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State agencies ask for comments on draft rules regarding emissions from oil, natural gas

Proposed rules aim to strike balance between emissions, extraction

Hannah Grover
Farmington Daily Times

AZTEC — The northwest corner of New Mexico has pushed federally established limits for ozone while also experiencing a methane hotspot, but it is not the only part of the state that has been impacted by emissions from the oil and natural gas industries.

Ground-level ozone — or smog — can worsen respiratory conditions, and methane is a powerful driver of climate change.

Draft rules released on July 20 for comment by the New Mexico Environment Department and the Energy Minerals and Natural Resources Department aim to cut those emissions from the industry sector while also allowing for continued extraction.

The NMED draft rule focuses on reducing ozone pollution. Ozone is formed when volatile organic compounds and nitrogen oxides interact with sunlight, creating smog. It is often caused by the combustion of fossil fuels. There are seven counties in the state — San Juan, Eddy, Lea, Rio Arriba, Sandoval, Doña Ana and Valencia — that are pushing the federal threshold for ozone levels. If those areas surpass the threshold, it could mean a loss of some federal funding.

The New Mexico Environment Department and the Energy Minerals and Natural Resources Department have released draft rules regarding emissions from oil and gas infrastructure.

More:San Juan County is pushing the federal limits for ozone pollution

Meanwhile, the complementary EMNRD rule aims to reduce the amount of methane emitted from the oil and natural gas sectors. That methane can be emitted through venting or through leaking equipment. The draft rules come after more than a year of work, including community meetings and input from industry stakeholders.

The draft rules were spurred by an executive order issued in January 2019 by Gov. Michelle Lujan Grisham aimed at fighting climate change.

“These are drafts, and this is not yet the formal rule-making process,” said EMNRD Cabinet Secretary Sarah Cottrell Propst during a press conference on July 21, adding that the entities felt it was important for people to be able to look at the draft regulatory language from both departments side by side and provide feedback.

For EMNRD, Cottrell Propst described the draft rule as an umbrella that starts with a data gathering process next year. The second phase of the rule calls for 98% capture of gas by December 31, 2026. Each operator will have to reduce their emissions by a fixed amount annually. 

“There are a lot of ways that they can achieve that, and the rule is very flexible,” she said.

NMED Secretary James Kenney addresses the audience in July 2019 during a meeting at San Juan College about methane regulations.

Some of those methods to achieving the 98% compliance are further detailed in the NMED ozone draft rule. NMED Cabinet Secretary James Kenney said that addressing ozone precursors such as volatile organic compounds also leads to methane emission reductions.

San Juan Basin operators expressed concern during community input meetings last year that the regulations would treat the Permian Basin and the San Juan Basin the same, which could lead to closure of marginal wells in the San Juan Basin.

More:The state is drafting new methane regulations, but some fear that will devastate an industry

Kenney said while the two basins are not mentioned in the draft ozone rule, the department was very cognizant of the differences while drafting it. He said the San Juan Basin operators don’t necessarily produce the same amount of ozone precursors as the Permian Basin operators. That is partly due to the type of natural gas found in the San Juan Basin, which is lower in volatile organic compounds.

"We took into account that the type of gas produced in the San Juan is different than the type of oil and gas produced in the Southeast," Kenney said.

He said if a site cannot contribute to the ozone problem, the operators should not necessarily be responsible for fixing the ozone problem. However, that doesn't waive all requirements for certain facilities in the Northwest.

"You still have requirements to monitor your potential to emit," Kenney said.

Kenney said there are more requirements for high-emitting sites than there are for low-emitting sites. 

Oil Conservation Division Director Adrienne Sandoval said the EMNRD rule also provides flexibility partly based on that input from industry representatives. Sandoval said during outreach to industry groups EMNRD heard that the industry would be better able to manage compliance with the rule if it had flexibility. She said the department listened to that input and created a flexible rule based on a gas capture percentage.

“As long as you meet those targets each year, we’re not dictating how you meet those targets, which lets every operator really pick the way that they can best comply,” she said.

She said that provides operators with the flexibility to use various technologies to increase the amount of methane captured. This also provides an opportunity for innovation and creativity, she said.

Industry, environment groups weigh in on draft rules 

The draft rules have been celebrated by environmental advocates while industry groups have said they will collaborate in the rule-making process.

New Mexico Oil and Gas Association Executive Director Ryan Flynn said in a statement on July 20 that the industry organization and its members "are committed to reducing methane emissions while providing a sustainable source of energy."

"As the state’s rulemakings move ahead, we will continue to collaborate with both agencies by sharing our technical and scientific expertise," Flynn continued. "These rules should build upon the innovative solutions that make New Mexico and the United States the global leader in safe and environmentally responsible energy production. New Mexico relies heavily upon the oil and gas industry for our state budget and funding for public schools, and it is critical that these rules allow our industry to continue to create jobs and revenue amid unprecedented economic challenges."

But Larry Behrens, the western states director for the fossil fuel energy-focused advocacy group Power the Future, was less optimistic. 

"It is my sincere hope that the governor will listen to the energy workers of New Mexico during this process and not allow radical environmentalists to have special access again," Behrens said in a statement. "In the recent past, the governor's administration has shown a pattern of letting green special interests have undue input in New Mexico's energy policy and it needs to stop."

Behrens called it a hypocrisy for environmental groups and elected leaders to push for a delay in federal energy issues due to the pandemic while the state "is working to force new rules without holding a face-to-face public comment meeting." 

More:Should the BLM extend Chaco land use public comment periods due to coronavirus pandemic?

Earlier this year, environmental groups as well as some elected leaders in the state successfully pushed for an extension on the comment period for the Bureau of Land Management Farmington Field Office's resource management plan amendment, which looked at future oil and gas development near Chaco Culture National Historical Park.

While public health orders that have been enacted to reduce the spread of COVID-19 prevent the two state agencies from hosting in-person meetings about the draft rules, a virtual public meeting is scheduled for 4 to 6 p.m. Aug. 6 via webcast and telephone. Cottrell Propst said the formal rule-making process will begin this fall.

EMNRD has stated that there will be further opportunities for comment once the rule has been finalized and goes before the Oil Conservation Commission.

While Behrens expressed concern that the draft regulations could favor environmental positions over industry positions, the rules that have been drafted include exemptions that have some environmental advocates concerned.

Jon Goldstein asks a question, Monday, July 29, 2019, during a meeting about methane at San Juan College.

Environmental Defense Fund Director of Regulatory and Legislative Affairs Jon Goldstein highlighted exemptions in NMED's draft rule for low-producing wells, also called stripper wells, and for infrastructure that emits less than 15 tons of volatile organic compounds annually. He said that could mean a large number of wells — especially in the San Juan Basin — are exempt from regular inspections. Goldstein said the Upper Green River Basin in Wyoming exempts wells from inspections in they emit less than 4 tons of volatile organic compounds annually. He said EDF will be looking closely at those exemptions and what they could mean for the environment and climate, as well as the health of New Mexicans.

"I think what they've put out here is definitely a step toward establishing comprehensive rules," Goldstein said.

He said the two rules have areas that are very promising. Goldstein liked that the rules included infrastructure away from the well site, including midstream sources like pipelines. He also described the goal of 98% capture by December 2026 as a new, interesting and potentially very impactful method.

Goldstein's take was not unique to the advocacy group Environmental Defense Fund.

Thomas Singer, a senior policy analyst for the Western Environmental Law Center, said it is good news that these rules could be finalized by the end of the year. In a statement released July 20, he said they appear to be wide-reaching rules that set tough standards and should deliver real reductions. 

“We still need to carefully go through the fine print to determine whether the rules take effect quickly enough to achieve the governor’s climate goals, and if exemptions are appropriately limited to prevent loopholes that would undermine the purpose of the rules," Singer continued. "We also want to make sure the rules adequately limit venting of raw methane that is particularly damaging to the climate as well as routine flaring which unjustly shifts costs from oil and gas companies onto the public, and that they do not unduly exempt New Mexico’s many low-producing wells and smaller facilities which, collectively, are a significant source of methane waste and pollution."

How to comment

Public comment regarding EMNRD's draft methane rule can be submitted to EMNRD.WasteRule@state.nm.us and should be submitted prior to the close of business on Aug. 17. A copy of the draft methane rule can be viewed online at emnrd.state.nm.us/OCD/rules.html.

Comments regarding the draft ozone rule can be submitted to nm.methanestrategy@state.nm.us or to Liz Bisbey-Kuehn at the NMED Air Quality Bureau, 525 Camino de los Marquez, Santa Fe, NM 87505. The deadline to submit comments is 5 p.m. Aug. 20. A copy of the draft ozone rule can be found online at www.env.nm.gov.

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at hgrover@daily-times.com.

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