New EPA rule to reduce methane emissions mirrors regulations NM already has in place

A new federal environmental rule aiming to reduce methane emissions produced by the oil and gas industry bears a resemblance to standards New Mexico enacted in recent years.

Environmental advocates are applauding the new federal policies, while some small oil and gas producers are voicing concerns about how this could affect their industry.

The nearly 1,700-page-long rule was announced Saturday, and Gov. Michelle Lujan Grisham said New Mexico had a hand in crafting it. The rule bans routine flaring from new oil wells, requires monitoring for methane leaks from well sites and compressor stations and establishes emissions-reduction standards for high-emitting equipment.

Oil and gas operations are the largest industrial source of methane in the U.S., according to the Environmental Protection Agency. The federal agency said the rule will keep about 58 million tons of methane emissions, which is the equivalent of 1.5 billion tons of carbon dioxide, from being generated between 2024 to 2038.

Lujan Grisham joined federal officials in Dubai over the weekend for the finalized rule announcement at the 2023 United Nations Climate Change Conference. She said in a statement New Mexico drafted its oil and gas rules at a time when the nation’s climate leadership lagged behind. She said the Biden administration has helped the country come to the forefront again.

“We are proud to have laid the foundation for this national rule, which will not only reduce emissions, but spur innovation and economic development across the country,” Lujan Grisham said.

Darin Schroeder is the methane legal and regulatory director at Clean Air Task Force. At a news conference held Monday to discuss the finalized EPA rule, he agreed that it seems like the EPA followed New Mexico’s lead, but the finalized rule doesn’t follow all of New Mexico’s standards.

He pointed to New Mexico’s total ban of routine venting and flaring, which the state’s Oil Conservation Commission finalized in March 2021. Schroeder said the federal rule doesn’t go quite that far in its regulations. The rule requires no routine flaring for new wells — where Schroeder said a majority of emissions come from — and there will be a two-year implementation period.

“What EPA did there was take a step forward toward meeting what New Mexico has done, but it’s not quite there yet,” he said.

Other details in the rule, like the standards to address leaky equipment, reflect regulations New Mexico’s Environmental Improvement Board approved in April 2022.

States now have two years to develop and submit plans to the EPA on how they’ll reduce methane from existing sources. Tribes also can do this. Schroeder said it’ll be worth watching how New Mexico responds to the new rule.

“As a state with strong regulations, I would anticipate that they have less to do than other states who are further behind in the methane regulation space,” he said.

The EPA briefed New Mexico on Wednesday on the implementation of the new rule and is expected to do so again in January, said Jorge Estrada, New Mexico Environment Department spokesperson.

He said New Mexico is currently evaluating the rule against existing state programs, particularly the Environment Department’s Air Quality Bureau permitting, planning and compliance sections. He said the rule also likely impacts methane waste standards from the state’s Energy, Minerals and Natural Resources Department.

The impacts of the more than 1,600-page rule will take some time to understand, Estrada said, and Wednesday’s briefing may provide more information.

ReactionsJoseph Hernandez is the Indigenous energy organizer with Naeva, a Native American rights advocacy organization based in New Mexico. Hernandez, who is a member of the Navajo Nation, said at the Monday news conference he formerly worked in the oil and gas industry, and his family has an allotment in the San Juan Basin.

Hernandez said requiring equipment that doesn’t emit pollutants and inspections of wells with leak-prone equipment are key provisions in the new rule. He recalled how screws could come loose and wells could leak.

“It’s definitely about not if it’s going to happen, but when it’s going to happen,” he said.

Jim Manatt is the CEO of Thrust Energy, Inc., an oil and gas production company based in Roswell. He told the Journal the New Mexico rules already make it difficult for operators to gauge and properly engineer wells.

“All the EPA is doing is catching up to what has already been imposed on New Mexico operators by the Lujan Grisham administration,” he said. “It’s terrible.”

This could cause production to cost more, Manatt said, because it will require more expensive equipment and technology. The EPA says oil and gas companies will have flexibility to use low-cost technologies to monitor emissions.

Manatt said New Mexico’s rules negatively impact production of natural gas in the state and, as a result, will negatively impact the state’s revenue. He said oil and gas producers in New Mexico haven’t yet seen the full results of the state’s relatively new emissions policies.

Revenue from oil and gas production makes up 25%-30% of the state’s General Fund, according to an August 2023 report from the Legislative Finance Committee. That revenue also supports the state’s permanent funds and early childhood care and education fund.

On the environmental side of things, Hernandez, of Naeva, said the new federal standards that imitate New Mexico’s will lessen the amount of harmful pollutants that affect the health and safety of frontline and tribal communities like his.

“Our communities are surrounded by operating wells,” he said. “Our communities deserve protection from emissions.”

Since New Mexico adopted its own rules in 2021 and 2022, the average monthly amount of methane emissions in the air has decreased by 55% and routine venting and flaring by New Mexico oil and gas producers has decreased by 70%, according to the governor’s office.

Emissions related to oil and gas production in New Mexico are half that of Texas, according to an independent study the governor’s office cited. State Attorney General Raúl Torrez, in a statement, thanked the Biden administration for following New Mexico’s lead on these rules.

“These newly passed rules protect New Mexicans by ensuring neighboring states monitor and prohibit high-methane emitting practices when it comes to oil and gas industries,” he said.

He also said the final rule will create hundreds of clean energy jobs.

Patricia Garcia-Nelson, advocate with the environmental advocacy group GreenLatinos, echoed that sentiment at the Monday news conference. She said the opportunity for new jobs combats dialogue from the oil and gas industry about difficulties the new rule creates.

“We deserve clean air, but our energy workers also deserve a safe environment to work,” she said.