Economic analysis shows wide range of net benefits from strong rules
(SANTA FE, N.M.) Today Environmental Defense Fund released the findings of a report conducted by Synapse Energy Economics, a leading consulting firm specializing in energy, economic and environmental analysis, on the cost effectiveness of measures to curb oil and gas methane emissions in New Mexico. The study shows that comprehensive oil and gas emission reduction rules, such as those recommended by EDF, can deliver vast social and environmental benefit to the state’s residents at little cost to the state’s oil and gas operators.
Methane is both a powerful greenhouse gas over 80 times more potent than CO2 over a 20-year timeframe and the primary ingredient of natural gas. Rules that incentivize its capture help the environment while ensuring more natural gas remains in the sales lines, rather than the atmosphere.
Recent estimates show New Mexico’s oil and gas operators emit over 1 million metric tons of methane annually, which has a near-term climate impact equivalent to 28 million automobiles and represents at least $275 million in lost energy resources. A suite of comprehensive, nationally-leading emissions reduction requirements, including quarterly leak detection inspections, no-bleed pneumatics and other measures, could lead to a 60% reduction in these emissions. Gov. Michelle Lujan Grisham’s administration has begun the process of developing rules to address this problem following the governor’s executive order directing state agencies to enact nationally-leading methane rules and reduce the state’s overall greenhouse gas emissions.
“Based on this analysis, we have determined that nationally-leading, comprehensive methane controls for New Mexico’s oil and gas industry are cost-effective across every set of benefits and costs we examined. This study illustrates that, even with a conservative estimate of the potential benefits and higher cost assumptions, comprehensive oil and gas emissions rules are cost-effective in New Mexico.”
“This report is yet another indication of the tremendous opportunity the Lujan Grisham administration has to dramatically reduce methane waste and pollution from New Mexico’s oil and gas industry. Nationally-leading, comprehensive and enforceable methane regulations make sense no matter how you cut it — economically as well as in terms of public health and New Mexico’s climate.”