Udall hopes to change law after methane rule vote
Methane regulations aim at reducing emissions, but oil and gas industry officials are concerned about the economic impact
- The regulations require operators to decrease natural gas flaring, replace high-venting equipment, and find and fix natural gas leaks.
- Industry officials say the regulations could make marginal wells unprofitable.
- Gobernador rancher Don Schreiber said the Four Corners could be a leader in methane mitigation.
GOBERNADOR — After the U.S. Senate narrowly voted to uphold the Bureau of Land Management's Methane and Natural Gas Waste rule earlier this month, Sen. Tom Udall, D-N.M., co-sponsored a bill to repeal the Congressional Review Act.
The CRA allows Congress to permanently overturn federal regulations and prevents similar regulations from being drafted in their place. Since February, the CRA has been used more than a dozen times to overturn regulations. The methane regulations were upheld by a 51-49 vote.
The rule requires operators to reduce natural gas flaring, replace high-venting equipment, and find and fix natural gas leaks.
In a press release, Udall said the methane rule will "prevent the waste of taxpayer-owned natural gas, create jobs and shrink the methane hotspot hanging over the Four Corners region."
"We are definitively better off with this rule in place, which enables producers to use simple inexpensive solutions to prevent waste and save resources," Udall said in the press release.
Udall said $100 million in revenue is lost every year in New Mexico through escaping natural gas, and the rule provides a chance to recoup the lost revenue.
However, Robert McEntyre, spokesman for the New Mexico Oil and Gas Association, argues the numbers of jobs lost due to marginal wells that are closed because they have become uneconomical under the rule will hurt the state more than the capture of natural gas that is currently lost through venting, flaring and leaking.
The BLM estimates the regulations will reduce profit margins for small operators by less than two-tenths of 1 percent, but the American Petroleum Institute estimates as many as 40 percent of wells would become uneconomical and would be shut in, according to a nearly 400-page letter the agency sent to the U.S. Department of the Interior in April 2016.
McEntyre cited a the New Mexico Tax Research Institute study that predicts the state will lose $100 to $180 million in revenue over three years due to the rule.
"I think that this is just really bad news for New Mexico," he said.
The U.S. Department of the Interior released a press release this month saying the rule could hurt small independent producers in states like New Mexico.
"As part of President Trump's America-First Energy Strategy and executive order, the Department (of the Interior) has reviewed and flagged the Waste Prevention rule as one we will suspend, revise or rescind given its significant regulatory burden that encumbers American energy production, economic growth and job creation," Kate MacGregor, acting assistant secretary of the interior for land and minerals, said in the press release.
Don Schreiber, a rancher in this small community east of Aztec and Bloomfield, was one of the advocates of the regulation who met with senators before the vote. He believes the methane rule could be a blessing in disguise for the Four Corners region and could help decrease the size of the methane hot spot.
"Someone is going to lead the methane mitigation industry," he said. "The Germans? The Koreans? Us?"
He said San Juan County has always been full of innovators.
"Big fortunes in Farmington have been made by people with a high school education who were working in the oil field and said, 'Hey, I got an idea,'" Schreiber said.
Schreiber said thermal imaging flare cameras have helped create visual confirmation of the leaks he has smelled and tasted over the years.
"We have never gone up there with a flare camera when something wasn't leaking," Schreiber said.
Schreiber admits that cattle produce methane, but he argues that the animals are likely a minor contributor to the methane hot spot in the Four Corners region. He said if cattle were the largest contributor, there would be hot spots over large dairy regions of the country. He said it is easier to control emissions from natural gas than it is to control methane from cattle.
His concerns regarding drilling were sparked because of damage he has seen to the landscape. Schreiber uses cattle to reseed native grasses. He recalls spending two years trying to rehabilitate a small portion of land only to have a bulldozer come in and level it.
"When they just bulldoze it flat, you get the weeds and chamisa," he said.
Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652.