Efforts by the new Republican Congress to roll back Obama-era regulations on methane emissions in the oil and gas industry is emerging as one of the first major battles over regulatory reform under President Donald Trump, and New Mexico is at the heart of it.
Industry, environmental groups and government officials are squaring off over new U.S. Bureau of Land Management rules that require oil and gas operators to limit methane emissions caused by the leaking, venting and flaring of natural gas. House Republicans have voted to repeal the rule, approved last November under former President Barack Obama, through an expedited review process that allows Congress to overturn such regulations with a simple majority vote. Similar action now appears imminent in the U.S. Senate.
The fight over BLM’s rule is snowballing amid a hyper-charged political atmosphere that has industry and environmental groups preparing for more battles in coming months over regulations governing the energy industry.
Business groups believe they’ve gained a solid upper hand on energy issues for the first time since Obama took office in 2009.
“The biggest thing for us is we no longer have a presidential administration that’s openly hostile to industry,” said Kathleen Sgamma, vice president of government affairs at the Colorado-based Western Energy Alliance, one of the groups leading the charge against the BLM methane rule. “Trump has plans to energetically encourage oil and gas production, but he’s already helping by simply not discouraging it. Just the political message he brings is huge for us.”
Environmental groups and their allies, on the other hand, are fired up to resist conservative policies at every level, including head-on battles expected on the home front in New Mexico.
“People are very charged and activated, and ready to take action on the ground,” said Erik Schlenker-Goodrich, executive director of the Western Environmental Law Center in Taos. “The Trump administration is pushing people to network and join forces. A lot of power-building is going on to move into position, not just on the methane rule, but on all the decision-making and planning processes related to environmental issues.”
Impact in state
Conflict over the methane rule is likely to move to New Mexico as both sides try to influence how BLM and U.S. Environmental Protection Agency policies are applied at the local level and as the state moves toward elections for governor next year.
New Mexico is playing a key role because it’s particularly impacted by emissions from oil and gas operations. The San Juan Basin in the Four Corners area is responsible for 14.5 percent of total U.S. methane emissions, according to data from the EPA’s Greenhouse Gas Reporting Program. In fact, a 2014 NASA satellite image showed a methane “hot spot” the size of Delaware hovering over the Four Corners.
ICF International, an independent consulting firm, estimates New Mexico loses about $100 million worth of gas extracted annually on federal and tribal lands in the state.
Under BLM’s rule, producers must limit venting and flaring from oil and gas wells, pipelines and other infrastructure on public and tribal lands. They must also periodically inspect operations for leaks and replace outdated equipment.
That could improve air quality, reduce the impact on climate change, and increase federal and state royalties by capturing more gas from operations.
But industry says it’s already attacking the problem on its own, with methane emissions at wellheads down 40 percent since 2006. Imposing new federal rules would hurt industry, particularly small operators, Sgamma said.
“Low-producing wells provide about 20 percent of production in the U.S. and many would have to be shut in because they’re barely economic as it is,” she said.
Rep. Steve Pearce, R-N.M, supported a House repeal of the BLM rule last month. Gov. Susana Martinez also supports repeal and the five-member Eddy County Commission unanimously approved its support in a letter to federal lawmakers.
Broad public input
But Sen. Tom Udall, D-N.M., is now spearheading an effort to avoid a rollback in the Senate.
“Erasing the rule would result in waste of taxpayer resources and dollars,” Udall said. “We need this rule. Enough natural gas nationwide is being wasted annually to power a city the size of Chicago for a full year.”
Pressure to uphold the rule, which has support from more than 100 local officials in New Mexico and Colorado, could still sway the Senate. But if the rule is repealed, environmental groups and others say they will push BLM field offices to take action in local resource management plans. They also plan to push for new state regulations on methane and other environmental issues related to oil and gas.
BLM’s Farmington office is currently amending its 2003 resource management plan for the San Juan Basin, and the Carlsbad office is writing an entirely new plan for the Permian Basin in southeastern New Mexico. Both efforts have spurred broad public input, particularly in the Four Corners, where indigenous groups, environmentalists, outdoors enthusiasts and others want to shield the Chaco Culture National Historical Park from oil and gas operations.
BLM and the Bureau of Indian Affairs held 10 public meetings from November to February. They attracted more than 1,000 participants, plus about 13,000 written comments, said BLM’s state planning and environmental coordinator, Molly Cobbs.
Once drafts of the plans are published, more public comment will be sought. Environmental and other groups will seek local methane emission restrictions and other measures through that process, said Thomas Singer, a Western Environmental Law Center senior policy adviser.
Industry is expecting much broader regulatory reform under Trump that goes beyond the methane rule. That could include faster approval of drilling permits and a reduction in environmental reporting requirements.
“There are extensive, costly information-gathering regulations in place that require a lot of time and money,” said New Mexico Oil and Gas spokesman Wally Drangmeister. “Gathering data is not a bad thing, but federal agencies are forcing us to capture a lot of information outside the normal course of business. That can be a big burden on industry.”
Gregg Fulfer, former Lea County commissioner and owner of the Fulfer Oil and Cattle Co. in Jal, said reporting rules add huge costs to cash-strapped companies. “It requires a lot of manpower I don’t have, so I have to contract out to collect information and fill out forms,” he said. “That’s hard on a small operator.”
But those efforts will face demonstrations against land-lease auctions for oil and gas operations, plus potential lawsuits if BLM and the EPA don’t fully consider environmental issues, as mandated under the Clean Air Act and other federal laws, Schlenker-Goodrich said.
“A lot of federal decision-making is now firmly based on best available science developed during the Obama administration to take into account climate change and other environmental issues,” Schlenker-Goodrich said. “The Trump administration can’t just wave a magic wand to make it disappear. Policy changes from the White House will clash with those decision-making processes and make them very vulnerable to challenges in federal court, and that’s precisely what we’re looking at.”
With gubernatorial and midterm congressional elections next year, opposition groups expect to take the fight to the polls in 2018.
“The pendulum swings back and forth,” Schlenker-Goodrich said. “The Trump administration’s policy aggression will be met with equal and opposite force.”