By: Adrian Hedden – Carlsbad Current-Argus – EOG Resources, a major natural gas operator in the Permian Basin planned to use solar power to run its gas compressor stations in the region, hoping to reduce emissions from extraction operations.
EOG Resources announced it would use solar arrays to operate compressors throughout southern New Mexico which would normally be powered by natural gas.
The project will use 24,000 solar panels on 70 acres to provide up to eight megawatts for the compressors with no combustion.
It was intended to not only reduce pollution but also operating costs.
The facility was expected to cut emissions by 5,000 metric tons of carbon dioxide (CO2) equivalent per year.
Those reductions could generate $1 million, per a report from the New Mexico Environment Department based on California’s adopted clean fuel standard credits.
It began operations in November 2020.
EOG Chief Operating Officer Llody W. “Billy” Helms Jr. said the company sought to embrace the State of New Mexico’s efforts to mitigate pollution from oil and gas facilities.
“EOG Resources is committed to finding technology-forward solutions to reduce emissions from our operations as we look toward the oilfield of the future,” he said. “We are supportive of New Mexico’s broad-based efforts to reduce emissions, which will further incent all businesses operating in the state to innovate.”
NMED Cabinet Secretary James Kenney said a “clean fuel standard” typified by EOG’s recent solar project was essential to protecting New Mexico’s air quality and mitigating climate change.
New Mexico Senate Bill 11 cosponsored by Sen. Mimi Steward (D-17) and Rep. Nathan Small (D-36) would establish such a standard if passed and give incentives to businesses such as EOG to adopt emission-reduction technology.
It was passed by the Senate Conservation Committee on a 6-2 vote and was sent to the Tax, Business, and Transportation Committee.
Under SB 11, projects like EOG’s that generate solar credits could be sold to transportation fuel producers unable to meet the fuel intensity standards set by the bill.
The bill would require the carbon intensity of transportation fuels to be reduced by 10 percent from 2018 levels by 2030 and 20 percent by 2040.
After 2040, the Environmental Improvement Board would develop additional standards based on technological advancements.
Carbon intensity is the number of emissions released per unit of fuel energy, the bill read, during the fuel’s life.
“It is imperative for our environment that we reduce the carbon intensity of fuels that power our economy,” Kenney said. “A Clean Fuel Standard could enable businesses to substantially reduce their greenhouse gas emissions.”
Through hiring full-time employees at the New Mexico Environment Department to facilitate and enforce the clean fuel standard program, an analysis from the Legislative Finance Committee found SB 11 would cost about $2.4 million over the next three years if enacted.
The bill would also create a new fund for the program, using dollars generated through fees on providers and anyone generating credit, the analysis read.
“SB11 would lower emissions from transportation fuels, resulting in improved air quality which may increase the number of days with an air quality index of moderate or good, one of NMED’s key performance measures,” reads the analysis.
Energy, Minerals and Natural Resources Department (EMNRD) Cabinet Secretary Sarah Cottrell Propst said the EOG project demonstrated how the industry could benefit from a clean fuel standard while the state attempts to reduce greenhouse gas emissions.
“This project provides a first-hand example of how companies could benefit from the Clean Fuel Standard Act,” Propst said. “Innovation is key to reducing emissions in the oil and gas sector. Expanding renewable energy in facilities is just one way to reduce greenhouse gas emissions in the oil and gas industry.”
Cabinet Secretary of the New Mexico Economic Development Department Alicia Keyes said the program would allow businesses to develop market-driven solutions to reduce pollution while remaining financially viable.
“Businesses want to develop clean-fuels technology and this initiative will provide a market-based incentive for them to create these high-paying jobs and invest in New Mexico,” she said.