Exploration

N.M. releases new oil and gas emissions rules

Deals, Shale Boom, emissions

By: Adrian Hedden – Carlsbad Current-Argus – New Mexico state oil and gas regulators released the final version of proposed emissions regulations and petitioned for a hearing to finalize the rules.

The Oil Conservation Division (OCD) and its parent agency the Energy, Minerals and Natural Resources Department (EMNRD) began work on enacting stricter regulations on gas emissions from extraction facilities last year as mandated by Gov. Michelle Lujan Grisham through an executive order.

At the start of her administration, Lujan Grisham established the State’s Climate Change Task Force, made up of EMNRD and the New Mexico Environment Department to find ways state operations and laws could be used or developed to reduce pollution in New Mexico and its impact on climate change.

The rule released Thursday followed a 60-day public review and comment period, along with public hearings held since summer 2019.

Using feedback gained from the hearings and reviews, the OCD sought a final hearing with the Oil Conservation Commission where Commission members would vote whether to make the rules law.

The proposed rule would require both upstream and midstream oil and gas operators to capture 98 percent of their natural gas by 2026, rather than releasing the gas through venting or burning it off via flaring.

Methane emissions from the oil and gas industry make up the largest portion of New Mexico’s greenhouse gas emissions, read a news release from the OCD.

The rules also created new requirements for pipeline operations but were also intended to allow companies to develop their own gas capture technologies and increase data requirements to aid in the 98 percent gas capture goal.

The first phase of the new regulations will focus on gathering data and increasing reporting requirements for operations, aimed at finding sources of gas emissions at every stage of the industry.

Venting and flaring, typically routine actions in the industry, were defined as waste in the new rules and operators were required to report all instances of either practice to the state and owners of the mineral estate where the releases took place.

The second stage will use the data gathered in the first to develop steps operators must take to achieve the capture goal in the next six years.

Operators would determine for themselves how the 98 percent gas capture goal would be reached, and incentives would be offered by the State for the development of new gas capture technologies.

Credits would be offered to operators who detect and fix natural gas leaks at their own facilities.

Operators will be required to cut emissions by a fixed amount every year with “limited exceptions, the release read, for emergencies.

Companies that fail to meet gas capture targets could be subjected to enforcement actions such as fines or well shut-ins.

The rule would also create new requirements for approving drilling permits, which could see permits denied for operators that fail to comply with gas capture specifications.

Stripper wells, or low-producing wells that produce less than 10 barrels per day, less than 60,000 cubic feet of gas per day or have the potential to emit les than 15 tons of volatile organic compounds (VOCs) per year would see some exceptions from the rules related to inspections and retrofits, but such facilities would still be held to the 98 percent capture goal as other operators.

“With this new rule, New Mexico is taking a nation-leading, innovative approach to reduce methane emissions,” Lujan Grisham said. “It is another important step in battling climate change and protecting the environment.”

EMNRD Cabinet Secretary Sarah Cottrell Propst said the rules were specifically intended to cut down on pollution coming from oil and gas – one of New Mexico’s biggest industries.

“The proposed rules provide an innovative approach to reducing natural gas waste and methane emissions in the oil and gas sector,” she said.

Cottrel Propst said the rule would push New Mexico to lead the nation in carbon-capture and reductions in greenhouse gas emissions.

“Thanks to the thoughtful feedback from the public and stakeholders and the dedicated work of the team in the Oil Conservation Division, the proposed natural gas waste rules put forth today are comprehensive and impactful,” Cottrell Propst said.

“Requiring 98 percent capture is an ambitious target that will have a significant, positive impact on New Mexico’s environment for years to come,” she said. “Throughout the process we have promised a nation-leading rule, today we have fulfilled that goal.”

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