New Mexico Shows Its Environmental Guts Against the Usual Suspects

by Laura Paskus, THE NEW MEXICO INDEPENDENT, August 16, 2010

On Monday, the New Mexico Environment Improvement Board began hearing testimony from experts, citizens and industry concerning a rule change that may allow the New Mexico to reduce greenhouse gas emissions from power plants and the oil and gas industry.

Since 2004, the nonprofit New Energy Economy has been working on projects related to climate change and clean energy job development in New Mexico. In December 2008, the organization, along with the New Mexico Environmental Law Center, filed a petition asking that state’s Environmental Improvement Board (EIB) to set a cap on greenhouse gas emissions.

“About two years ago, we began to look at what was happening in Congress around federal climate policy, and we were concerned that nothing was being done,” New Energy Economy’s president, John Fogarty, told The Independent. “Concerned that nothing would be done on the federal level, we felt strongly that the states needed to step up where Congress was not.”

If approved by the Environmental Improvement Board, the five-page petition would allow the state to set a cap on greenhouse gas emissions in New Mexico. If adopted, the new rule would affect coal and natural gas power plants, as well as oil and gas facilities (refineries, processing and treatment plants, and compressor stations) that emit more than 25,000 metric tons each year of carbon dioxide. Those facilities would be required to reduce their emissions of greenhouse gases by 3 percent per year from 2010 levels. The program would begin in 2012, and be lifted once new state or federal rules were adopted.

The rule would also be re-examined in 2014 to ensure it was actually accomplishing emissions reductions and also not placing an undue economic burden on industry or the state.

According to Fogarty, there is proven technology—particularly in the oil and gas industry—that will not only cut emissions affecting planetary climate change, but are also cost-effective. For instance, compressor stations currently leak methane; those stations could be upgraded. Additionally, well operators could end the practice of venting methane. Instead of sending that greenhouse gas into the atmosphere, it could instead be captured and sold. Not only would such measures reduce emissions, but retrofitting equipment would create jobs, said Fogarty.

“Historically, if you look back at New Mexico and Colorado, both started implementing more and better rules to protect public health,” he said. “In New Mexico and Colorado, [opponents of the rules] said producers would leave the state—but both have had record applications for drilling since those rules were implemented.”

Last week, the NASA Goddard Institute for Space Studies released a report showing that mean global surface temperatures reached a new record high in 2010. And experts point to the impact of climate change everywhere, from drought and fire in northern Russia, to floods in Pakistan, to a 100-square-mile chunk of an iceberg that recently broke away from Greenland.

“These are precisely the types of changes scientists have been predicting for decades, and they’re happening right now,” Fogarty told The Independent. “We need an all hands on deck approach to this.”

The move has been challenged by electrical utilities and the oil and gas industry. In fact, a coalition opposed to the proposed regulation sued to stop the petition process, saying the EIB lacks the authority to create such a program. That coalition consisted of four New Mexico legislators and representatives of the oil and gas industry, dairy industry, Farm and Livestock Bureau, New Mexico Rural Electric Cooperative Association and the state’s public utilities, including Public Service Company of New Mexico (PNM).

Although Judge William Shoobridge in New Mexico’s Fifth Judicial District Court ruled in favor of the coalition in April, New Energy Economy appealed the decision to the state Supreme Court. And in June, in a unanimous decision, the Justices overruled Shoobridge and reinstated the petition before the EIB.

The hearing began Monday at the PERA building and are expected to continue through the week.

Greenhouse gas cap is a ’selfish, uncaring act,’ oil and gas industry rep says

New Mexico is a rural state, with fewer than two million people, says Deborah Seligman, the New Mexico Oil and Gas Association’s vice president of governmental affairs. “To ask the residents of this state to carry the burden of a greenhouse gas emissions reductions program is anything but praise-worthy,” she says. “Personally, what I feel about this is it’s a very selfish, uncaring act on the part of the petitioners and the proponents of a greenhouse gas cap for the state of New Mexico.”

Seligman pointed out that the oil and gas industry accounts for between 15,000 and 23,000 jobs in the state, and in 2008, paid 27 percent of the state’s total taxes into the general fund. According to her, if the new rule is adopted, it will cause significant harm within the state of New Mexico.

By implementing its own rules, New Mexico is putting itself at a disadvantage with neighboring states. New Mexico shares its two largest producing fields—the San Juan Basin and the Permian Basin—with Colorado and Texas, respectively. According to Seligman, producers will simply tap into the basins from those neighboring states.

“When you have a program like that go into place, our producers look at New Mexico and they say, ‘You know what? It’s getting pretty hard to do business, this is not a business-friendly state, so I’m going to drill the Permian in Texas, or I’m going to move my drilling program into the San Juan Basin, Colorado,’” she said. “That’s going to maybe meet the first 3 percent reduction—if it’s not there, you don’t have to cut back on it—but to meet the next 3 percent, you’re going to have to start shutting wells.”

A federal program would level the playing field, said Seligman. “Of course, we’re going to tackle a federal program when it comes up,” she said. “But we’ll tackle it to make sure it’s reasonable and takes into a account the energy needs that are growing through the United States.”

State’s plans are pending

Meanwhile, New Mexico’s Environment Department has submitted its own petition to the Environmental Improvement Board. The state’s plan is a regional cap and trade program. It would set an overall cap on emissions, then create allowances or credits that polluters can buy, sell or trade.  To begin with, the program establishes the initial number of allowances based on actual emissions; each year, the cap is decreased.

In 2005 Governor Bill Richardson ordered the state to lower its greenhouse gas emissions—such as carbon dioxide, but including also methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride —to meet 2000 levels by 2012, 10 percent below 2000 levels by 2020 and 75 percent below 2000 levels by 2050.

The following year, the state released a report detailing the potential impacts of climate change, which included water shortages, catastrophic wildfires, diebacks in alpine forests and increased air pollution. [Read rest of story]