Lawmakers in New Mexico were asked to provide more resources to oil and gas regulators during the upcoming legislative session, after the state recently enacted multiple new requirements intended to curb air pollution from fossil fuel operations.
The next session, scheduled to start in January, will run for the first 60 days of the year and will be focused on new policy, compared to 2022’s 30-day, budget-drive session.
That means 2023 could see more bills introduced by lawmakers to alter state environmental laws that could affect the oil and gas industry.
State officials pointed to staff vacancies at regulatory agencies impeding the State’s efforts to enforce such policies enacted or that could be proposed during the upcoming session.
Rep. Tara Lujan (D-48) said during an Aug. 26 meeting of the Water and Natural Resources interim legislative committee that New Mexico’s new regulations were needed action to reduce the impacts of climate change from fossil fuel production, work she said should continue as the industry grows.
She said State regulatory agencies could need more resources to keep up with expanding operations.
“The theme here is balance and working toward a balance to our environment to our environment and what is happening with our climate,” Lujan said.
Sen. Ron Griggs (R-34), who represents portions of southeast New Mexico within the Permian Basin oilfields said the industry should have heavy input in any state regulations that could impact operations.
He pointed to an ongoing lawsuit from the Independent Petroleum Association of New Mexico, which represents small operators in the state, as evidence that some industry concerns were devalued by state regulators in recent rulemakings.
“We need to work with industry,” he said during the meeting. “The independent producers are not here because they’re suing us. I would love to see that we were all working together in such a way that nobody was having to sue somebody else in order to make something happen.”
This summer, the New Mexico Environment Department (NMED) finalized stricter reporting requirements for oil and gas operators throughout the state, centered in the southeast Permian and northwest San Juan Basin, that sought to reduce the release of air pollutants that could from ground-level ozone.
This was intended to restore New Mexico’s compliance with federal air quality standards, with the U.S. Environmental Protection Agency expected to rule on the Permian Basin’s attainment status of the National Ambient Air Quality Standard (NAAQS) requirement of 70 parts per billion (ppb) of ozone on average.
If the region was deemed out of compliance with the NAAQS, it would trigger federal requirements officials worried would slow the process of permitting oil and gas facilities like wells and drilling rigs by adding additional oversight measures.
NMED Cabinet Secretary James Kenney said the EPA recently completed aircraft monitoring of the Permian Basin oilfields, and the results of the survey would determine any new federal requirements and their impact on the industry.
He reported, about 13 percent of flares where gas is burned surveyed throughout the Permian by the EPA were not lit and leaking air pollutants into the air.
The EPA also reported a leak rate of about 18 percent of natural gas from storage tanks and other processing equipment, Kenney said.
Kenney said the NMED “desperately needed” a bigger investment from the Legislature to ensure proper compliance with the new regulations.
“It’s not a question of if and when things change. And the when things are changing is our ozone levels are now at a point which the federal government is going to sanction New Mexico at some point,” he said. “We’re seeing still significant emissions.
“I’m hoping our rule with then start to limit those emissions, so that we get reductions both in ozone precursors and methane emissions.”
The NMED rules followed regulations enacted last year by the Energy, Minerals and Natural Resources Department (EMNRD) to require operators capture 98 percent of produced gas by 2026, while outlawing spills – meaning they would incur fines immediately ahead of remediation, and banning routine flaring, the burning of excess gas.
EMNRD also increased reporting requirements, targeting released gas as waste commodity.
EMNRD Cabinet Secretary Sarah Cottrell Propst said better oversight, including funding for resources like staff to enforce the new regulations, was needed especially during a time of growth in New Mexico’s fossil fuel industry.
She said 154 operators throughout the state had yet to report their emissions to EMNRD under the new regulations, an issue the agency hoped to resolve through increased resources from the State.
New Mexico last year became the U.S.’ second-biggest producer of crude oil, behind only Texas with which New Mexico shares the Permian Basin – the nation’s most active oilfield.
“The industry is really busy right now in New Mexico,” Propst said. “Our goals of our respective rules are to achieve measurable and durable results of methane emissions and natural gas waste, create regulatory certainty for the industry, promote technology innovation and ensure we have adequate compliance mechanisms.”
John Smitherman, attorney with industry trade group the New Mexico Oil and Gas Association (NMOGA) pointed to several new regulations were levied on oil and gas in recent years, related to emissions, wastewater and endangered species.
He said increased regulation risked impeding operations and stymying one of the state’s leading industries.
Oil and gas production was reported to provide about a third of New Mexico’s budget and millions of dollars to local communities, per NMOGA.
“As a result of these new regulations we will lose production, we will lose revenue, we will lose businesses and jobs and we will lose some economic activity that supports our communities,” he said. “How much? How many? That’s yet to be seen.
“As these rules phase in over the next few years, time will tell how big of a negative impact they will have on our vital oil and gas sector and the communities that rely upon it.”
Adrian Hedden can be reached at 575-628-5516, [email protected] or @AdrianHedden on Twitter.