Environmentalists, industry battle over proposed ozone rule - Albuquerque Journal

Environmentalists, industry battle over proposed ozone rule

Copyright © 2021 Albuquerque Journal

BLANCO – Don Schreiber can see – and smell – several natural gas wells from his ranch home, which straddles Rio Arriba and San Juan counties.

Tucked inside his dusty truck are neatly labeled notebooks filled with air pollution data and the history of regional oil and gas drilling.

He pauses at a well site that was redrilled this summer, pointing at the dark green compressors, tanks and pipes working to extract natural gas from deep underground.

“Every point in this is just like any plumbing in your house: It’s all subject to leaking or venting,” Schreiber said. “But sometimes the biggest discharges come intentionally. They’re part of the design.”

For nearly two decades, Schreiber has advocated for strict industry emissions regulations at the state and federal level.

“Oil companies can choose to capture methane without a regulation,” he said. “It’s common sense. But it’s also about the bottom line.”

On Sept. 20, a New Mexico Environment Department panel will begin to hear the agency’s proposed rules to target ozone pollution in the oil and gas industry.

The rule’s latest version has received pushback from oil and gas companies, which see the regulation as endangering smaller producers and New Mexico’s budget.

A natural gas production site near rancher and environmental activist Don Schreiber’s home near Blanco. New Mexico’s proposed air pollution regulations for oil and natural gas sites have drawn concerns from industry groups and the Legislative Finance Committee. But some, including Schreiber, say the rules may not do enough. (Eddie Moore/Albuquerque Journal)

Environmental groups support the regulation’s broad goals, but many want the proposal to be more stringent.

Gov. Michelle Lujan Grisham’s executive order on climate change tasks NMED with developing enforceable regulations to slash industry emissions.

NMED has authority to regulate pollutants such as volatile organic compounds and nitrogen oxides, which can react to form ozone.

Under the proposal, professional engineers would need to certify emissions data calculated by each oil and gas operator.

“We can’t wait for our ozone levels to get worse,” state Environment Secretary James Kenney said. “We have an unlevel playing field between industry and the government right now.”

More equipment leak inspections and fixes are another proposed regulatory change.

Ozone pollution creates smog and can jeopardize respiratory health, said JoAnna Strother, the American Lung Association’s senior advocacy director.

“We need to see air quality standards get tightened up so we really can be protected,” Strother said. “We still have a ways to go before we make sure we’re breathing cleaner, healthier air.”

Five New Mexico counties earned failing ozone pollution grades in the ALA’s latest air quality rankings.

Eddy County was one of only two rural U.S. counties to rank in the top 25 ozone-polluted places.

Poor air quality in one of the world’s most productive oil basins may be from industrial emissions, or may be drifting in from neighboring Texas.

San Juan County, a gas-producing region, also consistently has ozone levels at or approaching the U.S. Environmental Protection Agency limits.

NMED estimates the rules would reduce ozone-forming pollutants by about 129,000 tons each year, and also reduce about 425,000 tons of methane.

The proposal is a companion to the Oil Conservation Division’s recent decision to ban routine venting and flaring and set a 98% gas capture target.

NMED regulations would apply to oil and gas sites in the high-ozone counties of Chaves, Doña Ana, Eddy, Lea, Rio Arriba, Sandoval, San Juan and Valencia.

The Environmental Improvement Board hearing will likely last for two weeks.

A natural gas well site sits on federal land near Blanco. The State Environment Department has proposed regulations to reduce air pollution in the oil and gas industry. (Eddie Moore/Albuquerque Journal)

Industry and agency experts and environmental groups will present technical testimony each day alongside public comment.

The rules could go into effect as early as March.

Comments submitted to the NMED panel detail a laundry list of concerns about the proposal from New Mexico oil and gas companies.

Ryan Davis, the Independent Petroleum Association of New Mexico president and operations manager of Merrion Oil & Gas Corp. in Farmington, said the rule lacks a “balanced approach to the impacts on smaller operators.”

“The requirement of having certification by a qualified professional engineer is not appropriate and creates an unnecessary burden to operators,” Davis wrote as part of the IPANM’s 200-page technical testimony and recommendations, adding that in-house engineers could certify the emissions data instead.

Davis was a member of the state-convened Methane Advisory Panel. The group of industry and environmental experts helped create the proposed regulations.

Phasing out certain pneumatic control devices has been a sticking point in the rule-making.

The devices control pressure and temperature in oil and gas infrastructure. They can also be a major source of methane pollution.

Davis said replacing all gas-powered pneumatic controllers with zero-bleed devices is expensive in the San Juan Basin, largely because of lack of available power sources.

“It isn’t just a simple plug-and-play type retrofit,” he said.

The agency proposal has changed since the first drafts emerged last summer.

In May, NMED announced that the proposed rules would now include lower-emitting oil and gas infrastructure.

Kenney said removing the exemptions was “the right thing to do” based on science and a need to protect public health and the environment.

Industry groups oppose the lack of exceptions for small producers.

“Even when we’ve had disagreements (with industry), we’ve worked through them,” Kenney said. “We also know that this rule will come with a cost of compliance. That’s something that I think we’re eyes wide open on, as are they, which is why we built a lot of flexibility towards innovation into the rule.”

John Smitherman, a senior adviser for the New Mexico Oil and Gas Association, encouraged the NMED panel to address requirements that he said would be “extraordinarily expensive to attain, if not actually unattainable.”

“If this rule is implemented as written, it can cause a huge number of wells to cease production,” Smitherman wrote in NMOGA’s testimony. “The economic impacts to the owners and operators, their employees, their families, the community, and the state can be profound.”

Bipartisan leaders of New Mexico’s Legislative Finance Committee wrote a letter to Kenney on Aug. 25, detailing concerns about the fiscal impact of NMED’s proposal.

“The equipment and operational costs necessary for compliance with the rule are expected to be especially burdensome for mature wells that produce low volumes of oil and natural gas,” the lawmakers wrote.

The LFC letter cites an industry-supported analysis of potential economic impacts.

A John Dunham & Associates study concludes that over a five-year period, industry compliance costs with the regulations could total $3.85 billion.

More than 1,200 industry jobs could be lost due to the rules, the analysis estimates, with a total of more than 3,200 jobs lost across the state.

Don Schreiber rides along a dirt road that leads to dozens of oil and natural gas production sites near his home in northwest Rio Arriba County (Eddie Moore/ Albuquerque Journal)

For Schreiber, a “strong rule” that reduces pollution is about minimizing harm to the land he calls home.

The binders in his truck will inform his comments at the NMED hearing later this month.

Schreiber has pushed for San Juan Basin gas companies to conduct new drilling on existing well pads instead of carving out entirely new sites with more equipment and more emissions.

Sometimes, he aims an optical gas imaging camera at a pipe or tank to detect leaks.

He worries that the rules have too many exceptions for emissions when it comes to redrilling or completing wells.

“This is a brittle landscape,” Schreiber said. “I can go to well locations that have been closed for 15 years, and I can tell you exactly where it was. It just doesn’t heal.”

Theresa Davis is a Report for America corps member covering water and the environment for the Albuquerque Journal.


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