Today, advocacy groups in New Mexico concerned about methane waste from the oil and gas industry released a set of core principles to guide the state as it begins its next step in developing a rule to prevent waste and safeguard taxpayers, public health, the climate, and the broader environment. These core principles outline the details necessary to draft a next-generation rule that will be the best in the nation and that will prevent a majority of the waste currently occurring in the state while also ensuring industry and taxpayers to benefit from the sale of captured gas.
The lead state agencies, the New Mexico Environment Department and the Energy, Minerals and Natural Resources Department, recently established a Methane Advisory Panel, gathering experts from industry and the NGO community to explore methods for preventing methane waste. The panel will hold its inaugural meeting this afternoon. The panel consists of 17 oil and gas executives and 10 advocates representing ranching, Native American, environmental, and public health and welfare groups. The panel will hold a series of meetings over the next two months to identify potential solutions to the state’s methane waste problem for the agencies to consider as it begins writing the rule.
The methane problem in New Mexico:
The oil and gas industry is the primary cause of the Delaware-sized methane hot spot above the Four Corners. Aging oil and gas infrastructure and industry business and operating practices result in the waste of an EDF-estimated 1 million metric tons of methane per year. This is the equivalent to the greenhouse gas emissions of almost 30 million cars or more than 20 coal fired power plants. OCD statistics show venting increased by 56 percent and flaring increased by 117 percent in 2018. Preliminary figures for 2019 indicate that venting and flaring is continuing to grow. Over 500,000 metric tons of methane were wasted in the New Mexico Permian in 2018, 4 percent of total gas production, just from venting and flaring of “associated gas” produced alongside oil but not sent to market.
New Mexicans lose more than $40 million each year in royalties that operators are not required to pay for oil or gas produced on federal or state lands when they vent, flare, or leak methane rather than sell it. New Mexicans also face grave threats from rising temperatures, declining snowpack, rising wildfire danger, and other impacts brought on by a changing climate—impacts to our natural and cultural heritage and our ability to support a thriving, durable economy for all. The oil and gas industry exacerbates these threats by wasting methane, a climate pollutant more than 80 times the potency of carbon dioxide in driving climate change. Further, the same practices that cause methane waste also release volatile organic compounds. These air pollutants contribute to ozone formation, which is “linked to a wide range of health effects, including aggravated asthma, increased emergency room visits and hospital admissions, and premature death.” Wasteful industry practices also release air toxics such as benzene, ethylbenzene, and n-hexane “suspected of causing cancer and other serious health effects.”
Summary of the core principles:
- Near-zero tolerance for methane waste. Industry has been venting, flaring and leaking methane as standard business practice for too long and the consequences for New Mexicans have grown too severe to allow business as usual to continue. The New Mexico constitution, state law, and the Governor’s Climate Executive Order provide ample authority for a rule that prevents the majority of this waste.
- A rule in effect in 2020. New Mexicans need a rule as soon as possible given the massive amount of methane that is being wasted at existing oil and gas operations and that will be wasted, absent swift action, due to the boom in new drilling in the New Mexico Permian. We need a rule that goes into effect next year.
- All Sources of Methane Waste Are Covered. In its Methane Mitigation Roadmap, the NM Oil and Gas Association targeted a few large sources of waste but ignored many others. The rule should reach broadly across all sources of waste from both industry equipment and their operations. In particular, the rule needs to address the venting and flaring of associated gas that was dodged by the NMOGA Roadmap but is among the most significant sources of waste.
- Incentives are In Place to Ensure Better Industry Planning and Investment. Methane must have a way to reach markets or it will simply be vented or flared. Yet companies in New Mexico produce massive amounts without the infrastructure to enable it to be sold. The rule should create incentives for upstream and midstream companies to do a better job planning and building marketing infrastructure so that there is enough take-away capacity ahead of time to accommodate production.
- Compliance and enforcement is straightforward. To provide clarity and certainty to both companies and regulators the rule should establish a system through which companies can reported information to support determinations about compliance, exemptions are limited, and the consequences for non-compliance are clear-cut.
- Transparency and accountability are supported. Recent polling indicates that public concern about methane waste is widespread and growing. To support transparency and accountability, information reported to the state about industry performance should be quickly and easily made available to the public.
- While the rule is being developed the state can take interim action to prevent waste. Under existing statutes and regulations companies already have a few obligations to prevent methane waste. For example, drilling permit applications are supposed to identify take-away capacity that will be available before new wells go into operation, but compliance has been spotty. The state could drive early action to prevent waste by reinvigorating enforcement of current rules.
The following organizations endorsed these core principles:
350.org New Mexico, CAVU, Center for Civic Policy, Conservation Voters New Mexico, Earthworks, New Mexico Environmental Law Center, New Mexico Horse Council, New Mexico Sportsmen, New Mexico Interfaith Power and Light, Rio Grande Chapter of the Sierra Club, Rio Grande Indivisible, Rocky Mountain Farmers Union, Santa Fe Green Chamber of Commerce, Don Schreiber, The Wilderness Society, Western Resource Advocates, Donna House, Western Leaders Network, Progress Now New Mexico, National Parks Conservation Association, San Juan Citizens Alliance, Diné CARE