Duncan: Aztec Mayor's commentary contains Methane Rule misconceptions
I would like to respond to Aztec Mayor Snover's Aug. 2 editorial decrying BLM's rollback of the methane capture rule. While well written and well meaning, it contains numerous misconceptions that I would like to address.
1. Mr. Snover states throughout the article that our health is at risk due to methane emissions. On the contrary, methane is not harmful to your health. If it were, passing gas would require an air emissions permit. To underline that point, when the Barnett Shale was being developed in and around Fort Worth, Texas, the city commissioned the EPA to conduct an air quality study to help them determine proper setback requirements. Of the 15,000 air samples the EPA analyzed near wells and production facilities, ZERO exceeded safe breathing standards. The bottom line... nobody's health is at risk living or playing near a wellsite.
2. Mr. Snover stated that $330 million per year in Federal Royalty payments is lost due to methane emissions. Indeed, the pneumatic controls on older vintage separators emit approximately 0.7 MCFD in emissions, costing the Feds a little over $0.30 per day in royalty at current prices. Nonetheless, if you multiply that times thousands of wells over an entire year, it adds up to millions of dollars. But let me put it in perspective. Approximately 22,000 of the 30,000 wells in the San Juan Basin produce less than 90 MCFD, the rate under which a well is consider "marginal" by the IRS. At current $2.30 wellhead gas prices (the $330 million is based on $4 gas), a 90 MCFD well would pay just under $30 per day in royalty at a 12.5 percent royalty rate. What is missing from the BLM analysis is the fact that many of those marginal wells cannot justify the capital expenditure to capture that $0.30, and will be plugged out. The revenue lost by plugging out wells making $30 per day will far exceed the revenue gained in Federal Royalties at $0.30 per day on those where emission controls are installed. Further, all the jobs that are associated with those thousands of marginal wells will vanish, along with the money those individuals spend and the taxes they pay in our communities.
3. Mr. Snover stated that without the methane rule, we will never address the methane cloud over the Four Corners region. On the contrary, that methane cloud is NOT being caused by emissions from 30,000 wells in the basin. If the wells were the cause, then there would certainly be methane clouds over the Permian Basin in Texas and the Hugoton Basin in Kansas, each of which has over 300,000 older wells using the exact same old vintage equipment. The difference here is that we have the Fruitland Coal outcrop along the Colorado border, which has forever been and will forever continue to leak methane into the atmosphere at far higher rates than our oil and gas wells.
4. Finally, Mr. Snover states that Interior Secretary Ryan Zinke is ignoring public opinion, "which strongly supports" keeping the rule in place. I have no doubt that Mr. Snover has many associates who share his opinion, but I seriously doubt that on the local level, the majority supports his opinion. Perhaps on a national level, the sheer number of public comments supporting the rule exceeded those wishing to modify it. But I'm guessing most supporters have the same fears and misperceptions that Mr. Snover has.
It is hard to win an argument with someone who is fully informed on a topic, but it is near impossible to convince one who is either ignorant or misinformed. For the most part, Mr. Snover perpetuated that misinformation in his editorial.
He did get one thing right when he said "The oil and gas industry plays a major and appreciated role in Aztec as well as all of New Mexico’s economy."
With that, I certainly agree. I also agree that the same group of citizens he represents are also the same group trying to bring an end to our two coal fired power plants which represent 20 percent of total tax base in the county and many good jobs.
In closing, modification of the methane rule is a GOOD thing that will reduce a serious and misguided threat to the wellbeing of our collective communities.
Mark Duncan is the mayor of the City of Kirtland.