Draft regulations in New Mexico to limit methane emissions from the oil and gas sector must be strengthened by removing loopholes for low-producing wells, according to an analysis by the Environmental Defense Fund (EDF).

methane emissions

The proposed rules were unveiled in July by the New Mexico Environmental Department (NMED) and Energy, Minerals and Natural Resources Department (EMNRD).

EDF on Friday published an updated estimate of oil and gas methane emissions in the state, finding that annual emissions stand at an estimated 1.1 million metric tons. This is equal to the near-term climate impact of 25 coal-fired power plants and about five times higher than what current Environmental Protection Agency data suggest, EDF said.

In addition to methane, the industry also emits an estimated 337,500 metric tons of smog-forming volatile organic compounds (VOC) each year, researchers found.

The study modeled the impact of removing exemptions currently included in the draft rules.

The NMED and EMNRD rules as written would combine to reduce methane emissions by 21% statewide, “as compared to reductions of 56% possible with a set of comprehensive policies proven to be cost-effective in other oil and gas producing regions,” the EDF team found.

As for VOCs, which are emitted in tandem with methane from oil and gas operations, the proposed rules would cause an estimated 19% cut in emissions versus a possible 58%, researchers said.

The methane controls proposed by NMED do not apply to low-producing wells or wells under certain pollution thresholds, meaning 95% of well sites in New Mexico would be exempt, EDF said, adding, “This severely limits the pollution reductions possible in parts of the state at risk of exceeding federal ozone standards.”

The analysis “makes clear that the agency must eliminate proposed loopholes” to achieve the Environment Department’s mission of protecting News Mexicans from pollution, Goldstein said.

EDF used peer-reviewed satellite data combined with extensive research studies to conduct the latest estimate of emissions.

“Thanks to the incredible scope and frequency of satellite observation along with extensive and ongoing field research by EDF in the Permian Basin, scientists now have an unprecedented view into oilfield emissions and New Mexico and what will be required to reduce them,” researchers said.

Economic Impact

EDF estimates the value of wasted methane, the main component of natural gas, adds up to $271 million annually in New Mexico, translating to $43 million in lost tax and royalty revenue for the state.

Gov. Michelle Lujan Grisham’s administration “has an excellent chance to enact meaningful safeguards that eliminate loopholes and maximize health and climate benefits,” said EDF’s Jon Goldstein, director of regulatory and legislative affairs. “This data sends a clear message that stronger action is needed to protect communities and families across the state and achieve the governor’s goal of nation-leading rules…

“Strong, cost-effective solutions are available for reducing emissions, and both the science and economics point to the importance of adopting robust final rules.”

Analysis by Synapse Energy Economics Inc. of EDF’s proposed comprehensive methane controls found them to be “extremely cost effective, delivering a 30% return on investment for New Mexicans, including $1.2 billion in avoided air quality nonattainment costs and $126 million in human health benefits.”

Lujan Grisham in 2019 issued an executive order mandating a minimum 45% reduction in greenhouse gas (GHG) emissions by 2030 versus 2005 levels, and requiring NMED and EMNRD to enact enforceable statewide methane controls for oil and gas companies.

Colorado Gov. Jared Polis also is targeting further cuts in methane emissions through the recently unveiled Greenhouse Gas Pollution Reduction Roadmap, which aims for a 50% reduction in total GHG pollution by 2030 versus 2005 levels.

At the federal level, the Trump administration has sought to roll back Obama-era methane controls through executive action and in the courts. President-elect Joseph R. Biden Jr. is expected to lead a renewed push to limit GHG emissions when he takes office in January.