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New Mexico illustrates the challenge of balancing the environment and the economy


A 30-day legislative session currently underway in New Mexico offers insight into the complexities of balancing the environment, energy needs and state budgets.

Participating in the monthly Oilfield Strong webinar presented by OTA Environmental Services, Stephen Robertson, Executive Vice President of the Permian Basin Petroleum Association, discussed the bills being considered by the New Mexico Legislature and how they could have an impact on the region’s oil and gas industry.

Currently, the PBPA is tracking 20 bills during the session, which primarily focuses on the state budget, Robertson said. He said the industry supports one bill in particular, which would fund improvements to Highway 380, which runs from Tatum, New Mexico, to the Texas state line.

“Everyone knows it’s dangerous and we’re excited to see this push for funding to improve this road,” Robertson said.

Another bill backed by New Mexico Governor Michelle Lujan Grisham would establish a hydrogen energy development center.

“Which is interesting because it has been pushed back by the left because it is too dependent, in their view, on hydrogen produced by hydrocarbon development,” he said. He explained that some on the left don’t want anything that supports the oil and gas industry and see the hydrogen dependency of hydrocarbons as supporting oil and gas.

As New Mexico moves toward zero emissions and clean energy, anything that doesn’t harm the state of the oil and gas industry is unsupported, he added.

The challenge is that New Mexico, where the southeast corner is part of the Permian Basin, is heavily dependent on revenue from the oil and gas industry, he said. The state depends on the energy industry not only to provide energy, but for its economy. So state officials can “see very well the reality that if you want to end your dependence on hydrocarbons as an energy source, it doesn’t just impact your energy supplier, it has an impact on your budget. If you stop depending on hydrocarbons, you must fill this void with an industry that will generate income and create jobs.

Also part of the session is a constitutional amendment known as the “Green Amendment” that would guarantee every resident of New Mexico the right to a clean environment.

“The problem with that, on the face of it, is that there’s no definition of what it really means,” Robertson said. “Even simple things like, does the amendment ensure everyone has pure H2O when it comes to clean water? It’s not what comes out of the ground from water wells and it’s certainly not what comes out of the ground when the oil and gas industry drills.

The response of those who support the amendment to these questions has been to let the courts find the answers, he said.

“It helps educate people about how worrying and dangerous this could be, not just for industry and business, but also for citizens,” he said. He indicated that it appears the amendment will not move forward, but cautioned that there was still time to move the bill forward, whether by changing the wording of another bill or by another way to move it forward.

New Mexico has emerged as a state with some of the strictest methane emissions regulations, which Robertson warned could present challenges for operators. He explained that the state has taken a two-pronged approach to the issue, involving the state environmental agency and the petroleum conservation department. The two agencies began working together to develop what was to be a singular framework, he said, but as work progressed the two agencies went in indifferent directions. The result is two separate rules, one from environmental regulators and the other from the Division of Petroleum Conservation, and Robertson said the PBPA pointed to several instances where they don’t work well together. Yet, he said, operators must respect both.

Methane emissions at the federal level are also a focus of concern for the PBPA, which has written comments on proposals for the Environmental Protection Agency.

The EPA has released a document saying this is what it wants to accomplish and is seeking comments. The problem is that it’s hard to provide meaningful feedback “when you don’t have the real details of the regulations. We don’t know what impact this will have on the industry,” Robertson said.

He said the biggest concern was the broad approach, when anyone knowledgeable in the oil and gas industry knows that “one size fits all” doesn’t work. Regulations need to be tailored for upstream, midstream and downstream operations, for private entities versus public companies and even operators active in the Midland Basin versus the Central Basin shelf versus the Delaware Basin , did he declare.

For example, the proposed regulations would require operators of optical gas imaging cameras to take breaks for specified periods of time. It doesn’t take into account how the equipment is used, how the operators work, he said.

“One thing our industry is known for is innovation, not for innovation, but for actually improving operations. These rules would require portable OGI inspections. What about companies that use multifaceted approaches to emissions detection? Those who use aerial or ground sensors, or satellite images to prove emissions. The EPA would limit what is acceptable to comment on. What about the technology of tomorrow or the day after tomorrow? What will be developed later that won’t be useful because the regulations say we have to do it a certain way? »

The concern, he continued, is that although the end goal is to improve emissions capture, actual implementation would lead to a reduction in domestic operations.

“As anyone pays attention to what happened during the pandemic, at its worst, as the world came to a standstill and economies did not move, the demand for oil and gas around the world, especially the oil, fell 10% and that was it,” he said.

Demand has returned to pre-pandemic levels and will continue to climb, he said. US oil producers can produce this demand in an efficient and more environmentally friendly way. But if operations are pushed out of the United States, that production will take place elsewhere and most likely somewhere without the environmental attention of the United States.

“You’re not improving emissions for the world, you’re hurting emissions, you’re hurting the environment. It’s one thing to want to improve, it’s another to want to have an end goal that isn’t justified by the process you’re using,” he said.