Rule would lead to shutdown of wells, which would reduce revenue - Albuquerque Journal

Rule would lead to shutdown of wells, which would reduce revenue

As Congress moves forward to reduce regulatory burdens on families and small businesses, an onerous Bureau of Land Management methane venting and flaring rule has recently come into the spotlight. The Senate is set to vote on whether to repeal the rule. To be clear, repealing this rule would in no way roll back environmental protections: there are already rules by states and the Environmental Protection Agency, which means BLM’s efforts are duplicative and expensive.

Activists in the Washington Beltway are claiming the BLM venting and flaring rule will increase revenues for taxpayers, even though they know it actually will do the opposite. The rule will significantly decrease production on federal lands, which means royalties paid to state and federal governments would also plummet.

Oil and gas production is a major driver of the economy in New Mexico. New Mexico has the highest percentage of leases on federal land in production: 63 percent of the state’s natural gas production and 54 percent of oil production originates from federal mineral leases that returned over $600 million in royalties to New Mexico in 2014. Therefore, a steep decrease in that activity would be a huge blow to taxpayers who rely on hundreds of millions in revenue to fund community colleges, public schools and infrastructure projects.

Without the funds that come in from oil and gas development, financing for important projects will inevitably be cut back at a time when the state is already reeling from budget woes. As New Mexico Land Commissioner Aubrey Dunn recently explained, “New Mexico is currently faced with a severe budget deficit, and the implementation of this rule could not come at a worse time for states such as ours that are heavily reliant on oil and gas production for a balanced budget.”

Needless to say, as these wells shut down, the impact on New Mexico’s economy could be severe. As Gov. Susana Martinez recently wrote in a letter to U.S. Speaker of the House Paul Ryan, “Royalties paid to state and federal governments will decrease, new development on federal lands will stagnate and jobs will be lost if the Venting and Flaring Rule is not repealed.”

The support for repealing BLM’s venting and flaring rule is resounding, and it includes the North Dakota Chamber of Commerce, the Southern Ute Indian Tribe, the New Mexico Business Coalition and the American Iron and Steel Institute. Senators from all over the West have joined Martinez in calling for repeal.

It’s important that just about every recent study has found methane emissions during oil and gas development are very low – they only make up 3.4 percent of total U.S. greenhouse gas emissions – and producers in New Mexico and across the Western states have already made great strides in reducing methane emissions. Producers have every incentive to capture and sell the natural gas – the principal component which is methane – on the market, as that is their product.

Therefore, it’s no surprise that the Environmental Protection Agency’s most recent data show that methane emissions from oil production across the United States decreased 17 percent since 2011 “primarily due to decreases in emissions from associated gas venting and flaring.”

When venting and flaring does occur it is either for safety reasons or because there are certain areas where there are not enough pipelines to capture all the gas. BLM should focus its efforts on permitting the pipelines needed to harness even larger amounts of the gas rather than putting policies in place that reduce production and revenues.

It couldn’t be clearer that the environmental benefits of BLM’s rule are negligible, while negative economic impact will be severe. Senators should understand how much harm this rule would impose on Western states and vote to repeal the BLM venting and flaring rule.

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