New Mexico Has the Opportunity to Enact Some of the Best Oil-and-Gas Pollution Rules in the Nation. It Shouldn't Squander It.

This summer, as massive wildfires raged across the west, destroying towns and cities and forcing hundreds of thousands of Americans to evacuate their homes, the Trump Administration finalized its latest environmental rollback, repealing regulations designed to reduce methane pollution from oil-and-gas wells. The consequences of this rollback will be dire. Methane, the main component of natural gas, is an extremely potent greenhouse gas, more than 80 times more effective at trapping heat than carbon dioxide in the first 20 years after it is emitted. Oil-and-gas operations release vast quantities of this super-pollutant, along with smog-forming fumes and cancer-causing toxics also present in raw natural gas.

Adopting rules of this sort would be particularly meaningful in New Mexico, the second largest oil producer in the nation, where approximately 138,000 people live within half a mile of an oil-and-gas facility. New Mexico's Governor Michelle Lujan Grisham condemned EPA's action as "utterly disheartening" and promised to adopt robust, state-level regulations to fill the void created by the federal government's abdication of its responsibility to control pollution. Other western states such as Colorado and Wyoming have adopted their own rules to limit oil-and-gas pollution. These regulations rely on tried-and-true pollution control techniques, requiring operators to conduct regular inspections to identify and repair leaking equipment and to replace outdated equipment with newer technology designed to reduce emissions. Because these measures result in the recovery of natural gas--a valuable commodity--they often pay for themselves in the months or years after they are adopted.

Adopting rules of this sort would be particularly meaningful in New Mexico, the second largest oil producer in the nation, where approximately 138,000 people live within half a mile of an oil-and-gas facility. Yet when the New Mexico Environment Department published its draft regulations in July, it became clear that the state was on the verge of squandering this historic opportunity. This is because the draft rule includes something no other state has ever proposed: a blanket exemption from all pollution-control requirements for smaller and low-production wells. Incredibly, more than 95% of wellsites in the state would be eligible for these exemptions.

The exemptions reflect a fundamental misunderstanding about how the oil-and-gas industry works. Although one might expect smaller wells to release less pollution, a large body of research has shown that this is not the case. While larger facilities produce more gas, smaller facilities typically employ older equipment and receive less maintenance, and thus end up emitting a larger portion of the gas they produce. Nor can the exemptions be justified as a measure to help smaller companies. The exemptions are tied to the size of the wellsite, not the size of the operator. The biggest beneficiaries of the exemptions will be multi-billion-dollar companies like Hillcorp, ConocoPhillips, and Chevron, which own thousands of smaller wells across the state and can easily afford to reduce pollution.

The draft rule contains another critical flaw, related to the regulation of pneumatic controllers--devices that measure and adjust the temperature and pressure of gas in a vessel. Because these controllers are designed to vent as a part of their normal operations, they are a major source of pollution. It is extremely cost-effective to eliminate these emissions, either by switching to electric controllers or to non-electric controllers that use compressed air. Rather than requiring the use of these alternatives at all wellsites, New Mexico's draft would require them only at sites that have access to electric power--a substantial minority of wellsites.

Synapse Energy, an environmental consulting firm, looked at what New Mexico could accomplish if it eliminated the exemptions for smaller and low-production wells and fixed the pneumatic provision. The results were stunning. If fixed, the rule would reduce methane emissions by 8.6 million metric tons over the coming decade, achieving a short-term climate impact equivalent to eliminating 19 coal-fired power plants. This would make the rule one of the most significant climate regulations ever adopted at the state level. The rule would also protect tens of thousands of New Mexicans from dangerous fumes linked to asthma attacks, heart attacks, cancer, and birth defects. And, by forcing operators to capture natural gas rather than wasting it, the rule would bring in almost $100 million in additional royalties for a cash-strapped state. All told, the rule would produce tens of billions of dollars in benefits, far exceeding the costs.

There is still time for New Mexico under Governor Lujan Grisham to get it right. If it does, it will deliver tremendous environmental and economic benefits and set an example for other states to follow. But given how flawed the draft is, state regulators have their work cut out for them.