SENATE CONSERVATION COMMITTEE SUBSTITUTE FOR

SENATE MEMORIAL 102

53rd legislature - STATE OF NEW MEXICO - first session, 2017

A MEMORIAL

REQUESTING THE ENERGY, MINERALS AND NATURAL RESOURCES DEPARTMENT TO PRODUCE A REPORT ON THE AMOUNT OF NATURAL GAS BEING VENTED AND FLARED IN NEW MEXICO AND ON GAS CAPTURE PLANS SUBMITTED BY OIL AND GAS OPERATORS AND TO REPORT TO THE APPROPRIATE INTERIM LEGISLATIVE COMMITTEES ON THE AMOUNT OF NATURAL GAS LEAKED FROM OIL AND GAS OPERATIONS.

     WHEREAS, venting and flaring of natural gas by oil and gas operators in New Mexico contribute to the waste of limited energy resources and deprive the state of a needed source of revenue; and

     WHEREAS, in fiscal year 2014, general fund revenues were six billion dollars ($6,000,000,000), of which two billion one hundred million dollars ($2,100,000,000) came from taxes and royalties on oil and gas production, according to information compiled by the New Mexico tax research institute; and

     WHEREAS, royalties on oil and gas production contributed ninety percent of the revenue generated on state lands that support New Mexico's public schools, universities and hospitals; and

     WHEREAS, in 2015, approximately one hundred million dollars' ($100,000,000) worth of natural gas was vented or flared on federal lands in New Mexico on which no royalties were paid, costing the state an estimated six million dollars ($6,000,000) in lost revenues, according to statistics compiled by the western values project; and

     WHEREAS, the energy, minerals and natural resources department has implemented new reporting requirements, with the goal of reducing natural gas emissions; and

     WHEREAS, the energy, minerals and natural resources department has stated its intent to establish a baseline for flaring volumes and targets for reductions; and

     WHEREAS, since January 15, 2016, the energy, minerals and natural resources department has required oil and gas operators to separately report venting and flaring amounts of natural gas on their monthly production reports; and

     WHEREAS, since May 2016, the energy, minerals and natural resources department has required oil and gas operators, in their applications for new wells, to submit gas capture plans outlining the actions they have taken to reduce venting and flaring through connection of wells to pipelines; and

     WHEREAS, the energy, minerals and natural resources department does not currently require reporting of volumes of natural gas leaked from oil and gas operations;

     NOW, THEREFORE, BE IT RESOLVED BY THE SENATE OF THE STATE OF NEW MEXICO that the energy, minerals and natural resources department be requested to produce a report, including:

          A. a compilation and summary of the information it collects regarding the volumes of natural gas vented and flared;

          B. the reasons natural gas is vented and flared; and

          C. the information it collects from gas-recapture plans submitted by oil and gas operators; and

     BE IT FURTHER RESOLVED that the energy, minerals and natural resources department be requested to include in its report proposals to increase the volumes of natural gas to be sold rather than vented and flared and information about existing and proposed natural gas pipelines and processing facilities, and any commercially viable technologies to be used in place of selling natural gas through a pipeline; and

     BE IT FURTHER RESOLVED that the energy, minerals and natural resources department be requested to include in the report information on venting and flaring and gas-recapture plans, classified by federal, state, Indian and private mineral ownership, county and operator; and

     BE IT FURTHER RESOLVED that the energy, minerals and natural resources department also be requested to identify in its report the top twenty-five operators venting natural gas and the top twenty-five operators flaring natural gas; and

     BE IT FURTHER RESOLVED that the energy, minerals and natural resources department be requested to make its report accessible to the public through the website of the oil conservation division of the energy, minerals and natural resources department; and

     BE IT FURTHER RESOLVED that duplicate copies of the report be filed with the legislative council service library; and

     BE IT FURTHER RESOLVED that the energy, minerals and natural resources department be requested to report to the appropriate interim legislative committees regarding the amount of gas wasted through venting, flaring and leakage; reasons why natural gas is flared or vented; proposals to increase the natural gas that is sold rather than vented and flared; plans to capture the wasted gas; cost and benefit issues; and possible regulatory changes; and

     BE IT FURTHER RESOLVED that copies of this memorial be transmitted to the secretary of energy, minerals and natural resources, the secretary of finance and administration, the secretary of environment, the commissioner of public lands, the members of the New Mexico congressional delegation and the co-chairs of the New Mexico legislative council.

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