Udall & EDF Proposal Would Eliminate Jobs, Over $750 Million in State Revenue for Schools, Health Care and Public Safety

Nov 09, 2017 11:26 AM

UdallRobert McEntyre / NMOGA / Nov. 9, 2017

SANTA FE, NM – Today, New Mexico Senator Tom Udall joined political activist group Environmental Defense Fund in pressuring regulators to adopt devastating rules on New Mexico oil and gas producers. The rules are estimated to cut oil and gas production, resulting in more than $750 million in lost general fund revenue for New Mexico schools, health care, and public safety. The loss in production could also eliminate 2,200 oil and gas jobs and as many as 5,390 direct and indirect full-time jobs.

“Instead of commending New Mexico’s oil and natural gas industry for successfully lowering emissions, Senator Udall is placing special interests ahead of hard working New Mexicans,” said NMOGA Executive Director Ryan Flynn. “Udall’s plan is a solution in search of a problem and will result in the loss of jobs and more than $750 million to the state’s general fund.  That’s a $750 million loss to funding for our schools, health care and public safety. Senator Udall should sit down with operators in his own backyard and learn how they are already achieving the same goals without expensive and unnecessary regulations.” 

Key facts Senator Udall and the Environmental Defense Fund excluded are below:

  • METHANE EMISSIONS ARE ON THE DECLINE: Across the United States and New Mexico, methane emissions from oil and natural gas production are plummeting. According to data publicly available from the EPA, oil and natural gas methane emissions have fallen 19%1, while methane emissions in the San Juan Basin have dropped an astonishing 47%2 and dropped 6%2 in the Permian Basin. This 2011-2016 EPA reported field data is more relevant and current than the EDF report, which is based on 2015 computer-simulated figures. 
  • PRODUCTION IS INCREASING AS METHANE DECLINES: Even as methane emissions have dropped, production has continue to increase. In the United States, oil production is up 28%3 and natural gas production has increased by 52%4, while oil production in New Mexico has climbed 104%5 and natural gas production has increased by 1%6.
  • SENATOR UDALL’S RULES WOULD HURT PRODUCTION AND STATE REVENUE: The Interstate Oil & Gas Compact Commission, a bi-partisan group of regulators across the United States, estimates that the rules Senator Udall is advancing would cost New Mexico $5006 million in reduced revenue from oil and $2506 million in reduced revenue from gas. Further injuring the state, the lost production could eliminate 2,200 full-time oil and gas jobs7 and as many as 5,390 direct and indirect full-time jobs7.
  • METHANE VENTING AND FLARING IS DECLINING: The New Mexico Energy, Minerals, and Natural Resources Department reports that flaring of methane during the initial stages of oil and gas production has dropped by more than 50%8 this year alone, even as the number of drilling rigs operating in New Mexico have more than quadrupled9. Methane venting, a process used for safety purposes to relieve well pressure is down by 50%8 this year as well. Overall, only 1% of all gas produced in New Mexico is vented or flared8.
  • GREENSHOUSE GAS EMISSIONS ARE DECREASING: Reductions in emissions aren’t just limited to methane, the EPA reports that overall Greenhouse Gas emissions have dropped by 11.5%10 nationally, and by the end of this year, New Mexico will realize a 33% reduction in Greenhouse Gases in just six years11.
  • AIR QUALITY IS ACTUALLY IMPROVING WITH THE HELP OF NATURAL GAS: The Environmental Protection Agency reports that the three most dangerous criteria pollutants are falling nationally as a result of the mass transition to natural gas for home and commercial electricity. From 2005-2013, the EPA reports that sulfur dioxides decreased by 68%12, fine particulate matter decreased by 60%12, and nitrogen oxides have decreased by 38%12, all while natural gas electrical generation climbed by 78%13.
  • GREENHOUSE GAS EMISSIONS AND LEAKS ARE ALREADY REGULATED: The Environmental Protection Agency regulates Greenhouse Gas emissions from oil and gas production through their “quad-O” rule, and requires all New Mexico oil and gas producers to develop comprehensive leak detection and repair (LDAR) programs14. In New Mexico, the state Oil Conservation Division regulates venting and flaring and requires all producers to implement a gas capture plan15.

“Reducing emissions and responsibly producing oil and natural gas is a top priority for all operators in New Mexico, and this data shows that our commitment to protecting the environment is having measurable success. While Senator Udall works on behalf of special interest groups in Washington, DC, oil and natural gas producers in New Mexico have been leading the way in developing new and innovative technologies to reduce the footprint of operations and increase gas capture. These market-based solutions are the key to helping oil and gas producers continue these reductions, rather than Udall’s expensive regulations,” Flynn concluded.

Citations:

EPA Greenhouse Gas Inventory, natural gas and petroleum system methane emissions, 1990-2015

2EPA Greenhouse Gas Emissions from Onshore Petroleum and Natural Gas Production, 2011-2016

4Energy Information Agency, United States Field Production of Crude Oil, 1990-2015

5Energy Information Agency, United States Natural Gas Marketed Production, 1990-2015

4Energy Information Agency, New Mexico Field Production of Crude Oil, 2011-2016

5Energy Information Agency, New Mexico Natural Gas Marketed Production, 2011-2016

6Interstate Oil & Gas Compact Commission, Marginal Wells: Fuel for Economic Growth, Pages 31-33

7Interstate Oil & Gas Compact Commission, Marginal Wells: Fuel for Economic Growth, Table 5a

8New Mexico Energy, Minerals, and Natural Resources Department, Presentation to Hazardous and Radioactive Materials Committeee, November 3, 2017

9Baker Hughes Rig Count, North America Rig Count Summary, November 3, 2017

10EPA Greenhouse Gas Inventory, natural gas and petroleum system methane emissions, 1990-2015

11New Mexico Environment Department, 2011-2017

12 United States Environmental Protection Agency analysis of criteria pollutants, 2005-2013

13Council of Economic Advisers, Economic report of the President, 2017

14 United States Environmental Protection Agency, Code of Federal Regulations Title 40, Chapter I, Subchapter C, Part 60, Subpart OOOO

15New Mexico Energy, Minerals, and Natural Resources Department, Oil Conservation Division, Gas Capture Plan