December 12, 2020

Can New Mexico field enough inspectors to curb its massive methane leaks?

Flare Off & Pumpjack (CC BY-NC-ND 2.0) by blake.thornberry

Permian Basin Oil Field in Eddy County

The oil fields of the Permian Basin in southeast New Mexico are quieter since the COVID-19 pandemic hit. But that hasn’t made the job any easier for oil field inspectors.

As a staff manager and inspector with the New Mexico Oil Conservation Division (OCD), Gilbert Cordero spends his days driving a truck around a region larger than Connecticut, checking for leaks in the tens of thousands of oil and gas wells, connecting pipes and storage tanks.

This story originally appeared at Capital & Main and was co-published with the Santa Fe Reporter and is republished here with permission.

Monica Kuehling, an OCD compliance officer in the opposite corner of the state, inspects wells in the San Juan Basin in northwestern New Mexico. She and the other site inspectors often visit between 20 and 50 well sites a day.

Although sometimes, inspectors get to just one.

Kuehling has a 4½ hour drive to some wells in her area, and thanks to distances and bad roads, she tries to hit every well every three years.

Cordero and Kuehling are two of OCD’s 10 inspectors—responsible for checking on more than 52,000 operational oil and gas wells in New Mexico. Their inspections are key to protecting the health of residents and to monitoring the leaks causing massive methane plumes over the San Juan and Permian basins. They’re also important to ambitious plans by Gov. Michelle Lujan Grisham to reduce greenhouse gas emissions from the state’s oil and gas industry, which make up more than half the state’s total.

But at a time when inspections and monitoring should be increasing and becoming more stringent, inspection numbers keep falling short and the number of new wells keeps rising. Furthermore, OCD’s parent, the Energy, Minerals and Natural Resources Department, proposed a 20% cut in funding for the division in the upcoming fiscal year. And even at full capacity, inspectors alone can’t tighten the lid on the oil and gas industry’s impact on climate change.

In a report released earlier this year, Dr. Steven Hamburg, chief scientist at Environmental Defense Fund, wrote, “There’s so much methane escaping from Permian oil and gas operations that it nearly triples the 20-year climate impact of burning the gas they’re producing.”

Nathalie Eddy of the nonprofit Earthworks also monitors emissions from oil and gas wells in the state.

“The emissions in the industry, it’s totally out of control in New Mexico,” she says.

*   *   *

In 2019, Lujan Grisham came into office with a pledge to dramatically reshape the state’s environmental policies and greenhouse gas footprint. With an eye toward addressing climate change impacts on New Mexico, one of the first bills she signed into law set out to reduce greenhouse gas emissions from all sources across the state by 45% compared to 2005 levels.

This was always going to be a difficult goal for a state that relies heavily on oil and gas revenues to pay its bills. Tax revenues generated by the oil and gas sector funded more than 40% of the last state budget.

The difficulty in reining in the industry became even more clear with the October release of the governor’s 2020 Climate Change Report. Included is a new, more accurate greenhouse gas study, which shows emissions from the oil and gas industry are higher than previously reported and account for more than half of all greenhouse gas emissions in the state.

These emissions form clouds over the San Juan and Permian basins that are harmful to people’s health, leading to asthma and other breathing issues in young and old alike.

And the emissions are a potent contributor to climate change. As the state continues warming and drying, a trend that will only strengthen, river flows are declining, fire season is lengthening, extreme heat events are becoming more regular, and the state faces increasing challenges when it comes to everything from water security to the economy.

Because wells are complicated collections of plumbing—loaded with high pressure gas, oil and sometimes both—they require regular inspection to ensure they’re not leaking. Or if they are leaking, that the emissions are within permitted levels.

According to OCD’s quarterly performance reviews, the division had a goal of completing 42,000 inspections in the 2020 fiscal year, which ended on July 1.

It managed to do 36,852.

And OCD plans to inspect even fewer wells in the coming year—31,000, despite a growing number of wells.

These numbers lag behind what inspectors accomplished under former-Gov. Susana Martinez, a Republican whose administration slashed OCD funding by a quarter and left field inspector jobs vacant. During three of the last four years of that administration, there were between 40,000 and 50,000 inspections annually.

Despite ambitious plans under Gov. Lujan Grisham, OCD hasn’t been able to fill positions, despite increases in funding. For most of this year, half of OCD’s compliance officer positions were vacant.

OCD director Adrienne Sandoval acknowledges the inspection gap and says the agency has tried to hire more inspectors. But people with the technical skills necessary for the job are in demand for much more lucrative positions inside the oil and gas industry— the same industry that OCD monitors.

Then the COVID-19 recession hit, bringing a state hiring freeze. Now, “We may not ever have as many inspectors as we might like,” says Sandoval.

The problems could be compounded in the coming fiscal year if her budget takes a proposed $2.7 million cut—equivalent to 20%  of the division’s total. This is part of statewide budget cuts brought on by the pandemic-induced economic downturn.

Sandoval says she’s currently leading a restructuring effort at the agency to increase its efficiency and is planning to increase the use of technological monitoring solutions “so we can hopefully work smarter with the resources we have.”

That technology has yet to be chosen and implemented.
Meanwhile, OCD continues approving drilling permits for new wells in both the Permian and San Juan basins.

And that’s one goal OCD did achieve: In the past year, OCD cleared 95% of well drilling permits within 10 days of submission.

  *   *   *

The New Mexico Environment Department (NMED), too, regulates emissions from the oil and gas sector. While the OCD monitors spills and waste—in an effort to preserve oil and gas reserves, valuable to the state for their tax revenues— NMED’s Air Quality Bureau is in the business of monitoring air quality. Unlike the OCD, the AQB receives its budget from federal grants and permitting fees, not the state general fund. However, the Legislature still must approve how much of that can be spent each year.

In the oil patches, NMED has issued permits for more than 4,800 active oil and gas production facilities.

Leaks from these pumping stations, pipelines, tanks and compressors lead to huge blooms of methane and other noxious gases over the San Juan and Permian basins—blooms that endanger the health of anyone who breathes there.

They also contribute to New Mexico’s sizable greenhouse gas emissions totals, which are twice the national average per capita.

To track those emissions, NMED relies on infrared video monitoring flights arranged by the U.S. Environmental Protection Agency (EPA).

“One benefit of the flyover is you can conduct a huge amount of that type of surveillance over thousands of sources in a relatively short period of time,” Air Quality Bureau Chief Liz Bisbey-Kuehn says. Inspectors then “ground truth” sites with significant emissions. But those flights happen twice a year. Then it takes months for the EPA to collate and verify the data before handing it over to NMED.

NMED also conducts in-person inspections. These are based on reviews of facility operators’ self-generated reports, which are required as part of their operating license. Inspectors visit large facilities once a year and smaller sources every five years. While several people work in the Santa Fe-based office reviewing reports, NMED currently has three field inspectors.

Bisbey-Kuehn says that the gaps between testing—whether by plane or in person—aren’t a big deal: Producers must self-monitor and will face fines if the state learns they have violated their permits. She thinks this generally keeps them on time and honest with their reports.

Eddy, of Earthworks, is, at best, skeptical.

“I think that reliance on self-reporting is problematic,” she says.

She, too, tracks oil patch emissions in New Mexico (and in Colorado) and trains locals to do it as well. Self-reporting, she says, gives operators the chance to clean things up before an inspector ever arrives.

Not only that, but she says the state isn’t doing enough inspections.

Eddy uses an infrared video camera, which allows her to see methane leaks that aren’t apparent to the naked eye. In fact, she can stand well off of an operator’s property and spot and record leaks. It’s equipment the EPA uses, but not all state inspectors carry.

In the San Juan Basin, for example, OCD’s Kuehling says that when she enters a well site, she first makes sure tanks aren’t overflowing. Then, “Mainly, we’re listening.”

“If there’s a little hole anywhere, a leak, a valve is open or cracked, we can hear that,” she says. And when she finds a leak or other problem, she alerts the well operator, who is supposed to report back after fixing the problem. It’s the same process in the Permian Basin.

“The huge challenge is the gap between what these agencies are up against, in terms of ensuring any kind of accountability or oversight, and their current capacity,” Eddy says.

It’s not just a question of hiring more people, she says. “I know they’re trying to be creative and innovative on how to address this,” Eddy says, “but it seems they are up against a battle that is not going to be won in the short term here.”

When asked about apparent gaps in monitoring, Lujan Grisham’s office replied with a statement reading, in part, “The governor applauds both departments’ efforts to build our agencies back up, but there is still work to be done to have the agencies fully staffed.

“All New Mexico agencies are looking for ways to work more efficiently with improved technology.”

  *   *   *

Meanwhile, one positive outcome from the COVID-19 pandemic was a decline in the state’s greenhouse gas emissions. NMED’S Bisbey-Kuehn chalks much of that up to a drop in oil and gas production, with many companies shutting wells and waiting for a market rebound.

But that respite may have already passed: A recent drilling and production update from the chief economist of the state’s Legislative Finance Committee shows that as of August (the most recent data available),  New Mexico oil production had already rebounded to late 2019 levels.

And New Mexico’s natural gas production level is higher than it was before the COVID-19 crash. This is also reflected in the methane clouds re-forming over both the Permian and San Juan basins since the end of summer. At the same time, there are fewer people in the field to monitor and fix wells.

“Used to be you couldn’t drive anywhere without almost getting run over down here,” says Cordero, the inspector from OCD. “There’s just not that many people out there right now.” That means fewer people to check on rigs and tanks, fewer people to write reports and fewer people to make repairs.

Cindy Hollenberg, the compliance inspections manager for NMED’s Air Quality Bureau, says that producers have asked if they can stop reporting and testing because of pandemic staffing reductions.

“We just said, ‘No.’”

“Any company that is still running,” she says, “they are required to follow the rules.”

Meanwhile, on-site inspections continue. COVID-19 hasn’t affected inspectors’ workloads, and, thankfully, there have been no coronavirus infections among the workforce, says Sandoval at OCD.

And due to the pandemic, inspectors steer clear of people they do see. Sandoval has told inspectors they don’t need to interact with oil field workers. If there are workers on a site, inspectors are to stay in their trucks  or move on to the next facility.

Eddy, from Earthworks, has seen these rig hands exposed to dangers beyond COVID-19. “We filmed workers wearing no protective gear getting significantly exposed as they stood on top of a [leaking] tank battery back in March,” she says. Exposure to high levels of methane can lead to rapid asphyxiation. When she returned recently on her first trip to the Permian since then, the tank battery was leaking again. She didn’t need her special camera to see it—she could smell it from the road.

“In our experience … you can smell something, or you might not, depending on the wind direction.” But often, “We turn the camera on and we see … basically an open venting event is taking place in some far off site, and it might be happening for days. Or weeks. Or months.”

Eddy says that monitoring—either remote or in person—needs to happen every single day. “That’s the only way you’re going to catch these things. And no one’s doing that.”

Meanwhile, Kuehling, the inspector from OCD, continues her rounds. She now passes the quiet miles between wells with audio books. Really long audio books. Like War and Peace. “I got through it,” she says, while driving between as many wells as she could.