A trio of major oil and gas producers are testing a new-to-New Mexico process to keep natural gas in the ground when it can’t be transported, sold or otherwise shipped through a pipeline.
Instead of flaring or venting natural gas or completely shutting down wells when a midstream pipeline operator has an issue, the three producers — EOG Resources, Inc., Occidental Petroleum Corp. and Chevron Corp. — can now re-route backed-up gas into closed-loop gas capture systems, or CLGC, where it is re-injected into an active oil well. It then can be taken out later when a pipeline again has enough capacity.
The New Mexico Oil Conservation Division regulates the state’s oil and gas field operations and issued the orders allowing the state’s pilot CLGC wells. Dylan Fuge, the division’s director, said he expects the process will help reduce venting and flaring. “Overall, CLGC systems result in less waste due to an increase [in] an operator’s gas capture,” he said.
Producers want to capture this gas rather than flare it because they can sell it later. Plus, Fuge said, flaring the captured gas would not make sense given the cost and effort to set up the wells.
Occidental was the only one of the three companies to respond to questions about CLGC systems. “CLGC is part of Oxy’s overall strategy to reduce greenhouse gas emissions,” said Jennifer Brice, the company’s director of communications and public affairs. She said the process minimizes flaring when third parties are unable to handle the gas [i.e. during mechanical breakdowns], and “keeps production online, and conserves natural resources when produced gas is stored rather than flared.”
So far, New Mexico’s CLGC projects are small, and their promise hasn’t panned out in the oil and gas fields.
EOG, Occidental and Chevron operate nine pilot CLGC projects in New Mexico. A review of venting and flaring records the three companies submitted to OCD showed that flaring amounts for EOG rose nearly twentyfold in the past year. Occidental and Chevron reported flaring nothing at all.
At the same time, the “waste” Fuge referred to — natural gas lost in production, often due to leaks between a wellhead and a pipeline — spiked for all three companies in recent months, though inconsistencies in Chevron’s numbers leave that somewhat inconclusive. (Chevron reported processing more gas than it pulled from the ground in January and April.) EOG reported losing enough natural gas in June alone to equal the greenhouse gas emissions of 100 cars driven for a year. That’s four times what it burned in emergency flaring the previous year and far more dangerous to the climate.
Given that murky picture, it’s not clear how much the pilot CLGC systems may be helping reduce emissions, much less mitigate contributions to climate change. Fuge at OCD said, “Operators are subject to robust reporting requirements under the CLGC order.
OCD reviews the information submitted by the operator for any anomalies.”
Even so, he said, his agency hasn’t aggregated the data filed from the nine pilot sites to see how much gas has been injected and re-produced by the three companies. Plus, CLGC data collection is complicated by the fact that the injected gas went through the state’s royalty and taxation system when it was pulled from the ground the first time. “We cannot use the standard reporting system,” Fuge said, “as it would result in double counting of production.”
That raises the question: Can OCD effectively monitor a new oilfield process when the agency has struggled for funding to meet the enforcement obligations it already has? New Mexico’s already massive greenhouse gas emissions make the answer a matter of vital importance.
* * *
The Environmental Defense Fund has been tracking and tallying emissions in New Mexico and finds that the state is falling well short of its climate targets.
According to a report released earlier this month: “The state is on track to reduce emissions by less than one-third of what is necessary to meet 2030 commitments made by Gov. [Michelle] Lujan Grisham.”
EDF said that to reach its goals, the state must (among other things) increase oilfield pollution enforcement by OCD and the New Mexico Environment Department, since more than half of the state’s greenhouse gas emissions come from oil and gas production.
And each time someone looks, the number and volume of those emissions rise.
Earlier this year, GHGSat, a private company with a network of satellites that scan for methane (methane comprises up to 90% of natural gas), reported that more than half of the oil- and gas-based emission events it found in the U.S. were in the Permian Basin, while the…
Read More: Natural gas recapturing process promises waste reduction — but questions linger