American Oil and Gas Reporter - December 2019 - 89

ConventionCoverage: Permian Basin Petroleum Association

Panels Address Air, Water And Species
MIDLAND-Regulatory proposals and
industry efforts to curb emissions are
benefitting the oil and gas industry, but
members of the Permian Basin Petroleum
Association and others must continue to
fend off moves to restrict the industry
through the federal Endangered Species
Act, panelists said at PBPA's annual meeting, Oct. 23-24.
Proposed amendments to federal
methane emission regulations are expected
to save the oil and gas industry $17 million-$19 million a year, or $97 million$123 million through 2025, Ken McQueen,
administrator for the U.S. Environmental
Protection Agency's Region 6, told PBPA
during a panel discussion on energy and
the environment.
The process of revising New Source
Performance Standards for methane under
Clean Air Act Subparts OOOO and
OOOOa grew out of an executive order
designed to promote energy independence
and economic growth by mandating federal
agencies review regulations that potentially
burdened development or use of domestic
oil and gas and other resources, McQueen
explained.
On Sept. 24, the EPA published proposed amendments that would rescind
methane emission limits for all segments
of the industry, McQueen said. Under the
proposal, EPA would continue to regulate
volatile organic compounds in the production and processing segments, but not
in the transmission and storage segments,
he said (see "EPA Pulls Plug On 2016
Methane Rule," AOGR, October 2019).
Water Management
EPA also is looking into produced
water, McQueen said. States within Region
6 include Texas and New Mexico, which
together are producing about 50% of U.S.
oil. He noted that New Mexico produced
four-five barrels of water for each barrel
of oil.
"What I hope to do is start the discussion
on ways to take advantage of this large
amount of water being produced across
the Permian Basin by looking for beneficial
uses for the water," McQueen said.
PBPA Chairman Kyle McGraw, who
moderated the panel discussion, said
water was a vital issue for the Permian
Basin as well as for his water disposal
company, Trinidad Energy LLC.
"I have spent quite a bit of time

learning what our options are and what
the best things are to do with wastewater,"
he said.
James Kenney, secretary of the New
Mexico Environment Department, reviewed the impact of HB 546 dealing
with management and disposal of produced water, which overwhelmingly
passed the New Mexico Legislature this
year. He said Marathon Oil, the Sierra
Club and others came together to support
the bill, which became effective July 1
and now is in the process of being codified
into regulation.
In addition to clarifying the permitting
process, he said, the law clarifies liability
and requirements for financial assurance.
"Every time that produced water changes
hands in the business sense, the liability
now goes with it," Kenney outlined. "It
gives operators a lot of certainty that
someone has responsibility for it and the
operator is no longer liable."
The bill also provides a way for industry
to incentivize business agreements to encourage companies to use more recycled
produced water instead of freshwater, he
said. The bill does not contain monetary
or tax incentives, McGraw pointed out,
to help offset the expense of making produced water fit for general use.
"It's going to cost a lot of dollars to

get (produced water) in usable form and
the question is, how do we get there?"
he posed.
Kenney said his department was working with New Mexico State University to
identify ways to bring down water recycling costs.
Emily Lindley, a commissioner at the
Texas Commission on Environmental Quality, said her agency was formulating its
plan to regulate discharged water after the
Texas Legislature shifted the responsibility
to TCEQ from the Railroad Commission.
Stakeholder meetings began in September,
and TCEQ is required to secure EPA approval by Sept. 1, 2021, she noted.
During a separate water policy panel
discussion, Kelly Bennett, co-founder
and president of the firm, B3, which
builds data and analytical products, predicted that produced water production
would reach as much as 12.5 billion
barrels a year over the next 10 years, or
almost 35 million barrels a day.
B3 is tracking whether New Mexico's
water management needs are going to be
adequately served in light of ongoing
regulatory issues, although 100% water
recycling in the region is unlikely, Bennett
said. "But there are a lot of companies
pushing really hard on that and a lot of
innovative work is being done," he said.

Addressing the Permian Basin Petroleum Association's annual convention, Oct. 24 in
Midland, on water management issues were, from left, PBPA Chairman Kyle McGraw,
president of Trinidad Energy LLC; Texas Commission on Environmental Quality Commissioner
Emily Lindley; U.S. Environmental Protection Agency Region 6 Administrator Ken McQueen;
and New Mexico Environment Secretary James Kenny.

DECEMBER 2019 89

American Oil and Gas Reporter - December 2019

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