State officials urge federal action on Four Corners methane 'hot spot'

State officials urge federal action on Four Corners methane 'hot spot'
Industry official warns of lost revenue due to overregulation

By James Fenton The Daily Times
UPDATED: 07/20/2015 

A natural gas well pad is seen near Piñon Hills Boulevard Monday at the Glade Run Recreation Area in Farmington. (Alexa Rogals — The Daily Times)

FARMINGTON — On Monday, congressional lawmakers called for action on curbing the waste of methane in oil and gas production in New Mexico.

The Democrats — Sens. Tom Udall and Martin Heinrich along with Reps. Michelle Lujan Grisham and Ben Ray Lujan — sent a joint letter to the federal Office of Management and Budget, asking for a timely review of new rules under development by two federal agencies, the Bureau of Land Management and the Environmental Protection Agency.

The proposed regulations are necessary, the letter said, to prevent the loss of natural gas through industry practices of venting, flaring and leaks. The lost methane commonly comes after extraction of the gas by hydraulic fracturing. It can also be wasted during compression or dehydration of the gas as well as during transportation and storage.

Steve Henke, president of the New Mexico Oil and Gas Association, said in an email that energy production in the state adds up to sizable revenue, and the imposition of increased regulations could hamper development — and revenues.

The state receives about half of the royalty revenue from oil and gas leases on federal land.

"Natural gas production is crucial to employment and to the tax base in San Juan County," Henke said Monday in a statement. "The jobs and economic benefits this industry provides the region would be difficult and likely even impossible to recreate if unreasonable regulations drive the industry elsewhere. It is critical that any new regulations be implemented in a reasonable fashion that ensures the environment is protected without forcing operators to prematurely shut-in wells or otherwise curtail operations."

But the lawmakers said such waste means a public resource is being squandered without compensation to taxpayers.

"This methane pollution represents a significant economic loss to the state ... and the nation," the lawmakers wrote in the letter. "When natural gas is vented or flared, it is not included in calculations used to determine royalty payments. As a result, both the state .. and all American taxpayers lose out on royalties owed on the production of these federally owned minerals."

The letter also cited concerns over public health and impacts on the environment.

Natural gas is 90 percent methane, which is a climate-warming pollutant 80 times more potent than carbon dioxide over a 20-year time period. New Mexico is the second leading producer of natural gas in the U.S.

"Federal action is necessary to ensure that steps to limit methane releases are applied consistently across the industry," they added.

Last fall, NASA's Jet Propulsion Laboratory, Los Alamos National Laboratory and the University of Michigan published a report that showed a high concentration of methane above the Four Corners region. Based on samples taken between 2003 and 2009 from space, combined with ground-based testing by Los Alamos researchers, the study showed a 2,500-square-mile "hot spot" of atmospheric methane centered over the area. The "hot spot" zone, which is the size of the state of Delaware, includes the San Juan Basin, one of the largest natural gas-rich basins in the country.

In March 2014, President Barack Obama issued a Strategy to Reduce Methane Emissions, part of the administration's March 2013 Climate Action Plan, which aims to address concerns over climate change. The strategy seeks to reduce greenhouse gas emissions by 17 percent by 2020.

The lawmakers' push for new regulations came as good news to Jon Goldstein, who is with the Environmental Defense Fund.

"Senator Udall and New Mexico's congressional leaders deserve praise for their strong stand on an issue that is so important to taxpayers and the health of their constituents back home," Goldstein said in a statement. "Strong federal rules will help drive sensible, cost-effective solutions to a problem that is currently costing New Mexico more than $100 million per year in wasted gas from federal and tribal lands, not to mention contributing to increasing levels of unhealthy smog pollution."

James Fenton is the business editor of The Daily Times. He can be reached at 505-564-4621 and [email protected]. Follow him @fentondt on Twitter.

Letter on methane hot spot

HomeFour Corners NewsStory