ALBUQUERQUE – Methane emissions from oil and natural gas production in New Mexico have dropped by more than 50 percent over the past year thanks to advances in technology and changes in the way wells are drilled, state regulators said Friday.
Energy, Minerals and Natural Resources Secretary Ken McQueen told a panel of state lawmakers that most companies actively drilling in New Mexico are abiding by reporting requirements and are tracking the volumes of methane intentionally released through venting and flaring as part of their operations.
With 60,000 active wells being documented each month, McQueen said his agency found 56 instances in which operators failed to report the required data.
“That leads us to believe we have a very high compliance level,” he testified.
McQueen presented a series of graphs and charts, including one that showed vented and flared methane made up just over 1 percent of New Mexico’s total natural gas production.
New Mexico statutes place a limit on the amount of time producers can vent or flare, but environmentalists are pushing for the state to do more given uncertainty surrounding an Obama-era regulation that targets methane pollution.
Finalized last year, the federal rule forces energy companies to capture methane that’s burnt off or vented directly into the air at drilling sites on public land. Methane, the primary component of natural gas, is a leading contributor to warming temperatures as it’s far more potent at trapping heat than carbon dioxide.
Congressional Democrats this week urged the U.S. Interior Department not to suspend or delay implementation of the federal rule and called for public hearings if any changes are proposed, saying that failing to capture methane emissions could cost millions of dollars in lost tax revenues and royalties.
Jon Goldstein, director of regulatory and legislative affairs for the Environmental Defense Fund, testified Friday that while there has been progress in reducing emissions in New Mexico, the state’s figures don’t include the amount of methane released due to leaks and other problem with equipment.
Goldstein said leaks account for as much as half of the problem and that an estimated 600,000 tons of methane per year are being wasted.
If the gases were to be captured, that would translate into $28 million in tax and royalty revenues for the state to spend on education and other government programs, he said.
“The solutions are very cost-effective,” Goldstein said. “More product in the pipeline is good for the state, it’s good for the producer and it’s good for the taxpayer.”
Industry experts have argued that critics are basing the revenue estimates on inflated natural gas prices. They also say venting and flaring is sometimes unavoidable given limits on pipeline capacity and other factors.
Ryan Flynn, head of the New Mexico Oil and Gas Association, agreed that producers have a strong economic incentive to recover as much methane as possible but he acknowledged that not all gas can be processed or sold.
He also noted that while production is at an all-time high, emissions have been reduced and the state continues to require capture plans to be submitted.
Flynn outlined the industry’s contributions to the state, from providing one-third of its budget each year to employing more than 100,000 workers. More regulations would compromise that, he said.
“These rules cost money,” Flynn said, “and if you’re concerned about making sure that programs for children or for government remain intact and that state revenues go up, then you absolutely need to have a concern about the viability of the oil and gas industry, and the devil is always in the details when it comes to promulgating regulations.”