Environmental Project

Some energy transition funding project proposals include fossil fuels

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As the northwest corner of New Mexico prepares for the closure of the San Juan Generating Station, at least one proposed project to help displaced workers could lead to increased natural gas extraction. Last year, the Energy Transition Act committee sent out a request for information on projects that could be funded through the portions of bonds that could be set aside for economic diversification, workforce training and assisting the Navajo Nation. This resulted in more than two dozen proposals, however the funding is not yet available due to a lawsuit that has postponed the sale of low-interest bonds. 

The lawsuit in the New Mexico Supreme Court argues that shareholders should bear more of the costs of closing the power plant instead of ratepayers, who currently will pay for the bonds through a non-bypassable charge on their bills. The bonds will be sold by Public Service Company of New Mexico, the primary owner of the San Juan Generating Station, and will use $360 million of bonds to refinance past investments into the power plant and about $20 million of that money will be used to assist the communities impacted by the closure. 

Jason Sandel, a convener for the ETA committee, said there will be a meeting this summer to discuss the proposed projects. A full list of projects submitted for funding consideration and details about each of the projects can be found at dws.nm.state.us/ETA.

climate change

Guv quietly looks to expand export markets for natural gas

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In July 2020, Gov.  Michelle Lujan Grisham signed onto a letter of support for a natural gas export facility being proposed in Baja California, Mexico. The letter, which was addressed to Mexico’s Energy Secretary Nahle Garcia, touted the facility as a potential “major North American west coast energy export hub” of natural gas to Asian Markets. 

“Energy demand is soaring in Asia, led by China, Japan, South Korea, Taiwan and India due to manufacturing and economic growth,” the letter reads. “All of these countries are using natural gas as a way to decrease their greenhouse gas emissions.”

The letter was signed by two other governors and the chairman of the Ute tribe in Colorado, on behalf of the Western States and Tribal Nations Natural Gas Initiative (WSTN). New Mexico joined the group in late 2019, with little media attention, when the state’s Energy, Minerals and Natural Resources Department (EMNRD) signed a Memorandum of Understanding with WSTN. A few months after sending the letter, the facility was approved by Mexico’s regulators and Baja California joined WTSN.

Environmental Project

With record methane emissions in Permian Basin, questions linger about necessity of the Double E pipeline

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Federal regulators are in the midst of an application process for a proposed 135-mile pipeline that would transport natural gas from Eddy County to Waha, Texas. But with oil and gas prices low, renewables on the rise, and a growing methane emissions problem in the Permian Basin, critics argue building a new pipeline in today’s environment is a step in the wrong direction. 

Summit Midstream, the project developer, proposed the pipeline in 2018, when oil production in the Permian Basin was booming. Exxon Mobil acquired about 30 percent ownership of the project, while XTO Energy, which is owned by Exxon Mobil, signed on as an anchor tenant to use the majority of the pipeline’s capacity. In March, the Federal Energy Regulatory Commission (FERC) gave the project its first big greenlight when it released a draft environmental assessment that found it would have little impact on the surrounding environment and communities. 

The proposed route of the Double E pipeline. Source: Double E Pipeline

While proponents of the pipeline say it will help alleviate some of the excessive venting and flaring of natural gas that comes up with the oil in the Permian Basin, critics argue FERC failed to consider the cumulative climate impacts of the project, particularly the impact of increased methane emissions both in the Permian Basin, where the natural gas is produced, and in the “downstream” market when that natural gas is combusted. 

XTO Energy flares about 5 percent of its production, and is responsible for roughly 10 percent of statewide flaring, according to research conducted by Tom Singer, senior policy advisor at the Western Environmental Law Center (WELC).

Energy Transition Act

Natural gas will play a big role in state’s energy transition

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We are one year into the Energy Transition Act, and utilities across the state are now charting their courses towards carbon-free generation. The goal is to meet demand for electricity with 100 percent “zero-carbon” sources by 2045 for investor-owned utilities and 2050 for electric cooperatives. Renewable energy is now cost-competitive with other sources of power generation like coal and nuclear; and investments in renewable energy projects have steadily grown in New Mexico, which is rich in both wind and sun. But renewables don’t produce energy as reliably as coal, and utilities say that poses a big problem for delivering electricity to customers when the wind isn’t blowing, or the sun isn’t shining. So, they’ve turned to natural gas to supplement power needs while bringing more renewables online, touting it as a crucial stepping stone in the transition to renewables.

Quick Reads

Feds continue environmental rollbacks with new methane emissions rule

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SANTA FE, N.M. – Conservation groups are slamming a move by the Trump administration to weaken rules on methane emissions from oil and gas operations. The new rule, proposed on Tuesday, would allow companies to inspect their lines for leaks less often, and take longer to fix issues that arise. Industry has long claimed the Obama-era rules are too expensive and burdensome. However, Matt Watson, associate vice president of the Environmental Defense Fund’s Energy Program, said methane is an extremely potent greenhouse gas that merits a strong federal standard. “Over 20 years, it’s more than 80 times more powerful than C02 [carbon dioxide] at trapping heat.

NM Legislature

Dems back methane capture rules

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Some New Mexico Democrats gathered Monday to express support for regulations to limit methane emissions from natural gas flaring and leaks, even as congressional Republicans are planning to repeal the rule on a federal level. Speaker of the House Brian Egolf, D-Santa Fe, called such a proposal a “triple win,” saying it would help businesses waste less methane that they could instead sell, cut  pollution and benefit  the state budget. The Santa Fe Democrat said that other states, like Colorado and Wyoming were already seeing benefits from methane capture rules. Rep. Georgene Louis, D-Albuquerque, noted that under questioning by U.S. Sen. Tom Udall of New Mexico, “the American Petroleum Institute was unable to provide senators with a single shred of data that found smart methane regulations had any negative impacts on oil and gas jobs.”

State Sen. Benny Shendo, D-Jemez Pueblo, echoed the two Representatives and brought up health impacts of natural gas leaks. “When I go visit my constituents at the various chapters of the Navajo communities, what they have to live with, not only the flaring, but the smell and the things you can’t see that impact their lives and that’s important for us to realize and understand the environment,” Shendo said.

Community Voices

Oil industry downplays revenue lost to natural gas waste

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Chris Saeger is the director of the Western Values Project. In a recent Farmington Daily Times story, Wally Drangmeister of the New Mexico Oil and Gas Association tried to downplay how many millions of dollars in tax revenue his members were costing the State of New Mexico by inferring it’s slightly fewer millions of dollars. According to our 2014 Western Values Project Up in Flames report, American taxpayers will lose upwards of $800 million in oil and gas royalty revenue due to wasted natural gas from venting and flaring alone on public lands. Our report is likely conservative because we did not include leaky equipment and pipelines – another major source of natural gas waste. Our projections were based on a cost of $4.24 per Mcf (thousand cubic feet) of natural gas because that was the cost estimate the U.S. Energy Information Administration was using for its forecasting at the time.

Oil & Gas

The business case for stopping methane emissions comes to NM

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One push for cutting methane emissions isn’t citing the latest warnings by scientists over melting polar caps or increased wildfires; instead it is appealing directly to the checkbook. On Tuesday morning, the Center for Methane Emissions Solutions held a Business Roundtable at the Albuquerque Country Club. The small audience gathered to hear the business argument for plugging methane leaks. Patrick Von Bargen is the executive director of the Center for Methane Emissions Solutions. He introduced three others in the growing methane emission mitigation industry.

Bureau of Land Management

Taxpayers group pushes to stop wasting natural gas

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FARMINGTON, N.M. – Venting and flaring at oil and natural gas wells on public lands in the Four Corners area costs the public millions in lost royalty revenue, and much more to corporations doing the extraction – not to mention releasing a major climate change contributor into the environment. Taxpayers for Common Sense, a nonprofit and nonpartisan group, says the technology exists to stop the practice. Buying advertising in the Santa Fe New Mexican and other publications this week, they’re calling for lawmakers to press the Bureau of Land Management (BLM) to pass a rule that ends the waste of taxpayer-owned natural gas on federal lands. Don Schreiber owns Devils’s Spring Ranch in the Four Corners area. “In that escape of natural gas, that is just throwing money away for the oil companies,” he says.

natural gas

Massive methane cloud prompts calls to curb natural gas waste

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A letter from four members of New Mexico’s congressional delegation supports stronger federal rules on wasted natural gas on public lands in light of a massive methane cloud over the Four Corners region. Senators Martin Heinrich and Tom Udall along with Representatives Ben Ray Luján and Michelle Lujan Grisham signed onto the letter to Office of Management and Budget Director Shaun Donovan want upcoming federal standards currently being discussed by the Bureau of Land Management and the Environmental Protection Agency to address natural gas waste. The Four Corners region is an area with a large amount of natural gas production in the state, including on federal and state lands. “Too much of New Mexico’s natural gas is being lost due to venting, flaring and leaks,” the letter says. “A NASA study has identified a methane hot spot the size of Delaware over the San Juan Basin—the highest concentration in the nation—in an area of high oil and gas production.”