COMMENTARY: The oil and gas industry is the largest industrial source of methane emissions in the United States. And depending on the price of natural gas on any given day, it is estimated that the industry wastes between $1.8 and $2 billion of this primary component of natural gas each year — through intentional venting and flaring and unintentional leaks.
New Mexico oil and gas companies alone emit 570,000 tons of methane each year, resulting in more than $200 million in wasted natural gas, and a $27 million loss in taxpayer and royalty revenues each year.
Innovation drives efficiency, cost savings and a general better way of doing things across the economy. The same is true in oil and gas, where simple and cost-effective solutions can result in monetizing what is otherwise lost into the atmosphere. For example, more often than not, there are simple fixes to methane leaks that pay for themselves in a surprisingly short period of time.
Earlier this month, I participated in a series of round-table discussions hosted by the Center for Methane Emissions Solutions about the business potential and growth in New Mexico’s methane mitigation industry. This bourgeoning sector already accounts for high-paying jobs in the state. I was encouraged by the words of our moderator at the Albuquerque round table — the economic director for the City of Albuquerque, Synthia Jaramillo — that many observers are eager to looking at the sector more deeply.
The methane mitigation industry boasts an impressive list of more than 30 job types. After surveying dozens of companies, Datu Research found that median hourly wage for jobs in methane mitigation has passed $30 per hour, more than 50 percent higher than the national average. Colorado and Wyoming top the list – states that have enacted policies to reduce methane emissions and enjoy job growth as a result.
That same research found that sales growth for leak detection and repair services have trended upwards of 30 percent in states with methane regulation – including Colorado, Wyoming, Ohio and California.
Consider Colorado’s adoption of Regulation 7 four years ago. This groundbreaking rule benefitted from input and support from some of the state’s top oil and gas producers. Since that adoption, Colorado’s natural gas production is up, and methane leaks are down 75 percent in the state’s largest oil field. These rules also helped create more maintenance jobs, and earlier this year the state’s two largest oil and gas trade associations supported a rule to strengthen standards.
Unfortunately, we see Washington, D.C. taking a step backwards. Right now, Interior Secretary Ryan Zinke is proposing a wholesale rollback of the BLM Methane and Waste Prevention Rule, perhaps without any public hearings in the West, making input from key stakeholders less effective. Such moves are out-of-step with where state policy and energy markets are heading.
Thankfully, a few operators within New Mexico are beacons of where the oil and gas industry should be heading. These include XTO Energy, a subsidiary of ExxonMobil, which made areal commitment to reducing methane waste and to meeting the standards set forth in the U.S. EPA and BLM methane rules. I applaud XTO Energy and other companies that are making the initial investment to do better by the people of New Mexico and to be responsible, long-term stewards of New Mexico’s finite resources.
New Mexico just jumped up to become the third largest producer of crude oil in the country. The new oil and gas boom is here. It is critical that New Mexico take full advantage of every opportunity to make the most of it by capturing wasted methane and putting it to work to power New Mexico’s economy.
Patrick Von Bargen is the executive director of the Center for Methane Emissions Solutions, a business coalition representing the interests of companies in the methane mitigation industry. Von Bargen also served as chief of staff to U.S. Sen. Jeff Bingaman, D-N.M., from 1989 to 2000. Agree with his opinion? Disagree? NMPolitics.net welcomes your views. Learn about submitting your own commentary here.
This BBSNews article originally appeared on NMPolitics.net.