Group takes aim at Dunn over vented, flared gas

Critics accuse State Land Commissioner of politicizing the office by opposing pending federal rules to curb methane waste

James Fenton
  • An outdoors group is airing a radio ad criticizing the New Mexico Land Commissioner's opposition to BLM rules.
  • The proposed federal rules aim to curb methane waste by oil and gas development on public land in the state.
  • Land Commissioner Aubrey Dunn says those regulations would hurt operators and decrease funding to his office.
  • Oil and gas development makes up the bulk of the land office's revenue, which funds public schools, universities and hospitals.
New Mexico Land Commissioner Aubrey Dunn

FARMINGTON — Since Republican New Mexico Land Commissioner Aubrey Dunn was elected to the office — besting incumbent Ray Powell, a Democrat, by 704 votes after a recount last year — critics have accused him of politicizing the office.

The latest salvo fired his way is a radio ad that began airing last month by a Sacramento, Calif.-based Latino sportsmen group called HECHO — Hispanics Enjoying Camping, Hunting and Outdoors.

The radio spot criticizes Dunn for his opposition to pending federal regulations, like the U.S. Bureau of Land Management's venting and flaring rule that aims to curb methane waste by oil and gas development on public lands in New Mexico.

Rock Ulibarri, a San Miguel County commissioner and a HECHO advisory board member whose voice is featured in the radio ad, said in a press release that Dunn is guilty of being "overly political" at taxpayers' expense.

"We’re deeply concerned that Commissioner Dunn opposes common sense rules to cut natural gas waste in New Mexico," Ulibarri said in the release. “Wasting our natural resources goes against what we teach our kids. Hunters and anglers use all of what we kill or catch, and we feel the same about our natural resources — including taxpayer-owned natural gas resources on our public lands."

In an email, Dunn said updating oil and gas regulations only jeopardizes operators in a prolonged bust cycle. And he disagrees with the premise that lost revenues would be remedied by the pending rules.

"Those groups opposed to my stance on BLM’s regulations say these new rules will boost revenue, but in actuality they will significantly decrease income to the State Land Office, which will directly translate into lost revenues for our public schools," Dunn said. "The correlation is quite simple: regulations cost money. If there were a cost-effective way for oil and gas producers to capture every molecule of natural gas that is currently being vented or flared, I believe that the industry would already be doing it."

If the BLM’s proposed rules are implemented, Dunn said, the land office stands to lose revenue from the "large-scale" abandonment of oil and gas wells on state trust lands, accelerated by marginal, or low-producing, wells "being pushed beyond their economic thresholds."

The checkerboard nature of trust lands, he said, complicates the issue.

"(State trust lands are) adjacent to or scattered among federal and tribal minerals, and are contained in multiple federal oil and gas units, communitization agreements and commingling orders within the state where federal law is followed, and these new federal regulations could have serious fiscal implications," he said. "There is no doubt that this would be followed by a wave of bankruptcies from small oil and gas companies. We’ve already seen at least two dozen such bankruptcies in the past year."

Citing a study by ICF International, Ulibarri said Dunn's opposition is surprising in a state ranked first in the U.S. for wasted natural gas.

Commissioned by the Environmental Defense Fund and using data from the U.S. Environmental Protection Agency and the industry, the study found that oil and gas companies in New Mexico burn, vent or leak $101 million worth of natural gas each year and $330 million across the country.

The outdoors group also cited a February report from the New Mexico Energy, Minerals and Natural Resources Department that was requested by Sen. Howie Morales, D-Silver City. The report found natural gas waste occurred on lands Dunn's office oversees. Last year, the department wrote, half of the natural gas vented or flared — about 17 million thousand cubic feet of gas — occurred on state or private lands.

In an April 15 letter to BLM Director Neil Kornze, Dunn accused the federal agency of "overreach" by infringing on the authority of the land office, which collects royalties from oil and gas leases on 9 million surface acres and 13 million subsurface acres of state trust lands.

In the letter, Dunn said the BLM's proposed rule update to Onshore Oil and Gas Order No. 3 — a 1989 rule that ensures states, tribes and taxpayers get fair royalty returns on resources taken from public and tribal lands — exceeded the scope of the agency's statutory authority.

Earlier this month, Dunn was again in the subject of a dispute, this time over drinking water and oil and gas drilling.

State Rep.Brian Egolf, D-Santa Fe, who is the House Minority Leader, served Dunn with a restraining order over the commissioner's attempt to intervene with the application of Egolf's client,  GUS H20 LLC. The company is seeking permission from the state engineer to draw 700 acre feet of drinkable water from the Ogallala aquifer — one of the largest in the world at roughly 174,000 square miles — each year for use in oil and gas operations. The Land Office is a co-applicant and Dunn opposes using potable water for industry use.

Dunn said oil and gas development represents 95 percent of his office's revenue, which, in turn, funds public schools, universities, hospitals and other state projects.

He said he aims to deliver more revenue for the land office and stands by his fiscally conservative values and ranching experience, which he says are better ingredients for land stewardship than "bureaucrats in Washington."

"The future of the Land Office under my administration is one that is open for business," he said.

James Fenton is the business editor of The Daily Times. He can be reached at 505-564-4621.