) and to submit gas capture plans in new drilling applications. It’s surprising and disappointing that the governor is supporting efforts to kill a rule that would advance her own policy to prevent methane waste.

The persistent New Mexico methane hot spot is strong evidence that the industry has no plans to clean up its act unless this rule stays on the books. Today, New Mexicans near oil and gas development are breathing dirty air and the state is watching royalties blow away in the wind. But we have a tool to help us stop wasting a valuable public resource – to the benefit of New Mexicans’ health, our state’s economic stability, the climate and more. New Mexicans support the BLM methane rule. Let’s keep it.

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