American Oil and Gas Reporter - March 2020 - 22

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IndustryDigest
justed return than green-field opportunities, which can be impacted by an ambiguous and vulnerable regulatory
framework," Williams is quoted. "We
are prepared to deliver the clean energy
benefits of natural gas now through infrastructure projects such as Regional
Energy Access, Leidy South and the
Northeast Supply Enhancement."
The fate of the Jordan Cove LNG
project, meanwhile, remains undecided. The area's citizens have supported
the project by decisively rejecting a
ballot measure intended to stop the
project (AOGR, July 2017, pg. 23).
However, state regulators have tended
to agree with project opponents. One
such example before February's
DLCD announcement occurred when
Oregon's Department of Environmental Quality refused to issue a Section
401 certificate for the project (AOGR,
June 2019, pg. 18).
When FERC considered the project
in February, media reports note, Commissioner Richard Glick voted against
the project, as did Commissioner
Bernard McNamee, who expressed a
desire for more time to review Oregon's
permit denials. ❒

Rule Makings Progress
Under Watchful Eye Of
N.M. Industry Groups
SANTA FE, N.M.-Even as they hail
the 2020 New Mexico Legislature as a
success, the state's oil and gas industry
representatives also have been occupied
with issues arising from the 2019
session. According to Independent Oil
& Gas Association of New Mexico

President Jim Winchester, industry
groups have spent much of the past nine
months focused on the state's plans to
revise regulatory violations and
methane emissions.
"These are the issues that were
passed last year and then taken up by
the departments to work out the details,"
he says.
Among them is a rule making and
the finalization of a revised approach to
operator violations.
With the signing of the final order
earlier this year, inspectors with the Oil
Conservation Division have regained
the authority to issue violation notices
directly to the operator without having
to file a civil action in state court.
The revision was directed by the
2019 passage of HB 546. With the
potential for fines as great as $10,000 a
day up to $200,000, the impact on
smaller independent operators can be
significant, Winchester warns.
As last year's session waned,
IPANM was unable to support the
compromise bill, Winchester recalls,
and IPANM's reservations remain. The
final OCD rule on administrative
penalties is vague and leaves too many
questions unanswered, he describes.
"We were assured that if we
participated in the stakeholder process,
our concerns would be heard," Winchester
relates. "Unfortunately, our arguments in
favor of defining violations and a table of
penalties were not adopted."
As written, the rules grant too much
discretion to inspectors, leaving
operators open to being singled out or
falling victim to inconsistent application,
Winchester warns. "Our view is that
OCD will try and figure things out as it

goes along; we have some real concerns
about that," he admits.
Meanwhile, industry groups also are
responding to proposals from the
Energy, Minerals and Natural Resources
Department and the New Mexico
Environment Department to
respectively develop regulations to
reduce and capture methane and
emissions of volatile organic
compounds from oil and gas operations.
Following a period of public
comment last winter, a 27-member
Methane Advisory Panel (MAP) was
convened and met 14 times from
August to November. The panel
included 17 oil and gas company
representatives and ten members
representing environmental or
conservation groups. The panel's 300page draft technical report was issued
Dec. 19 with a public comment period
that concluded Feb. 20.
"The stakeholder process has been a
useful exercise in methane rule making
and not just a 'check the box' token for
the administration," Winchester affirms.
"For now, we are in a wait and see
mode" while the departments produce
draft documents.
New Mexico Oil & Gas Association
Executive Director Ryan Flynn says the
panel's report offers a summary of
current emissions control technology
and regulations but offers no
recommendations. "The ball is in the
agencies' court. They have to take that
list of ideas and produce a draft of how
to make it work," Flynn relates.
Both departments are expected to
issue drafts of final rules for public
comment before the end of the year,
Winchester adds. ❒

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American Oil and Gas Reporter - March 2020

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