Opinion: Cutting methane is smart business for New Mexico’s economy

Alexandra Merlino and Johann Klaassen
Special to The Daily Times
Guest Editorial

New Mexico has a real and growing problem with methane waste from oil and gas production that Governor Lujan Grisham is right to address. Leaks, venting and flaring from the tens of thousands of wells across New Mexico and in the Farmington area amount to hundreds of millions of dollars a year in lost profit and tens of millions more of lost revenue to the state.

Methane released without capture on federal and tribal lands alone in New Mexico is estimated to be 570,000 tons annually — more than any other state. Unfortunately, this fact and many others was missed in George Sharpe’s recent piece in The Farmington Daily Times.

It is important to understand that methane is the main component of natural gas. It is the primary energy resource used to generate about one-third of our nation’s electricity. Without oversight, methane can leak at every step in the gas supply chain and throughout the oil production process. 

This waste is bad for business, bad for New Mexico’s taxpayers, and bad for local air quality in San Juan County where air monitors show ozone pollution coming dangerously near to federal health-based standards. 

Some leading oil and gas companies have acknowledged the problem, and are making efforts to combat it. Large oil and gas producers in New Mexico like XTO, BP and Occidental Petroleum have joined in commitments to address methane emissions at the national level. But without strong but fair regulations, New Mexico will continue to lag in this area.

Businesses operate best when they have clear, fair guidelines that reward good actors and hold everyone to the same set of standards. Statewide methane rules such as those supported by Governor Lujan Grisham will do just that.

The status quo is not a viable option. In fact, a recent survey of western states ranked New Mexico dead last when it came to state level standards to prevent leaking and unnecessary waste of methane. This failure of proper state-level oversight has become all the more problematic since the Trump administration’s rescission of a Bureau of Land Management methane rule for federal lands and the weakening of standards set by the Environmental Protection Agency.

Unlike other top producing oil and gas states, New Mexico has no requirements prohibiting methane waste and associated pollution from escaping. In neighboring Colorado and Utah, leaks from oil and gas facilities must be monitored and fixed promptly. 

In 2014, NASA scientists reported the discovery of a 2,500-square-mile methane cloud, the largest ever recorded in the U.S., hovering over the San Juan Basin in the Four Corners region of northwest New Mexico. Although some will still try to debate the cause of the hot spot, subsequent scientific studies confirm that the oil and gas industry is responsible for the lion’s share of the problem.

And efforts to fix New Mexico’s methane problem can help our local economy as well. The methane mitigation industry is large and growing, particularly in states such as our neighbors that have acted to address this problem. Colorado ranks third in the nation for clusters of business involved in the manufacture and deployment of technologies used to limit methane waste from the oil and gas industry. New Mexico unfortunately ranks tenth, showing space for local economic growth in this exciting new industry. 

New Mexico’s methane problem is big, but action to tackle it will be good for our state revenue, long-term economic growth, and for the health of future generations. 

Fortunately for New Mexico, Governor Lujan-Grisham is committed to creating a new era of increased efficiency and increased revenue for public schools and universities through sensible, successful methane rules. 

We support her efforts to create a cleaner, more robust economy for future generations in the Land of Enchantment.

Alexandra Merlino is the executive director of the Partnership for Responsible Business. Johann A. Klaassen, Ph.D., is executive vice president and chief investment officer for Horizons Sustainable Financial Services. Both organizations are based in New Mexico.