New Mexico oil and gas regulators on March 25 approved rules requiring oil and gas operators to capture 98 percent of natural gas waste by the end of 2026, which they say will lead to significant methane waste reduction beginning in 2022.
The unanimous vote by the Oil Conservation Division of New Mexico's Energy, Minerals and Natural Resources Department follows two years of stakeholder outreach, technical research, and testimony by the division to create formal regulations for methane capture that are among the nation's strongest.
The rules will be implemented in phases, with Phase 1 requiring robust data collection and reporting to identify natural gas loss at every stage of production and distribution. Phase 2 of the rules requires upstream and midstream operators, including pipelines, to attain progressively higher levels of methane capture at wellheads and pipelines each year, culminating in 98-percent capture by the end of 2026. The capture target also applies to "stripper wells,"—those that are nearing the end of their economically useful lives—but they will not be required to be fully retrofitted to the extent of more active wells.
The rules stem from Gov. Michelle Lujan Grisham's 2019 Executive Order [2019-003], directing EMNRD to develop methane-capture regulations as part of a statewide, enforceable regulatory framework to reduce oil and gas sector emissions and prevent natural gas waste in the state. They prohibit routine venting and flaring, require attainment of an annually increasing gas-capture target, and allow the state to deny drilling permits if those targets are not achieved.
The rules also encourage innovation in the industry, a key issue brought up during public outreach, according to an EMNRD news release. "By working together, we have come up with rules that require a higher gas capture than any other state in the nation and that will foster innovation and bring additional revenue to the state by capturing more resources," Lujan Grisham said in the release.
The rules also require that new facilities be constructed to minimize waste, and that uncaptured gas be flared, or burned, at well completion to reduce venting of methane. Methane in the first two decades after release is 84 times more potent than carbon dioxide as a greenhouse gas. Flaring the gas at wellheads converts it into CO2.
Other rules pertain to specific capture and reporting protocols for various operator types and require operators to implement alternative beneficial uses for natural gas that cannot be captured.
"Oil and gas operations make up the biggest portion of greenhouse gas emissions in New Mexico," EMNRD Cabinet Secretary Sarah Cottrell Propst said in the release. "This has been a long, thorough process and thanks to the significant stakeholder outreach conducted over the last two years, we have finalized rules New Mexicans can be proud of."
Stephanie Garcia Richard, commissioner of public lands for New Mexico's Land Office, also a partner in the rules, said provisions that would allow the state to collect revenues on vented and flared gas will earn millions of additional dollars for the state's public schools.
"Today, we paved the way for new job creation for a vibrant methane-control industry," she said in the release.