Home New mexico economy New Mexico to introduce ozone restrictions on oil and gas

New Mexico to introduce ozone restrictions on oil and gas

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After two years of town hall meetings, court cases, and analysis, the New Mexico Department of the Environment (NMED) is less than a week away from unveiling its new regulations to reduce air pollution. ozone from oil and gas for a vote and potential enactment.

The Environmental Improvement Board (EIB) planned to start its virtual public hearing on September 20 where the NMED will present the proposed regulations and could see an EIB vote to approve or disapprove the rules.

NMED began the rule-making process after Governor Michelle Lujan Grisham, via an executive order, called on state agencies upon taking office in January 2019 to reduce pollution and gas emissions at greenhouse effect as a means for the State to reduce its impact on climate change.

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Subsequently, the NMED and the Department of Energy, Minerals and Natural Resources (EMNRD) committed to separate regulations intended to complement each other and reduce air pollution from oil and gas.

The REMRD proposal was approved earlier this year by the Oil Conservation Commission and required oil and gas operators to capture 98% of the gas produced by 2026, while ending routine flaring and banning spills. , which means that any accidental release could immediately lead to penalties.

The NMED rules to be presented next week target emissions from oil and gas operations such as volatile organic compounds (VOCs) and nitrogen oxides (NOX) that form ground-level ozone when they interact with sunlight. Sun.

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Long-term exposure to ozone has been known to cause respiratory illness and cancer, according to the US Environmental Protection Agency.

NMED monitors recently discovered that counties in New Mexico’s major oil and gas region, in the southeastern corner of the state, had high levels of ozone, exceeding the national standard for quality. ambient air (NAAQS) of 70 parts per billion (ppb).

The rule-making by NMED would only apply to areas within 95% of the NAAQS exceedance.

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This means that the EPA could view these areas as “no-hit” areas, triggering more stringent federal requirements that could block the development of some oil and gas projects.

The NMED estimated that its proposed rules, if adopted by the EIB, could reduce ozone pollution by around 260 million pounds per year.

But the cost of compliance was a sticking point for oil and gas industry advocates, following a report commissioned by the New Mexico Oil and Gas Association trade group that said the rules would cost $ 730 million. dollars in revenue to state and local governments while costing the operators themselves. to $ 3.8 billion over the next five years as they scrambled to comply.

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The report sparked concern from the New Mexico Legislative Finance Committee (LFC), which expressed concerns in an Aug. 25 letter to NMED.

“The LFC is concerned about the potential fiscal impact of the rule on the state’s oil and gas industry, particularly on small independent producers operating low-volume oil and gas wells,” the letter said.

Larry Behrens, of New Mexico’s oil and gas industry advocacy group Power the Future, said the rules proposed by NMED were too costly for an industry seen as one of the main engines of the economy. from New Mexico.

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He said the proposal should go to the New Mexico legislature for approval instead of the EIB.

“The governor knows that the huge price tag of this rule means it would have a hard time getting past the Legislature, so it must instead enforce it through regulations,” Behrens said. “The hard-working men and women of the energy industry and every family in New Mexico deserve better than a governor who tries to hide the truth.

“A rule with such a huge impact on our state would have to go through the legislature where New Mexicans can see where their representatives stand.”

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In response to NMOGA’s testimony, the NMED in a recent filing agreed to multiple rule revisions that could ease the cost of compliance.

NMED agreed with NMOGA to add language that could allow an emissions source such as an oil well or storage tank to avoid regulations if source ozone concentrations were reduced with success below the NAAQS.

But the state did not concede, despite a suggestion from the Independent Petroleum Association of New Mexico, that counties could be excluded if their concentrations fell below 95% of the NAAQS, arguing that any reduction in a given county must at least in part be attributable to the new NMED rules.

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The Ministry also agreed to allow producers to use manufacturer specifications or alternative maintenance practices developed by “qualified personnel based on engineering and field experience.”

In a rebuttal from the Environmental Defense Fund (EDF), the group claimed that Occidental Petroleum, one of the largest producers in the Permian Basin, agreed with several provisions proposed by EDF.

EDF proposed in a September 7 filing to add wording to increase inspections and repair of leaks in facilities less than 1,000 feet from homes, schools or businesses, while requiring operators to renovate sooner. gas valves with zero emission devices and require the use of backflow devices. reduce emissions during well completion.

“We respectfully urge the EIB to take into consideration the joint proposals which represent the collective thinking of the second largest oil company in the state and a coalition of non-governmental organizations,” reads the EDF file. .

Adrian Hedden can be reached at 575-618-7631, [email protected] or @AdrianHedden on Twitter.

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