Industry leaders step up to self-regulate methane emissions as BLM delays federal rule until 2019

• More than two dozen major oil and gas companies have joined The Environmental Partnership.
• The Bureau of Land Management delayed the rule in order to review certain requirements that would be costly to producers.
• Candidate for New Mexico governor announced campaign plan to implement statewide methane emission rule.

FARMINGTON — The controversial conversation regarding methane emissions and accountability may be shifting from federal rules to self-regulation by the industry.

On Dec. 7, the Bureau of Land Management announced a temporary suspension of the 2016 Waste Prevention Rule regarding venting, flaring and leaks of methane gas. The rule is now delayed until Jan. 17, 2019, giving the BLM time to review parts of the rule.

In the same week, more than two dozen national oil and natural gas producers announced the creation of The Environmental Partnership, which is a coalition of major producers “collaborating to reduce methane emissions and to improve environmental impacts resulting from the production of oil and natural gas,” according to a Dec. 5 press release from the New Mexico Oil and Gas Association.

The delay and the establishment of The Environmental Partnership follow an attempt to delay the methane rule in October.

The methane rule was initially published in the Federal Register in November 2016 “in response to oversight reviews and a recognition of increased flaring from federal and Indian lands,” according to the Federal Register’s Dec. 8 delay announcement. It aims to reduce the waste of natural gas from venting, flaring and leaks during oil and natural gas production on federal and tribal lands.

Though the rule went into effect on Jan. 17, 2017, it would have been fully implemented in January 2018. However, President Donald Trump issued executive orders in January and March of 2017 that called for a review of the rule and for a delay or suspension of the rule, respectively, according to the Federal Register.

After an internal review, the BLM announced an 18-month proposed delay on Oct. 5, though a federal judge reinstated the rule on the same day. A public comment period closed on Nov. 6 regarding the delay.

The BLM and opponents of the methane rule say it is a burden to producers, especially as parts of the rule may undergo significant changes from when it was drafted and finalized under the Barack Obama administration in November 2016 to when it will continue to be implemented under the Donald Trump administration in January 2019.

“In planning for additional review of the rule, the BLM determined that a temporary suspension or delay of certain requirements avoids compliance costs on operators for requirements that may be rescinded or significantly revised in the near future,” the BLM said in its Dec. 7 press release. Delaying the rule until January 2019 “gives the BLM sufficient time to review the 2016 final rule and consider revising or rescinding its requirements. During this time, federal, state and tribal regulations will ensure energy development is done in an environmentally sound, safe and responsible manner.”

U.S. Rep. Michelle Lujan Grisham, who is running for governor of New Mexico in the 2018 election, announced a campaign plan to implement a statewide methane emissions rule “that would cut waste and pollution at both new and existing oil and gas wells while creating jobs and generating revenue for schools,” according to a Dec. 12 press release. If elected as governor, Grisham would “make methane mitigation a priority” and work with oil and gas operators “to adopt sensible mitigation technologies and practices.”

In the absence of a federal rule regarding methane emissions, large producers from across the nation are making efforts to set industry standards through The Environmental Partnership, which is a collaboration between 26 major oil and gas production companies based in the U.S., including major New Mexico producers Apache Corp., BP America, Chevron, ConocoPhilips and XTO Energy, according to its website.

The partnership underscores the industry’s commitment to protecting the environment, New Mexico Oil and Gas Association Executive Director Ryan Flynn said in a Dec. 5 statement.

“Market-based solutions like these are key to helping producers continue emissions reductions,” Flynn said.

Mike Eisenfeld, energy and climate program manager for the San Juan Citizens Alliance, said The Environmental Partnership is “a good start” to reducing methane emissions, which is “a responsibility” shared by oil and gas companies.

“(Methane emission reduction is) a part of the responsibility for oil and gas companies, particularly in the Four Corners area where a lot of the oil and gas facilities are on federal or public land. That should be part of their responsibility, and it should be part of their corporate responsibility, not only to diminish the leaks, but to capture the methane for revenue and royalty purposes,” Eisenfeld said.

"My concern is that you don’t see a lot of the major companies (currently operating) in the Four Corners in the partnership," Eisenfeld added.

However, Eisenfeld said leadership from within the industry and from potential state leadership are a step in the right direction, in the wake of the delay of the federal methane rule, which “went through its due diligence (and) due process and then was yanked in the end.”

The Environmental Partnership has developed three programs that participating companies will start phasing into their operations in January 2018. The programs focus on leak detection and repairs, manual liquids unloading and pneumatic controller upgrades, according to The Environmental Partnership website.

The leak detection and repair program will use optical gas imaging cameras and Method 21 — an Environmental Protection Agency practice that uses probes to measure volatile organic compound leaks — or other instruments and technology to detect methane leaks along transportation pipelines. The program will require participating companies to complete a leak repair within 60 days of detection, unless a system shutdown needs to be scheduled or a part ordered to complete the repair. It will be initiated over the course of 18 months with all sites covered within five years, according to the website.

A second program addresses methane emissions due to liquid accumulation in a natural gas well. Water accumulates in natural gas wells and eventually blocks the flow of natural gas to collection and transportation lines. In manual liquids unloading operation, natural gas flows are temporarily diverted from the well to an atmospheric vent, which allows for pressure changes that clear the way for gas to flow freely, but also can result in the release of methane and other volatile organic compounds into the atmosphere. Participants in The Environmental Partnership committed to having operators onsite or within close proximity to monitor the process and close all vents that open to the atmosphere. The practice will begin as soon as possible, according to the website.

The last program involves the release of methane and volatile organic compounds into the atmosphere through remote control valves called pneumatic controllers. Many natural gas and petroleum facilities use the remote, automated controllers, which are typically powered by natural gas that release small amounts of methane into the atmosphere when used. Companies in The Environmental Partnership will replace, remove or retrofit these pneumatic controllers with lower- or zero-bleed controllers “as expeditiously as practicable” and within five years, according to the website.

The Environmental Partnership will report aggregate data on the number of controllers replaced, the number of monitored manual unloading procedures conducted and the number of sites monitored and leaks repaired on an annual basis.

XTO Energy Inc., which operates in Four Corners and San Juan Basin out of an Aztec office, is part of The Environmental Partnership. Spokesman Jeremy Eikenberry said joining the partnership builds on methane emission reduction efforts “already underway” at XTO.

The company, which is a subsidiary of ExxonMobil, announced similar methane emission reduction efforts with pneumatic controllers and leak detection technology, as well as improvements in facility designs, to reduce emissions in September.

The partnership could grow in terms of programs, Eikenberry said.

“My understanding is that there are plans for future programs. The three (programs) that are discussed now are a starting point. The partnership provides flexibility to allow companies to explore other programs in the future,” Eikenberry said.

Megan Petersen covers business and education for The Daily Times. Reach her at 505-564-4621 or mpetersen@daily-times.com.