ALBUQUERQUE, N.M. — Methane emissions from oil and natural gas production in New Mexico are higher than what state and federal regulators have measured and the failure to capture the pollution is costing the state revenues and royalties, environmentalists said Thursday.
Representatives with the nonprofit Environmental Defense Fund released a report that aims to quantify the amount of methane intentionally released through venting or flaring processes as well as gas lost through unintentional leaks.
New Mexico’s producers are emitting 570,000 tons of methane annually, amounting to more than $27 million in lost tax revenues and royalties that could otherwise be used for government programs and services, according to the report.
Jon Goldstein, director of regulatory and legislative affairs for the Environmental Defense Fund, said the report represents a snapshot of the volume and scope of methane emissions across all land types, from state and federal to private and tribal lands.
“What this new report emphasizes is that methane is a big problem for the state but it’s an even larger opportunity,” he said. “I like to think of it as a multi-hundred-million-dollar piece of low-hanging fruit in a time of tight state budgets.”
Overall, the oil and gas industry contributes about one-third of New Mexico’s budget each year and employs more than 100,000 workers.
Goldstein and U.S. Sen. Tom Udall, a Democrat, told reporters during a conference call that the state is missing out on an opportunity to collect more money from producers.
Industry officials argue that producers are already taking steps to capture more of the methane due to economic incentives but that estimates from critics of lost revenues and royalties are based on inflated natural gas prices.
The industry also has argued that venting and flaring is sometimes unavoidable given limits on pipeline capacity and other factors.
The latest report follows testimony provided to a legislative panel last week in which state regulators presented figures showing a more than 50 percent decrease in emissions from venting and flaring over the past year.
Industry officials pointed to the reductions and argued that federal regulations called for by environmentalists and Democratic U.S. Sen. Tom Udall would result in higher costs and ultimately job and revenue losses.
The New Mexico Oil and Gas Association said the loss to the state’s general fund could top $750 million if the regulations are kept in place.
Association director Ryan Flynn said producers in New Mexico already have been reducing the footprint of their operations and increasing gas capture efforts, some of which include using drones and other technology to monitor for leaks at well sites and other locations.
“These market-based solutions are the key to helping oil and gas producers continue these reductions, rather than Udall’s expensive regulations,” Flynn said.
Udall said he and his Democratic colleagues will continue to push for the protection of the Obama-era rules. Dozens of Democrats signed on to a letter sent last week to Interior Secretary Ryan Zinke.
The senator acknowledged Thursday that some energy companies have stepped up but that without regulations, others will do nothing to address the problem.