The Bureau of Land Management (BLM) has proposed a sweeping and costly set of new rules and regulations that will dramatically impact the oil and gas industry in New Mexico. The justification for these new rules is the idea that the industry is “wasting” methane by venting and flaring, all despite the fact that methane is the primary component of natural gas that is sold to energy users. In addition, government data shows that the amount of methane that is vented and flared has been dramatically reduced over the past several years because of industry without any additional requirements of oversight. It’s certainly not because of this costly and cumbersome regulatory scheme being proposed. With low prices for oil and natural gas, low producing wells are already in extreme danger of being permanently shut-in. The additional costs of these BLM rules will accelerate this process of closing wells and will contribute to job losses, lost production and waste of resources that will never be produced if wells are closed prematurely. The BLM is required to consider the economic impact of its rule on small businesses.
In its Regulatory Impact Analysis for the proposed rule starting on page 166, the BLM states:
“However, the BLM believes that the proposed rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. Although the rule will affect a substantial number of small entities, the BLM does not believe that these effects would be economically significant. The screening analysis conducted by BLM estimates the average reduction in profit margin for small companies will be just a fraction of one percentage point, which is not a large enough impact to be considered significant.”
Many in the oil and gas industry and the communities in which we operate believe the BLM’s view is not accurate. You can let the BLM know what you think of the economic impact this rule will have on your company, your community and your family by submitting a comment. Click HERE to navigate to the Regulations.gov page and click on the “Comment Now” button in the upper right corner of the page.
The oil and natural gas industry is already fighting for survival in New Mexico in these tough economic times – let the BLM know their proposed rule will needlessly make it worse.