San Juan Basin Gas Producer provided data to Feds that helped shape the revised ‘balanced’ rule

ROSWELL, NM -- Today, the U.S. Bureau of Land Management (BLM) released its revised Waste Prevention Rule which outlines a more sensible approach to oil and gas production while protecting the environment. 

“The revised BLM rule is a correction of the implausible 2016 Waste Prevention Rule,” said Jim Winchester, Executive Director of the Independent Petroleum Association of New Mexico. “The proposed 2016 rule was duplicative to other existing state and federal regulations, and would have decimated a large number of independent producers and wells in New Mexico.”

New Mexico oil and gas operators would have faced significant overhead costs and increased operational expenses to implement the rule proposed by the Obama administration in late 2016. The 2016 rule disproportionally targeted oil wells that produce less than 15 barrels of oil equivalent per day, which amounts to over 30,000 wells in New Mexico alone.

As part of IPANM’s efforts to support a revised BLM rule, one of IPANM’s San Juan Basin gas producers traveled to Washington, D.C., this past summer to provide data to federal policymakers that demonstrates the danger of over-regulation. The data demonstrated that the enormous costs for compliance under the proposed 2016 Waste Prevention Rule would have led to wells being plugged and abandoned prematurely. Data presented further demonstrated that the forced abandonment of just six lower-producing wells would result in a $151,000 royalty loss to New Mexico per year. It’s estimated that upwards of 15,000 producing wells across New Mexico could have been abandoned due to the enormous costs of the proposed 2016 rule.

“The premature abandonment of these wells not only impacts an independent producer’s business, it leaves oil and gas resources unrecovered, which results in a significant reduction in royalty revenues paid to the state and a loss of jobs in local communities,” said Winchester. “Millions of dollars that might otherwise be used for teacher salaries, textbooks and school buses in New Mexico would have simply disappeared due to a federal regulatory overreach.”

The collective estimated value of the unrecovered oil and gas resources, the premature abandonment of wells and the elimination of jobs due to the 2016 Waste Prevention Rule would have cost an estimated $112 million to New Mexico.  

Recent data also shows that technological advances by industry have already decreased methane emissions despite a significant increase in oil and gas production in recent years. According to the EPA, methane emissions in the San Juan Basin have fallen by 47% from 2011-2016. Methane emissions in the Permian Basin have fallen by 6% over the same period of time.