Alibi V.28 No.45 • Nov 7-13, 2019

New Mexico News

Oil and Gas Regulations Rebuffed

NMENV Takes on Trump’s EPA

gas refinery?
Courtesy Enterprise Products L.P.

The gas and oil industries in this state literally generate billions of dollars in revenue each year. In recent years, this revenue has become The Land of Enchantment’s prime mover, providing funding for everything from education to infrastructure.

But the process of extracting and processing natural gas—a form of methane, the simplest of the hydrocarbons—creates surplus gas and volatile organic compounds (VOCs), like the carcinogen benzene, that escape into the atmosphere—owing to a low boiling point—either intentionally or inadvertently.

While the State of New Mexico, through the Office of the Governor, New Mexico Environment Department and the Legislature have taken extraordinary measures to regulate this spillage—events like this have led to the creation of a huge methane cloud over the Four Corners region, as well as well-founded concerns about how the presence of such deadly effective greenhouse gases and poisonous volatile organic compound vapors both encourage global warming and pose an imminent public health crisis.

Here are some facts about oil and gas production in New Mexico:

• The State of New Mexico produced about 250 million barrels of oil in 2018. That number is an almost 50 percent increase from the previous year.

• New Mexico also produced 1.491 million cubic feet of natural gas (comprised mostly of methane) in 2018, a 13 percent increase over 2017.

• The revenue produced from such enterprises generated more than $2 billion dollars for state coffers last year.

• A good chunk of the money being used by the legislature and the governor to address chronic issues faced by the state—including education reform—has come from and presumably will continue to come from oil and gas revenues past, present and future.

• Natural gas provides for 31 percent of this nation’s total primary energy consumption.

• Natural gas is a fossil fuel comprised mostly of methane. Methane is a powerful greenhouse gas. Methane is many more times more potent as a heat-trapping gas than carbon dioxide.

• Rules to regulate the amount of methane and VOCs excreted into the air—through oil and gas production processes, leaky equipment, et cetera—was strictly regulated during the Obama administration.

• Trump’s EPA wants to end this sort of regulation, in an effort to spark productivity, global warming be damned.

• It will take humans a long time to wean themselves from the teats of the dead dinosaurs, but it can be done. New Mexico has already begun the process.

To find out more, Weekly Alibi had a conversation with New Mexico Environment Department Environmental Protection Division Director Sandra Ely. NMENV Department Public Information Officer Maddy Hayden sat in on this important dialogue. Here’s a distillation what they told us.

Weekly Alibi: I have a few questions to ask about what the EPA rollbacks on oil and gas regulation mean to New Mexico, what’s at stake and so forth.

Sandra Ely: These rollback proposals are in the comments phase right now and then they’ll go to the EPA for adoption. There are two proposals: one proposal and an alternative. And one would remove methane completely [from federal regulation]. The other would keep methane [regulated] but remove controls [for other emissions]. They’re both bad. They’re both counter to what New Mexico is trying to do with the oil and gas industry by reducing greenhouse gases and methane and protecting public health. But there are two alternatives out there.

Is this issue at all related to the Energy Transition Act signed into law by Governor Lujan Grisham last year?

They’re actually a little different. The Energy Transition Act works with electrical generation and provides for a transition towards renewables. This is more dealing with oil and gas production. So, they’re along two different lines.

Okay. I just wanted to get that clarified. New Mexico gets a lot of money from oil and gas and some say this measure to deregulate will boost profits by lowering costs, potentially bringing in more money to our state. But isn’t that a contradiction of the new energy path New Mexico is forging?

The rollback will provide looser standards for regulating Volatile Organic Compounds (VOCs) [and gasses] including methane. Governor Lujan Grisham signed an executive order last January directing the state to provide a regulatory framework to reduce methane emissions. So we’re trying to reduce methane emissions in oil and gas production and processing, while the federal government is allowing more methane, through this rollback, to be emitted.

With proper regulation of the emission of VOCs and methane under state control, can the oil and gas industry remain profitable in New Mexico?

Absolutely. We’re working with the industry and with environmental groups to figure out the best way to deal with Volatile Organic Compounds and methane emissions. There’s no doubt in my mind that we can have a much greener oil and gas industry that is still very profitable. For example, we’ve seen how Colorado has adopted methane and VOC controls in their oil and gas industry in 2014. They have a profitable oil and gas industry. We’re looking at those rules and more to see what can be done in New Mexico.

So, what’s the heart of the problem at the federal level? There seems to be a stark contrast to what the state has done versus what the feds will do.

One of the big problems we’ve experienced—we have these regulations as kind of a backstop for the state—is that if these regulations are lifted, if they are changed and weakened, we’ll see real problems, especially in the [geographic] basin that shares states. For example, New Mexico and Texas both have operations in the Permian Basin. If Texas is rolling back standards and removes federal standards—the backstop—and New Mexico moves forward, you can see a unlevel playing field [developing] there. The same with the San Juan Basin that is shared by both Colorado and New Mexico. Right now, we have these federal rules that act as a backstop, with Colorado doing more than New Mexico right now. If you roll this back in New Mexico, you can see another unlevel field occuring. The advantage to federal standards is that at least you have a minimum of control. If these rules get rolled back, you don’t have that federal minimum in place and there will be more disparity in regulatory requirements across the states.

That’s a great summary of how regulation and governance go hand in hand. Was it a surprise, then, to see the EPA suggesting that such measures to contravene regulation be initiated?

You know what? A little bit. In one sense, yes—because we know a lot of those oil and gas companies don’t oppose these regulations. On the other hand, we’ve seen the federal government move forward with rollbacks in electric generation, they’re moving forward with rollbacks on vehicle emissions [regulations] and now they’re moving forward with rollbacks on the oil and gas industry. It’s very disturbing, because those three sectors are the top three greenhouse gas producers in New Mexico and we’ve had rollbacks in each and every one of those areas.

These particular rollbacks can also be seen as a public health issue. Do you care to discuss that aspect of the issue?

Yes. Definitely. It definitely is a public health issue. When you roll back controls on volatile organic compounds, you end up with more ozone [in the atmosphere]. Both methane and volatile organic compounds can create ozone under the right atmospheric conditions. And in the oil and gas basins, we are seeing that New Mexico is approaching the federal limit for ambient air quality standards. We’re going to do so [exceed the limit] if we don’t do something now. And ozone can lead to exacerbation of lung disease and heart disease. So when the federal government won’t back controls on VOCs, they are creating a public health problem in New Mexico. It’s our obligation in the state to try to and continue to meet those standards, despite the efforts of the federal government to roll back the controls. We’re just going to have to try to find emissions standards elsewhere. I don’t know where, but we’re going to do everything we can to maintain ozone standards. It’s a serious public health issue.

Do you think that the surrounding states are on board with this regulatory agenda?

I don’t know. I know that Colorado is making considerable efforts to regulate this sector. I’m not sure I know what Texas is doing. I do know that some of the ozone problems in the Permian Basin are related to emissions coming from Texas. The US Parks Service has been able to quantify that. I don’t know what those regulators are doing to address that issue.

Pollutants include volatile organic compounds and methane, but they also include poisonous hydrocarbons like benzene. Are these chemicals natural by-products of extracting and refining natural gas? Can these chemicals be safely mitigated with the right technology?

They can be controlled, absolutely. We’ve discussed the health implications of ozone. But I also want to talk about the health implications of climate change, there are many and they can be severe. By loosening up the regulations on methane, the federal government is contributing to climate change. Methane is a very potent greenhouse gas; in a 100-year scale of time, it’s 25 times more potent than carbon dioxide. On a short-term basis, it’s 84 times more potent than carbon dioxide. Methane makes up a large portion of New Mexico’s greenhouse gas emissions, it’s a significant contributor. Rolling back regulations will result in short-term public health issues and longer-term public health issues related to climate change.

Realistically, how long will it take to move past using this form of energy to heat households, drive industry, et cetera? How long before we can honestly say that we’ve moved away from fossil fuels entirely?

All I can say is that what we’re focused on is being more energy efficient, both in our transportation and in our homes as well as by reducing emissions in the actual production and processing of oil and gas. I don’t have an estimate on how long it will take or when New Mexico and the country will move away from fossil fuels.

What else is relevant to this discussion?

Just one thing. You know, we were talking about whether we were surprised that the federal government went ahead and did this. If you looked at NMENV comments on the proposals, it’s front and center that New Mexico was not consulted in this effort. There is an executive order that requires the federal government to consult with state and local government [on these issues]. We think that in order to comply with this federal executive order on consultations, the EPA needs to engage with local governments and tribes in this state before moving forward.

Are you hopeful for a good outcome in this situation?

I’m an optimist, but this EPA makes it hard to be an optimist. If we had a different EPA, I might be hopeful. But I’m not sure this EPA is going to work with the state. But we’ll see.