Jerry McHugh worried stricter emissions rules on oil and gas facilities could damage the bottom line of smaller, marginal wells throughout New Mexico.
McHugh, owner of San Juan Resources in Farmington which operates about 40 wells throughout the northwest San Juan Basin said new rules proposed by the New Mexico Environment Department (NMED) risked raising costs on smaller wells that could stymie production throughout the state.
NMED’s rules were presented before the State’s Environmental Improvement Board (EIB) during a two-week hearing concluding Friday.
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The Board heard testimony from oil and gas producers, stakeholders, elected officials and concerned citizens.
Some called for tougher rules, arguing stricter regulations were needed to combat pollution and climate change, while industry leaders urged caution the state to not enact rules that could negatively affect one its biggest industries and economic drivers.
For McHugh, “overregulated” rules could limit the ability of his company and other independent producers to innovate and devise future solutions.
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“Highly stringent, overregulated, over the top methane rules in this state will quash that innovative spirit and technology driven advances in future drilling and production projects, he said during the EIB hearing.
“Long-term, this will be devastating to New Mexico’s economy. Do not put excessive, over the top regulations onto our already struggling marginal wells.”
The rules as proposed before the EIB, which will hold a later vote on whether or not to enact the regulations, would increase requirements on operators for leak detection, inspections, reporting and repairs.
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They’re meant to limit the emission of air pollutants like nitrogen oxides (NOx) and volatile organic compounds (VOCs) that interact with sunlight to form ground-level ozone, a pollutant known to cause respiratory illness and cancer after long-term exposure.
NMED recently found several areas of the state had ground-level ozone concentrations in excess of the federal National Ambient Air Quality Standard (NAAQS). If an area is deemed by the federal Environmental Protection Agency (EPA), it could unlock stricter federal requirement for leasing and other activities.
Oil and gas regions like southeast New Mexico, including Eddy and Lea counties in the Permian Basin, were found to have ozone levels in excess of the NAAQS, along with parts of the northwest corner and the San Juan Basin.
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A study commissioned by the New Mexico Oil and Gas Association found as written NMED’s rules would costs state and local governments $730 million, while NMED argued the cost of compliance would be less than half at about $338 million.
Whatever the price tag, Director of Climate Education at the Sierra Club Rio Grande Chapter Genie Stevens testified at the hearing that the most important consideration should be the health and future of New Mexico’s children.
She said she teaches educational courses with grade-school students on climate, and that many of the youngsters are already concerned about pollution and its effect on climate change.
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“Our children are disproportionately impacted from pollution by oil and gas operations,” Stevens said. “In the midst of political and economic wrangling, I implore you all to pause and remember the children.”
New Mexico Sen. Elizabeth Stefanics, a frequent supporter of renewable energy policy in the Legislature, said fossil fuels will likely continue to be an important part of New Mexico’s economy and energy sector alongside growth in wind and solar power.
She advocated before the board that language be included in the rules to increase inspection requirements for communities near oil and gas facilities known as “front-line” communities.
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“I realize that the fossil fuels need to be in existence with renewable energy for the foreseeable future. But while we continue to do that let’s not only protect the environment but also the people who live near the establishments that produce fossil fuels,” Stefanics said.
“One of the things I would recommend is that there be frequent inspections, that we protect those individuals within a certain circumference and that we do some sampling of air and water to know if there is any harm being done by the production.”
Holly Steinberg, an Albuquerque said oil and gas must be supported by lawmakers as it provides needed funds to public services like education and healthcare.
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She called on the board to ensure oil and gas in New Mexico would continue to be viable as new requirements are put in place.
“Anytime we’re in the process of making changes for any business, you have to continue to improve our processes but not do it at the detriment of the greater good,” Steinberg said.
“And the people that will end up paying for this are the citizens and businesses of our state. I think it’s more feasible to take a staggered approach, a slightly less aggressive approach and one that is more informed.”
As the hearing ended NMED Cabinet Secretary James Kenney said in a statement that he hoped the board would adopt regulations intended to protect the environment while supporting the industry.
“The Department presented a strong and practical proposed rule to the Board. The Department sincerely appreciates the public’s support, as well as that of the environmental community and industry,” Kenney said.
“We look forward to the Board adopting our strong proposal to protect New Mexicans right to breathe clean air.”
Adrian Hedden can be reached at 575-618-7631, [email protected] or @AdrianHedden on Twitter.