ALBUQUERQUE, N.M. (KRQE) – The oil and gas industry pays for everything from public education to recent tax rebates in New Mexico. But data shows it’s also our state’s largest emitter of greenhouse gasses. With recent federal, state, and local pushes to limit global warming, can the state balance the economic benefit of the industry with the environmental costs?
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“New Mexico is producing over a million barrels of oil a day,” says Rep. Larry Scott, from Lea County. He’s on the state’s House Energy, Environment & Natural Resources committee.
“You may not know that 9%, approximately, of the gross value of every barrel of oil or every MCF [thousand cubic feet] of gas goes directly into state coffers,” he says. As a result around 40% of the state’s budget comes from the industry. On top of that, the industry supports over 100,000 high-paying jobs, Scott says.
But, other state leaders say we need to move away from the industry. Among those are Rep. Debra M. Sariñana, from Bernalillo County. She’s also on the House Energy, Environment & Natural Resources committee.
“We are trying to get away from gas and oil,” Sariñana says. “We know how bad they are as far as environmentally.” She says that the state has a responsibility to clean up the industry.
The global picture: 6th IPCC report
The latest global report on climate change shows that greenhouse gas emissions in the last decade were the highest they’ve ever been in human history. Changing that requires rapid shifts in the energy sector, the report says. So where does New Mexico’s greatest-greenhouse-gas-emitting sector — the oil and gas industry — stand?
Every six or seven years, an international collaboration of scientists — called the Intergovernmental Panel on Climate Change — puts together a massive report about climate change, a massive issue communities across the globe are increasingly dealing with. The latest report warns that without immediate reductions in emissions, global temperatures are likely to rise beyond 1.5 degrees Celsius, a key milepost scientists have chosen. That temperature threshold, more than 10% of the global population could be exposed to severe heatwaves at least once every five years and coral reefs are likely to decline by at least 70%, among other impacts, according to the National Aeronautics and Space Administration.
“Without immediate and deep emissions reductions across all sectors, limiting global warming to 1.5°C is beyond reach,” the April 4, 2022 press release for the report says. “Limiting global warming will require major transitions in the energy sector. This will involve a substantial reduction in fossil fuel use, widespread electrification, improved energy efficiency, and use of alternative fuels (such as hydrogen).”
What does that mean for New Mexico, one of the top three oil-producing states? To find out, KRQE News 13 spoke with climate and policy experts.
New Mexico’s “double-edged sword”
It seems to seep into every crack in some parts of New Mexico. It’s sometimes measured in drips and drops. Other times, it seems like a flood. Perhaps you think we’re talking about oil — but really, it’s the money that New Mexico earns from oil and gas. That money seemingly touches at least one facet of most average New Mexicans lives, whether it’s via government services, schools, or even direct cash payments.
Nearly two million New Mexicans are likely to receive between $500 and $1,500 in tax rebates in the next five months. Much of that money is likely coming from taxes on the oil and gas industry, according to a Legislative Finance Committee report. And the school you send your kid to might have received money from oil and gas taxes. In Bernalillo County alone, $281,900,000 worth of oil and gas funding went to k-12 schools, according to the New Mexico Oil and Gas Association (NMOGA).
Overall, oil and gas funds an average of one-third of the entire state’s budget each year, according to the most recent NMOGA report. That’s about $3 billion each year. And it’s been that way since fiscal year 2014, according to NMOGA.
“So much of the resources that New Mexico has come from oil and gas,” explains Miriam Gay-Antaki, an assistant professor in the University of New Mexico’s Department of Geography and Environmental Studies. “It’s kind of this double-edged sword because it’s like, [the state] needs that resource and that money.”
The catch: The majority of New Mexico’s climate-altering greenhouse gas emissions come from the oil and gas industry. Those emissions include both emissions from the burning or combustion of oil and gas, and so-called “fugitive emissions.”
In 2018 alone, fugitive emissions — i.e. methane and other gas that leaks from pipes, valves, etc. — from New Mexico’s oil and gas industry totaled an estimated 32.7 million metric tons of carbon dioxide equivalent. That’s according to a 2020 report by Energy and Environmental Economics, Inc. done for the Center for the New Energy Economy at Colorado State University.
That’s more than all the emissions for New Mexico’s entire transportation sector in 2018 — including motor vehicle gasoline emissions, jet fuel emissions, and diesel fuel emissions, which amounted to 15.8 million metric tons of carbon dioxide equivalent, according to the same Energy and Environmental Economics, Inc. report. In other words, the fugitive emissions from oil and gas alone (not to mention emissions from combustion) are roughly double the total emissions from every single vehicle on the road in New Mexico.
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This visualization aims to show the relative “fugitive emissions” created by the New Mexico oil and gas industry compared to the emissions from all vehicles in New Mexico per day. Each balloon represents one cubic foot worth of carbon dioxide. The balloons show average emissions per oil operation compared to the average emissions per vehicle.
Emissions from the oil and gas industry (pink balloons) are shown as the total statewide per-day fugitive emissions (2018) divided by the number of oil wells in the state. Emissions from vehicles (blue balloons) are shown as the total per-day transportation emissions (2018) divided by the number of registered vehicles in the state (2017).
Granted, the exact number of emissions can vary quite a bit depending on oil and gas production numbers, according to the 2020 report. After all, when fewer oil wells are producing, there are less emissions.
But the latest data shows that New Mexico’s production of crude oil has more or less risen exponentially in the past few decades. In 2010, New Mexico produced 67.2 million barrels of crude oil, according to the U.S. Energy Information Administration. In 2021, the state produced 459.8 million barrels — an increase of more than 500% from 2010 production.
New Mexico oil companies say they’re cognizant of the climate impacts of the industry. EOG Resources, Inc., the largest oil producer in the state according to NMOGA, announced in 2021 that they are aiming to be a net-zero emitter by 2040. But the company also says they believe the oil industry is likely here to stay.
“We believe oil and natural gas will remain an essential source of long-term global energy supply with demand gravitating toward the most efficient producers – the most efficient from a capital perspective and the most efficient from an emissions perspective,” CEO Ezra Y. Yacob wrote in an annual report. “At EOG, we are focused on differentiating ourselves as among the most efficient on both counts.”
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Interactive: New Mexico’s crude oil production has been on the rise. Data from: EIA.
A 2021 financial sheet from the company does show that they’ve decreased their methane emissions over the past few years. In 2017, they emitted 0.004 thousand cubic feet of gross operated methane emissions per every thousand cubic feet of U.S. gas production they operate, the document shows. By 2020, methane emissions had decreased to 0.0008 thousand cubic feet per thousand cubic feet of gas production — an 80% decrease.
KRQE News 13 reached out to the New Mexico Oil and Gas Association to ask producers if they feel the industry has made improvements in emissions reductions. As of May 17, 2022, they did not respond to the emailed questions. KRQE News 13 also reached out to EOG Resources, Inc. directly, but they did not grant us an interview.
Industry supporters say that the industry can self-regulate. Larry Behrens is a regional director for Power the Future, a non-profit Behrens describes as advocating for American energy and energy workers in New Mexico. He says that oil and gas workers are among the most environmentally conscious people in New Mexico.
“Energy workers, who do their job in New Mexico — their children breathe that air. Their families drink that water,” he says. “They care more about New Mexico’s environment than anybody else because they live in the areas where they are producing this critical resource for our state.”
But some say letting oil and gas companies self-regulate isn’t enough
“We cannot trust them to regulate themselves,” says Tom Solomon. He’s a co-coordinator of the New Mexico chapter of 350.org, an organization he describes as focusing on preserving a livable climate. “It’s very easy to write words on an investor presentation and claim that you’re doing something. But when you look at what they’re actually doing, and what the atmosphere is actually seeing, the evidence is plain to see.”
He’s talking about the rate at which oil and gas companies have been releasing methane into New Mexico’s air. Methane is a greenhouse gas that traps heat in the atmosphere about 48 times better than carbon dioxide. And a recent study by researchers, including from Stanford University, found that methane releases in the Permian Basin of southeast New Mexico are relatively high.
The methane enters the air both intentionally and inadvertently. Operators might “vent” methane intentionally. Or the gas may simply leak through equipment designed to contain it. Either way, the latest research published in March 2022 suggests a significant amount of methane makes it into the atmosphere from New Mexico. The research, published in the academic journal Environmental Science & Technology, shows wells in southeast New Mexico released an estimated 192 metric tons of emissions per hour (give or take about 70 tons) between October 2018 and January 2020. The study concludes that some previous research was likely underestimating the region’s emissions.
Of course, none of the above mentioned environmental concerns are entirely new. Around the world, researchers have been talking about these issues for decades. At times, New Mexico’s state leadership has taken some steps towards reducing emissions from the oil and gas industry.
In 2019, Governor Michelle Lujan Grisham issued Executive Order 2019-003, which set the goal of reducing statewide greenhouse gas emission by 45% by 2030. The baseline for that goal was the statewide 2005 greenhouse gas level, meaning New Mexico has to emit no more than 34.02 million metric tons of CO2-equivalent gasses by 2030, according to estimates from the 2020 report by Energy and Environmental Economics, Inc. report.
In the 2019 executive order, the Governor set out multiple mandates in efforts to reach her goal for the state. She also asked for a Climate Change Task Force. The task force was asked to develop statewide strategy and policies on:
- A “comprehensive market-based program that sets emission limits”
- Policy that would reduce emissions from light-duty vehicles sold within the state
- New building codes
- Collaboration with the Renewable Energy Transmission Authority to build out the state’s ability to transmit renewable energy from one place to another
- Create a statewide, enforceable policy to reduce oil and gas methane emissions.
The state’s Environmental Department (NMED) and the state’s Energy and Mineral Resource Department were supposed to enact that last bullet point “as soon as practicable.”
That was in 2019. More than three-years later, on April 14, 2022, the state finalized a set of emissions rules for the oil and gas industry.
“It’s the most impactful environmental rule that has probably ever been issued by the [Environmental Improvement] board and impacts more [emission] sources than any other quality regulation,” says Liz Bisbey-Kuehn, NMED air quality bureau chief.
The rules focus on emissions that lead to ozone buildup in the air. But they also address methane.
“The new rule will reduce harmful emissions of ozone precursor pollutants — volatile organic compounds and oxides of nitrogen — by approximately 260 million pounds annually,” NMED said in a press release about the new rules. “And [the new rules] will have the co-benefit of reducing methane emissions by over 851 million pounds annually.”
By those numbers, in the two and a half years it took to establish the methane rules, an estimated 2 billion pounds of methane went into the atmosphere while the public and industry representatives gave feedback on the rules. That’s roughly equivalent to 81 million metric tons of CO2-equivalent emissions — or more than half a million hot air balloons filled with methane.
Bisbey-Kuehn from the Environment Department says that part of the reason it took several years to develop rules was that the department needed to hear from stakeholders.
“Stakeholder engagement was a pivotal part of this entire process,” Bisbey-Kuehn says. And as a result of the engagement, she says the oil and gas industry is generally supportive of the new rules.
The rules still need to be published in the state’s register before they go into effect. Bisbey-Kuehn estimates that could happen in the next few weeks or months. Once they do go into effect, the Environment Department has the authority to issue fines — up to $15,000 per day.
Is the industry here to stay?
When setting policy to guide the future, New Mexico’s politicians have to consider both the energy-production that comes with oil and gas along with the economic boost it gives. Rep. Larry Scott say’s the benefits are hard to beat.
“There is simply no substitute,” when it comes to the income and jobs oil and gas create, Scott says. “And I don’t see one in the foreseeable future.”
But Rep. Sariñana says that at some point, the environmental costs simply outweigh those monetary benefits.
“There’s gotta be a point where the world is more important. Our future is more important. Our grandkids are more important,” she says. “But I guess some industries haven’t reached that point.”
And she adds that both pro-oil lobbying and a lack of energy alternatives means an alternative energy industry hasn’t been able to take off in New Mexico. So oil and gas have a strong grip on New Mexico.
“Our planet’s not gonna last that long if we don’t replace it with something. It’s just ‘how?’ Right now we’re still trying to get our wind and solar going. I mean, they’re doing great, but we need to expand on that and at some point, tax it but not right now. We still need to get the industry in and going,” she says. “we’re trying to but the oil industry is very powerful.”
Patrick Cummins, a senior policy advisor at the Center for the New Energy Economy at Colorado State University, says that New Mexico has made progress in stepping away from fossil fuels including oil and gas.
“Over the last three years, both the state Legislature and the administration in New Mexico have really demonstrated tremendous leadership — I mean, the Energy Transition Act [which helps fund the shutdown of old power plants] and the electric power sector, and the coal plants are shutting down. And a lot of that is being done cooperatively with the industry,” Cummins says. “I give New Mexico an ‘A+’ for their efforts, both in terms of what they have actually done, which is very significant, and what they’re continuing to work on.”