Officials send BLM letter over oil and gas regs

James Fenton
Aztec Mayor Sally Burbridge gives a presentation on proposed new federal rules for the oil and gas industry Thursday during a press conference at the Quality Center for Business at San Juan College in Farmington.

FARMINGTON – A group including elected officials, school district superintendents, economic development officials and organization leaders gathered at San Juan College on Thursday to express their concerns over pending federal oil and gas rules they said would lead to damaging economic impacts to San Juan County.

The group, which included all four of the county's mayors, held a press conference at the college's Quality Center for Business to draw attention to a letter making the case that the implementation of proposed regulations for oil and gas production on federal land in their current form — the U.S. Bureau of Land Management's "Waste Prevention, Production Subject to Royalties, and Resource Conservation" rules  — would cause more job losses and permanently close natural gas wells in the San Juan Basin.

Members of the group said the proposed rules would worsen a prolonged local economic decline brought on by the low commodity market prices of oil and gas. That price plunge has resulted in the loss of more than 1,000 local jobs in the last year and reduced the collection of taxes, royalties and fees from oil and gas production that fund services at the city and county levels, contributing to the city earning the inglorious distinction of recently being ranked first in the U.S. in the rate of unemployment growth.

The conference was presented by Four Corners Economic Development, a continuation of the organization's Real People, Real Jobs campaign, said Sally Burbridge, interim 4CED CEO.

Burbridge said the group's joint 17-page letter, along with a collection of about 5,300 signatures of support, would be sent to the state's congressional delegation — U.S. senators Tom Udall and Martin Heinrich and U.S. Rep. Ben Ray Luján — and submitted to the BLM.

Pete Valencia, a representative of U.S. Rep. Ben Ray Lujan's office, speaks Thursday at the Quality Center for Business at San Juan College in Farmington.

Pete Valencia of Luján's office was given a copy of the letter by Burbridge at the event.

"This is one of the first times we've ever had this type of (collective) effort and this type of broad-based support for this issue," she said.

The letter presents perspectives on the the adverse fiscal impacts to various San Juan County entities, including the local chambers, school districts, the city's electric utility and San Juan College.

Farmington Mayor Tommy Roberts said the BLM should either agree to complete a cost-benefit analysis or delay the implementation of the rules.He pointed to the "unintended consequences" of the implementation of the rules that would lead to the premature permanent closure of natural gas wells that will lead to further impacts.

"There will be the loss of corresponding jobs.There's no denying that," Roberts said. "And with the loss of jobs, we'll have less in the form of corporate and individual income tax. And what does it impact? It impacts individuals who lose the jobs. It impacts governmental entities that provide services and programs based on the revenues that they generate from those tax resources."

Roberts said the industry's practice of venting and flaring methane gas into the atmosphere is only done because no viable option exists. Burdening operators with the BLM rules could likely cost anywhere from $5,000 to $50,000 in compliance costs per well or, according to the BLM, $27,000 per operator, he said, which would have the unintended and ironic consequence of leaving the natural gas in the ground, a greater waste of resources that the rules are seeking to address.

"The fact of the matter is that it is the nature of the industry and operations of wells, drilling and completions," Roberts said. "Some of that product is just going to be flared, and that's the nature of the process."

Aztec Municipal School District Superintendent Kirk Carpenter, left, San Juan College President Toni Pendergrass, Pete Valencia of U.S. Rep. Ben Ray Lujan's staff Aztec Mayor Sally Burbridge participate in a press conference Thursday at the Quality Center for Business at San Juan College in Farmington.

State Rep.James Strickler, R-Farmington, who has worked in the industry for 39 years, said the issue was an emotional one for him.

"We're in a tough time right now, and these rules add salt to the wounds, if you will, and the timing is just remarkable," Strickler said.

During a question session afterward, college President Toni Pendergrass said the school is considering cutting $2.2 million from its budget next year. Aztec Schools Superintendent Kirk Carpenter and Bloomfield School District Superintendent Kim Mizell echoed the challenges educators in the county would face under the BLM rules.

"To say this is scary just from our area is one thing," Carpenter said. "But we're not talking about today. We're talking about the future of this state ... Educators, we all understand data, but this is going to outlive a lot of us in this room."

Linda Mickey, executive director of the San Juan United Way, said area nonprofit agencies face a major challenge, as a decline in corporate giving by oil and gas companies has corresponded with a spike in the number of families in the community needing basic necessities like food.

Tom Mullins has run Synergy Operations LLC in Farmington for more than 20 years. Mullins said the costs associated with complying with the BLM rules defy logic and thanked the group for bringing the letter forward.

"The analogy that I've been trying to use is that the proposed regulations are asking (operators) to use two molecules of methane, of energy, to try to save one molecule of energy," Mullins said. "It's a net loss. it's just very challenging."

The BLM is still accepting public comments at on the rules until 11:59 p.m. today.

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