Today, the Western Environmental Law Center released a new report on venting and flaring in New Mexico authored by Thomas Singer, Ph.D., who served on the state’s Methane Advisory Panel. The report takes a close look at how much natural gas is being flared in New Mexico, which companies are responsible, how routine flaring is contributing to the problem, and pragmatic solutions for inclusion in the state’s new methane waste rule.
In May, the New Mexico Oil and Gas Association (NMOGA) released a report “Flaring in the Oilfield” because, NMOGA said, its members recognized a need to provide greater clarity as to why natural gas is flared. The report identified six reasons why oil and gas producers flare, each of which the report described as “short-lived,” “limited,” or “temporary.” However, NMOGA’s report ignored a critical piece of the flaring story – that a significant amount of flaring is long-term and virtually unlimited. This results from deliberate choices by companies to favor higher-profit oil production and simply dispose of co-produced gas by routinely flaring it rather than sending it to market. This robs New Mexico taxpayers of royalties on publicly owned gas, harms public health, and contributes to the climate crisis.
Analysis of state data reveals that flaring doubled from 2017 to 2018, from 14.9 to 33.4 billion cubic feet (Bcf), declining slightly to 30.8 Bcf last year. This was enough gas to supply the home heating and cooking needs of 80% of New Mexico households for the entire year.
- Just three companies, Devon, Ameredev, and XTO, were responsible for almost one-third of all reported flaring. The top 10 flaring companies accounted for 71% and the top 20 accounted for 95% of all flaring statewide.
- Some major producers flared extremely large shares of their gas production, led by Ameredev at a shocking 78%, Spur at 38%, Percussion at 27%, and Centennial at 24%, while Devon, XTO, Marathon, and WPX flared between 4% and 12% of total production.
- Several major producers sought authorization to flare over very long periods of time. For example, EOG sought and OCD issued permits on a rolling basis to flare two wells continuously for more than four years, and XTO has been flaring four wells for over three years, essentially for the entire life of these wells. COG has been flaring two wells for over three years, Matador has been flaring six wells for over two years, and Marathon has been flaring one well for one year and four months – again essentially the entire life of the wells.
Routine flaring has long been tolerated by New Mexico regulators. The state’s new methane waste rules offer an opportunity to end this practice. However, the comment draft released by the state Oil Conservation Division (OCD) leaves the door open to empty promises by companies and weak enforcement that is simply absorbed as a cost of doing business.
To be truly effective, OCD’s waste rule must (1) ban routine flaring, (2) require firm agreements for gas capture and sale or use for new drilling that can be enforced by the state, and (3) require wells to be shut-in when gas cannot get to market, a practice opposed by industry but widely adopted this spring in response to low oil prices. As of late July 2020, companies applied for and OCD approved shut in for nearly 6,000 wells, roughly 12% of all active oil and gas wells in the state. Shut-ins are justified by the public interest in preventing methane waste and pollution, which is at least as important as companies’ private interests and actions to shut in wells to maintain profits.
“Requiring oil and gas companies to capture and sell 98% of the gas they produce, as proposed, would be the toughest venting and flaring rule in the nation,” said Thomas Singer, Ph.D. with the Western Environmental Law Center. “But it’s not enough to be tough on paper – the rule needs to be strengthened to provide more transparency and accountability for the public, to work equally well for the San Juan Basin and the New Mexico Permian, and assure that it will be strictly enforced to end the ongoing, massive waste of natural gas.”
OCD’s rule will work in tandem with a counterpart rule at the New Mexico Environment Department (NMED). This report does not address an enormous exemption problem with the NMED rule, which, if left unchanged, would continue to leave the vast majority of wells in New Mexico unregulated.
Background – 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. Over 500,000 metric tons of methane were wasted in the New Mexico Permian in 2018, 4% 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 87 times more potent than 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.”