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Inside The Debate Over Repealing Curbs On Methane Leaks

May 3, 2017
Originally published on May 10, 2017 2:15 pm

A deadline is fast approaching for Republican lawmakers who want to undo an Obama-era regulation that aims to limit the emissions of methane — a powerful greenhouse gas — from energy production sites on public lands.

The oil and gas industry is lobbying lawmakers to permanently repeal the rule, as it has other recent environmental regulations, using the Congressional Review Act — a legislative tool that not only undoes a regulation, but prevents the federal government from ever implementing a similar rule.

There's a catch, though: Lawmakers only have a set amount of time to use the act. And the deadline to repeal the Bureau of Land Management's methane rule is widely believed to be next week.

New Mexico rancher Don Schreiber is counting down the days.

Schreiber is an insurance salesman-turned-rancher, but these days he spends most of his time as an advocate for the BLM methane rule, trying to convince lawmakers of its importance. He and his wife live in the San Juan Basin, a resource-rich depression in the plains of northern New Mexico and southern Colorado that's at the heart of the methane debate. There are more than 23,000 active oil and gas wells in the San Juan Basin. Schreiber's ranch is surrounded by 122 of them.

"We're never out of sight of a well," Schreiber says, outside of his home. "We can often hear a well. And sadly, we can often smell a well."

The smell, he says, is like the paint section of a hardware store — gases that are venting or leaking off of well sites near his house. He calls it the smell of "wasted money."

The Interior Department says that between 2009 and 2015, enough natural gas was lost on public lands to supply about 6.2 million households with energy for a year. In money terms, the Government Accountability Office says as much as $23 million of potential royalty revenue is lost annually.

Some of that is excess or dirty natural gas, hydrocarbons that oil and gas companies can't sell or don't have the means to transport. The issue of slow pipeline permitting comes up a lot when talking to oil and gas producers in New Mexico. They say they'd like to transport the natural gas, but can't because the infrastructure isn't there.

Natural gas that can't be sold or transported is vented or burnt off in a process called flaring; other natural gas leaks from the pipes, storage tanks and other infrastructure that dot the landscape.

The Obama administration sought to address the emissions with the BLM's methane rule. It requires oil and gas companies on federal or tribal lands to look for leaks and fix them. It limits allowable venting and flaring and directs producers to capture the natural gas. And it requires that oil and gas producers gradually update well sites with modern technology.

The administration's reasons were twofold: For one, the rule would reduce waste of a natural resource being pulled from public lands.

The second: Methane, the chief component of natural gas, is a potent greenhouse gas. It can warm the atmosphere at nearly 30 times the rate of carbon dioxide. And scientists say the amount of it in Earth's atmosphere is increasing.

When she announced the rule in late 2016, then-Interior Secretary Sally Jewell said that federal efforts to limit methane emissions, "is good government, plain and simple."

The oil and gas industry felt differently. Western Energy Alliance has called the rule an executive overreach and redundant, because some states already had methane rules in effect. The American Petroleum Institute has made a repeal of the rule a top priority.

Tom Mullins, the president of the Independent Petroleum Association of New Mexico and the owner of a small Farmington-based oil and gas company, says the rule is unnecessary and unfairly targets operators like himself, who rely primarily on public lands.

Nearly 70 percent of the active wells in the San Juan Basin are on public lands, according to the Bureau of Land Management's Farmington District Office. In states like Texas and North Dakota, Mullins says, much of the oil and gas production happens on private lands, where the BLM rule would have no effect.

Mullins also believes that the rule is unnecessary because, he says, oil and gas producers already have an economic incentive to capture and sell "every molecule of methane we can. That's how we make our money."

Waste makes no more sense from a producer's side than it does a regulator's, Mullins says. That's why they fix leaks when they find them, he says, and replace older equipment with newer, more efficient pieces when it's time — not before. The new equipment, Mullins says, is expensive.

The Interior Department estimated that it would cost industry $279 million, at most, to implement the BLM methane rule. But with the price of oil hovering at about $50 a barrel, Mullins says, the math just doesn't add up.

He points to a pair of valve controllers in the training room of the San Juan School of Energy, a facility where new oil and gas workers can get hands-on experience with the equipment they'll see in the field. One of the valve controllers is older — the type you'd see on many of the wells in the San Juan Basin. The other is newer and would bleed less methane in the field.

"If it made economic sense for me to swap this out with the new one versus the old, I would do it because it would pay for itself, right? That would be the logical answer," he says. "But I'm telling you that it doesn't make economic sense for that to be done on these older wells."

Mullins is one of the many oil and gas producers lobbying Congress to repeal the BLM methane rule. He believes that regulation is best left to the states.

That doesn't sit well with some of his neighbors, though.

"Colorado already has a strong rule," says Gwen Lachelt, a commissioner of nearby La Plata County, Colo. "And we have a methane cloud the size of Delaware over our region."

Lachelt is referring to satellite image released in 2014 that shows a bright red methane hot spot over the Four Corners region, where Arizona, Colorado, New Mexico and Utah intersect. The photo is often brought up in the methane debate in the area. Supporters of the BLM methane rule use it as proof that the gas needs to be regulated. Detractors of the rule question the photo's accuracy or attribute high methane levels to natural seepage.

Either way, Lachelt says, the photo is a black eye on the region and she believes that methane emissions need to be dealt with. In her view, federal regulation is the most effective way to do it because Colorado's rule can only go so far. It doesn't apply to the Southern Ute Tribe, where many of southern Colorado's oil and gas wells are located. And it doesn't apply to New Mexico, where Gov. Susana Martinez has been urging federal lawmakers to undo the BLM methane rule.

"In the oil and gas industry, we call that pissing in the pool," says Wayne Warmack, another Coloradoan who worked in the oil and gas industry for 27 years. "For them to piss in the pool over there in New Mexico and make us swim in it here is not a good situation and does not make for good neighbors."

Warmack says he understands why the oil and gas industry is hesitant to support regulation. They've been burned before, finding out that a problem was bigger than expected. But, he says, requiring industry to capture methane makes sense.

Warmack is making his case to the public and his senator, Republican Cory Gardner. Gardner is one of a handful of senators who are still undecided on whether to vote for a repeal of the BLM methane rule using the Congressional Review Act, stalling the repeal process.

The Trump administration is preparing a backup plan, directing the Interior Department to review the rule, but that process is expected to take years.

Copyright 2017 NPR. To see more, visit http://www.npr.org/.

ROBERT SIEGEL, HOST:

The Trump administration and congressional Republicans have gotten rid of a lot of environmental rules that were put in place by President Obama. But there is one that they're having trouble undoing because they can't get enough votes in the Senate. It's the rule to limit emissions of methane from oil and gas sites on public lands. NPR's Nathan Rott went to New Mexico - the heart of the methane debate - to hear what's at stake.

NATHAN ROTT, BYLINE: To get anywhere around Don Schreiber's ranch, it's best to have a 4x4. He and his wife live in the Rocky high desert plains of northern New Mexico more than an hour from the nearest town. Schreiber is an insurance salesman turned rancher. But these days, he's mostly an activist because surrounding his ranch are oil and gas wells - 122 of them by his count.

So this is an older rig?

DON SCHREIBER: Well.

ROTT: Well.

It's a flattened out, bare piece of earth with pipes, storage tanks and pressure valves all painted a juniper green to blend into the surrounding scrub.

SCHREIBER: You smell it now, right?

ROTT: Just a whiff - like the paint section in a hardware store.

SCHREIBER: They call that the smell of money.

ROTT: The smell of money?

SCHREIBER: Which it is. In this case, wasted money.

ROTT: Wasted because one of the gases coming off of this site - one you can't smell - is methane. Methane is the main component of natural gas. You probably use it in your home to warm the hot water heater or to cook on the stove. And when it's captured, methane can be sold. Out here, Schreiber says, it's lost like water from a leaky faucet.

SCHREIBER: Here we go. Might get a little action.

ROTT: There's a noise from a nearby pressure valve and not long after - Schreiber says that's the sound of methane and other gases bleeding into the blue New Mexico sky. The Obama administration tried to curb this with a rule that aims to limit venting flaring and leaking of methane at energy production sites like this. It requires that some of the methane be captured.

For one, the administration said, it would prevent the loss of millions of dollars' worth of gas that otherwise disappears into the air. Second, methane is a potent greenhouse gas. It warms the atmosphere at about 30 times the rate carbon dioxide does, and the amount of it in Earth's atmosphere is increasing.

At the San Juan School of Energy in Farmington, N.M., you'll hear a different perspective.

TOM MULLINS: This is where, you know, we're leaking methane, right? Aren't we just leaking it on purpose?

ROTT: I sense a little bit of irony there.

Tom Mullins is the president of the Independent Petroleum Association of New Mexico and the owner of a small Farmington-based oil and gas company. And he says energy companies like his don't need a federal regulation requiring them to capture leaking gas because they already have an economic incentive to do so.

MULLINS: That's the overriding incentive on everything we do - making money.

ROTT: Mullins says that's why they fix leaks when they find them and replace older equipment with more efficient newer pieces when it's time. That new equipment, though, is expensive Mullins says. And many of the wells in this area are older and not producing all that much gas, so modernizing them now just doesn't financially add up.

MULLINS: If it made economic sense for me to swap this out with a new one versus the old one, I would do it because it would pay for itself, right? That would be the logical answer. But I'm telling you that it doesn't make economic sense for that to be done on these older wells.

ROTT: That's why Mullins and many other oil and gas operators and industry groups are pushing Congress and the Trump administration to do away with the Obama mandate. They think the rule will force the closure of older gas sites prematurely and that regulation is best left to the states. That doesn't sit well with Gwen Lachelt. She's the commissioner of La Plata County, Colo., just up the road from Farmington.

GWEN LACHELT: We have a methane cloud the size of the state of Delaware over our region.

ROTT: She's referencing a much-talked-about NASA photo that shows a methane hotspot over the region. Some people here think it's caused by natural sources more than oil and gas. But either way, Lachelt says, they need to deal with it. And she thinks a federal rule is the best way. Colorado already has a strong methane rule that was actually the model for the federal rule, but she doesn't expect New Mexico to follow suit anytime soon.

LACHELT: If we're just letting it go up into the air, we're not maximizing company's profits, we're not maximizing the return to the taxpayer, and we're being irresponsible in terms of pollution.

ROTT: That's the argument Lachelt is making to her Senator Republican Cory Gardner. He's one of a few senators who are still undecided about the rules future. Though, he doesn't have much time left to make up his mind. Congress faces a deadline in a few days to repeal the methane rule outright. If the Senate does not manage to overturn it, the Interior Department could aim to rewrite the rule but that process is long and would likely face litigation. Nathan Rott, NPR News, Farmington, N.M. Transcript provided by NPR, Copyright NPR.

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