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May/June 2024

Air pollution and the evolving world of enforcement for oil and gas operations in New Mexico

Bruce C Baizel


  • Over the past five years, joint federal/state enforcement efforts on emissions reductions and new state regulations have occurred.
  • Leaks and emission generally from oil and gas facilities in the Permian basin have not significantly decreased.
  • New Mexico is exploring the use of remote sensing technologies in its compliance work to significantly decrease those emissions.
Air pollution and the evolving world of enforcement for oil and gas operations in New Mexico
Daniel A. Leifheit via Getty Image

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New Mexico is the second-largest oil producing state and shares borders with other oil- and gas-producing states, including Texas, the largest oil-producing state in the United States. In New Mexico alone, there are 1,613 permitted oil and gas facilities and 54,887 completed oil and gas wells. According to the U.S. Environmental Protection Agency (EPA), methane emissions from the upstream oil and gas sector represent a significant portion of the U.S. greenhouse gas (GHG) emissions profile. New Mexico’s own emissions inventory estimates that emissions from the sector make up 53 percent of the state’s GHG emissions and 64 percent of the total state-wide methane emissions. Upstream oil and gas activities also generate pollution that can form ground-level ozone. Controlling pollution from this sector, then, also protects local air quality.

New Mexico’s regulatory framework

In 1978, New Mexico’s Environmental Improvement Act created the New Mexico Environmental Improvement Board (EIB) to promulgate regulations to 1. attain and maintain national ambient air quality standards (NAAQS) and 2. prevent or abate air pollution. The New Mexico Environment Department (NMED) is delegated the power under the same act to enforce such regulations.

Most of New Mexico is in attainment with the ozone air quality standard, but seven counties now exceed 95 percent of the standard, meaning they are at risk of tipping into non-attainment.

The EIB recently adopted an Oil and Gas Sector Ozone Precursor Pollutants Rule, in part to address this worrying trend. This rule sets emission standards and imposes requirements on oil and gas owners or operators to install and/or replace certain types of technology and controls. The objective is the reduction in emissions of ozone precursor pollutants—volatile organic compounds (VOCs) and oxides of nitrogen (NOx)— from sources located at well sites, tank batteries, compressor stations, and natural gas processing plants. The same technology and controls at upstream oil and gas sources will capture fugitive methane emissions as a co-benefit. Owners or operators are required to report actions taken to comply with rule requirements and to report leak detection results and other data. NMED is authorized to enforce the rule through agency monitoring, including inspections, and by using credible information provided by a third party. This “credible evidence” provision plays into current efforts by NMED to explore the use of satellite-generated emissions data, discussed below.

NMED’s sister agency, the Oil Conservation Division (OCD) of the New Mexico Energy, Minerals and Natural Resources Department, is authorized under the state Oil and Gas Act to manage the conservation of oil and gas. OCD is authorized to regulate the exploration, development, production, or storage of oil and gas and to limit the waste of CH4 (methane) by venting and flaring.

The EPA has authorized NMED to accept delegation of authority to implement federal air quality programs specific to upstream oil and gas operations. The state’s Air Quality Bureau, within NMED, determines compliance or noncompliance with air quality regulations and permit conditions by evaluating areas of concern identified in facility inspection reports, compliance reporting submittals for state and federal air regulations, complaint findings, excess emission evaluations, and facility self-reporting.

The challenge of compliance

The EPA, in conjunction with NMED, has conducted helicopter flyovers of the Permian and San Juan Basins—New Mexico’s major producing basins—for the past several years, using forward-looking infrared (FLIR) technology to determine emissions trends in oil and gas operations. The video data collected during the flyovers document higher-than-expected leak rates from oil and gas equipment across both basins.

Leaks, which include methane, VOCs, and other air pollutants, were observed from a variety of oil and gas equipment, but particularly from storage tanks and flares. In 2020, the Permian Basin’s overall leak rate was 5 percent, an increase from a 2 percent leak rate observed during 2019 flyovers of the same area. In the San Juan Basin in northwest New Mexico, the leak rate was approximately 3 percent. The San Juan Basin was not included in 2019 flyover inspections. The emissions, which mostly result from equipment failures and unaddressed leaks, are significantly higher than those reported by industry and are in line with those identified by non-governmental organizations and academia. The findings were particularly disappointing in that they come after 18 months of intensive and ongoing stakeholder discussions with the oil and natural gas industry on reducing VOC and methane emissions.

Results of EPA/NMED 2020 flyover

Permian Basin

San Juan Basin

9,100 storage tanks observed

1,080 storage tanks observed

505 leaking methane and VOCs

61 leaking methane and VOCs

1,400 flares observed

63 flares observed

58 unlit and emitting methane and VOCs

2 unlit and emitting methane and VOCs

More recently, from July 2022 through July 2023, NMED found a 50 percent compliance rate for air quality emissions requirements, mainly for oil and gas permitted facilities. However, as of March 2024, only about one-third of oil and gas facilities in New Mexico’s portion of the Permian Basin are under consent decrees related to addressing noncompliance specific to emissions violations.

New tools on the horizon

The EPA’s air regulations for the upstream oil and gas sector have also primarily focused on VOCs. However, new federal rules poised to go into effect in May 2024 will directly target methane emissions from these sources. Several innovative compliance approaches under these rules can be used to monitor sources effectively and efficiently for compliance, while supplementing the strained resources of state agencies. Under EPA’s rules, remote sensing technologies may allow owners and operators to comply with the monitoring requirements more effectively at well pads, without impacting the accuracy of the compliance determination. Meanwhile, under the new Super-Emitter Program, EPA will certify third-party data providers to share remote sensing information about large methane plumes, which EPA will verify and send to owners and operators for a response.

In addition, innovative remote sensing technologies to monitor fugitive and large emission events—including aerial, vehicle-based, satellite, and continuous monitoring—continue to evolve. NMED has been exploring potential partnerships with several satellite operators and data analytics experts, to have consistent access to regional and facility-specific emissions data. When combined with vehicle-based monitoring and targeted inspections, New Mexico believes it will be able to significantly increase the compliance rate and reduce the volume of methane and other pollutants emitted from oil and gas facilities in the state.