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Members,
As February comes to a close, we have provided updates on the information PBPA has tracked regarding the recently adjourned New Mexico Legislative Session. Thank you to our New Mexico Legislative Committee for assisting the PBPA team in monitoring important legislation during this short session.
In this version of The Standard, we provide updates including information on the EPA's Waste Emissions Charge, domestic LNG exports, and new digital advertising opportunities. Our team has been hard at work advocating for the oil and gas industry in the Permian and your input and participation are highly appreciated.
Below, you will also find information on our upcoming golf tournament, committee meeting schedules, and other important information. As always, we also provide details on upcoming PBPA events and other relevant community activities:
Important Updates
- 2024 Spring Swing Golf Tournament
- New Mexico Legislative Session Adjourns
- PUC Project 55718
- EPA's WEC
- Domestic LNG Exports
- West Virginia vs. EPA... again.
- OOOOb/c Published in Federal Register
- Member News: NEW Digital Advertising!
- RECAP: February Luncheon
- 2024 Permian Basin Environmental Regulatory Seminar
- Committee Meetings
Community Events
- Midland College PPDC Training Courses
- EPA OOOOb/c Webinar
- Reception honoring Commissioner Wayne Christian
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Additional events can be found on the calendar in the Member-Only Center!
Regards,
Ben Shepperd
PBPA President
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Spring Swing Golf Tournament | |
On April 8th, we will gather at the Odessa Country Club for the PBPA's annual Spring Swing Golf Tournament.
This four-man scramble begins with a shotgun start at 12:30 pm on two magnificent courses with food, fun, and networking available to all who attend.
Since this is one of our most well-attended events, you won't want to wait to sponsor or register. Reserve your spot today!
Tournament Schedule:
- 11:00 AM: Registration & Lunch
- 12:30 PM: Shotgun Start
- 5:00 PM: Closing Reception (Afternoon awards presented! Must be present to win.)
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2024 Legislative Session Adjourns
The New Mexico Legislature’s 2024 session has come and gone. As has been the case in recent years, there were several bills debated during the 30-day session that would have devastated the industry in the name of climate change and impending doom caused by the fossil fuel industry. Fortunately, a majority of the Legislature recognized the extraordinary efforts of industry to continue to improve our operations and our environmental stewardship, not to mention the astonishing economic benefits to every citizen in New Mexico. I want to thank the Legislature for recognizing the tremendous impact and benefits of the oil and gas industry, and for working with us throughout the session in support of continuing those benefits.
I also want to thank the fantastic PBPA members who worked hard in our committees and in the Roundhouse to explain the impact of legislation to all who would listen. Led by our long-time friend Mike Miller and our distinguished PBPA Legislative chairman, Patrick Killen, our team worked closely with our good partners at the New Mexico Oil and Gas Association and the Independent Producers Association of New Mexico to make a meaningful difference in the outcome of this legislative session.
Below are two bills of interest that did pass and are headed to the governor’s desk. The governor has until March 6 to sign these bills or they will be pocket vetoed.
HB 41 – Clean Fuels Standards – adds the terms carbon intensity; fuel lifecycle; and transportation fuel to the definitions in Section 74-1-3 NMSA 1978 of the Environmental Improvement Act. It authorizes the NM Environment Department (NMED) and the Environmental Improvement Board (EIB) to adopt rules concerning the carbon intensity of transportation fuels in Sections 74-1-7 and 74-1-8 NMSA 1978 respectively. It mandates the EIB to adopt rules that will implement the Clean Fuel Transportation Standard Program no later than 1 July 2026 after convening and consulting with an advisory committee composed of certain stakeholders. The bill specifies the goals and parameters of these rules including the establishment of a statewide technology-neutral clean transportation fuel standard that will reduce the carbon intensity of transportation fuels used in the state; requirements that participating utilities invest in decarbonization infrastructure projects; establishment of a periodic review process that includes input from the advisory board; and establishment of fees to cover the cost of this program.
HB 252 – Adjustment of Income Tax Brackets. While there are a number of changes included in this bill, of note for the oil and gas industry would be the following oil & gas severance tax exemptions under the following circumstances, when:
- “natural gas severed and sold from a production restoration project during the first ten years of production following the restoration of production, provided that the annual average price of west Texas intermediate crude oil, determined by the department by averaging the posted prices in effect on the last day of each month of the twelve-month period ending on May 31 prior to each fiscal year in which the tax exemption is to be effective, was less than twenty-four dollars ($24.00) per barrel;”
- “beginning July 1, 2024, natural gas severed from a stripper well property and sold from a production compliance project during the first ten years of production following the completion of the project or until the date the total amount of tax that would have been imposed but for this subsection equals the cost of the production compliance project, whichever occurs first;”
- “beginning July 1, 2024, oil and other liquid hydrocarbons removed from natural gas at or near the wellhead from a stripper well property production compliance project during the first ten years of production following the completion of the project or until the date the total amount of tax that would have been imposed but for this subsection equals the cost of the production compliance project, whichever occurs first; and”
- “oil and other liquid hydrocarbons removed from natural gas at or near the wellhead from a production restoration project during the first ten years of production following the restoration of production, provided that the annual average price of west Texas intermediate crude oil, determined by the department by averaging the posted prices in effect on the last day of each month of the twelve-month period ending on May 31 prior to each fiscal year in which the tax exemption is to be effective, was less than twenty-four dollars ($24.00) per barrel.”
Other bills, resolutions or memorials of interest that did not pass this session, but which were closely watched, included the following:
HB 9 – Climate, Energy & Water Division – would have created the Climate, Energy and Water Division within the Economic Development Department. It would have established the decarbonization technology program and created the Climate, Energy and Water Project Fund with an appropriation of fifteen million dollars ($15,000,000).
HB 48 – Oil & Gas Future Royalty Rates – would have increased the maximum royalty rate on future oil and gas development leases on state trust lands from one fifth to one quarter in Section 19-10-4.3 NMSA 1978.
HB 133 – Oil & Gas Act Changes – would have included a number of amendments to the Oil & Gas Act and was amended in both the House Energy and Natural Resources Committee and again in the House Judiciary Committee. This bill, or aspects of this bill either as originally introduced or as amended during the session, will likely come up again in future sessions.
HM 42 – Methane Emission Task Force - The memorial asked the Department of Environment to establish a working group to develop proposed rules and legislative recommendations with the aim of reducing methane emissions relating to the production, transportation and marketing of natural gas purchased by regulated utilities in New Mexico. The group’s work would be presented to appropriate legislative interim committees by November 1, 2024.
SB 249 – Oil & Gas Fund Accounting – would have changed a distribution to the Oil and Gas Reclamation Fund to a dollar amount. It would have required money from federal sources to be separately accounted for from other money in the fund and to be expended before any other money in the fund. SB 249 provided for a reversion of the balance in the fund.
SJR 8 – Green Amendment – failed to make it out of committee for the third session in a row. Proposed an amendment to the NM Const. Article 2 by adding a new section that would provide the people of the state with environmental rights.
SM 8 – Oil & Gas Facility Setbacks Study – would have requested the Energy, Minerals and Natural Resources Department to study and recommend legislation for establishing setbacks for oil and gas facilities.
SM 14 – Oil & Gas Facility Setbacks Study - The memorial asked the Energy, Minerals and Natural Resources Department to establish a stakeholder working group to study existing law and industry practices to develop recommendations for creating setbacks for oil and gas facilities with an eye toward preventing waste and protecting correlative rights, human health and the environment.
Please reach out to Stephen Robertson (stephen@pbpa.info) for more information.
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PUC Project 55718
PBPA continues to work in Texas to address important issues on behalf of our members. Of most recent note is the effort to expand transmission capacity across the Permian Basin for our oil and gas operators. Since PBPA worked to host the Public Utility Commission in Midland in December, the PUC and ERCOT have worked with industry and transmission service providers to collect and provide data to better assist in existing load-seeking interconnection as well as forecasted future load. These efforts have been encouraging and PBPA continues to work to ensure that this PUC Project 55718 continues to provide value and benefits to our members.
Additionally, with the primary elections wrapping up, and perhaps some runoffs beginning, PBPA is reviewing suggestions for interim charges that operators would like to have reviewed before the next session. If you have suggestions, or for more information, please contact michael@pbpa.info.
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EPA's WEC
The Inflation Reduction Act (IRA) authorizes the U.S. Environmental Protection Agency (EPA) to impose and collect an annual charge on methane emissions that exceed specified waste emissions thresholds from applicable oil and gas facilities. To this end, the EPA has developed its proposed Waste Emissions Charge (WEC) which will apply to petroleum and natural gas facilities that emit more than 25,000 metric tons of CO2 equivalent per year as reported under Subpart W of the Greenhouse Gas Reporting Program.
PBPA has organized a Work Group of our membership that is focused on reviewing, analyzing, and commenting on this proposed WEC. The public comment period on this proposal is currently open until March 26, 2024. If you are interested in joining PBPA’s commenting effort, please let us know.
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Domestic LNG Exports
On February 15, 2024, the U.S. House passed legislation to reverse President Biden's liquefied natural gas (LNG) export ban and unleash American LNG to lower energy costs while advancing U.S. energy security and the security of our allies. H.R. 7176, the “Unlocking our Domestic LNG Potential Act of 20-2024” was sponsored by the Permian Basin’s own Rep. August Pfluger (R-Tx 11).
H.R. 7176 repeals certain restrictions on the import and export of natural gas under the Natural Gas Act, including requirements for Department of Energy (DOE) approval and related provisions that address free trade agreements. It also grants the Federal Energy Regulatory Commission (FERC) the exclusive authority to approve or deny applications to authorize the siting, construction, expansion, or operation of facilities (e.g., liquefied natural gas terminals) to export natural gas to foreign countries or import natural gas from foreign countries. (Currently, DOE authorizes the export or import of natural gas, and FERC authorizes related facilities.) In determining whether to approve or deny an application, FERC must deem the exportation or importation of natural gas to be consistent with the public interest.
The effort now moves to the Senate.
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West Virginia vs. EPA…again.
Dozens of states, including Texas, have petitioned the U.S. Court of Appeals for the District of Columbia to review the U.S. Environmental Protection Agency’s “Adoption and Submittal of State Plans for Designated Facilities: Implementing Regulations Under Clean Air Act Section 111(d),” claiming that the action exceeds the agency’s statutory authority and otherwise is arbitrary, capricious, an abuse of discretion, and not in accordance with law.
Sixteen other states, including New York, California, and Colorado, have moved to intervene in the case on behalf of EPA.
The case is being styled State of West Virginia, et al. v. EPA, No. 24-1009 (D.C. Cir.), and a copy of the petition can be found here: https://www.epa.gov/system/files/documents/2024-02/24-1009_docketentry_01-16-2024_.pdf.
As this case progresses we will keep everyone updated.
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OOOOb/c Published in Federal Register
On February 23, 2024, at 4:15 PM, a notice appeared in the Federal Register that OOOOb/c (officially known as “Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources: Oil and Natural Gas Sector Climate Review”) was filed but would not be officially published in the Federal Register until March 8, 2024. If this occurs, the rule would be effective 60 days from March 8, 2024, which by my math would be May 7, 2024. The notice can be found here: https://www.federalregister.gov/public-inspection/2024-00366/standards-of-performance-for-new-reconstructed-and-modified-sources-and-emissions-guidelines-for.
We knew this day was coming and we are here to help everyone understand and comply with the rule. This includes engagement with the states of Texas and New Mexico on the Climate Pollution Reduction Grants (CPRG) and with private parties on the Methane Emissions Reduction Program (MERP), both of which are billed as programs intended to help operators comply with the new OOOOb/c. However, as a reminder, the Railroad Commission of Texas has asked the Texas Attorney General to consider suing the EPA over the rule and, since we have been asked to leave no stone unturned, we are involved in conversations with other stakeholders about the possibilities of bringing private action against the EPA for aspects of the rule.
Please let us know what questions you have. We will keep you updated with any additional information we receive.
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NEW: Member-Exclusive Digital Advertising Opportunities | |
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Members can now share information about their business or organization with fellow PBPA members through dedicated e-blasts or banner ads in the monthly newsletter! Member-sponsored ads will reach over 1,000 contacts on the PBPA email distribution list.
This opportunity is only offered to members of the PBPA and availability is limited. For additional information, contact our team!
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RECAP: February Membership Luncheon | |
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Thank you to everyone who attended the February Luncheon this month! We appreciate Chairman Christi Craddick of the Railroad Commission of Texas making the trip to update our membership about important RRC happenings.
Chairman Craddick's presentation focused on the rising number of challenges the RRC faces from the federal government, including seeking primacy from the Environmental Protection Agency to permit Class VI wells for carbon dioxide injection and uncertainty around the federal dollars to be used for plugging wells under the Inflation Reduction Act.
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2024 Permian Basin Environmental Regulatory Seminar | |
- Regulatory Practices Committee: 2/29/2024 & 3/19/2024
For more information on these or any of our other committees, please contact Stephen Robertson at stephen@pbpa.info or (432) 684-6345.
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MC PPDC provides quality training programs designed to keep oil and gas industry professionals current in their areas of expertise by offering the latest industry updates, as well as providing timely and pertinent educational opportunities. Click the link below for upcoming classes being offered by the MC PPDC in the coming months.
Customized Training Available! For more information contact Midland College PPDC at (432) 683-2832 or cepetroleumtraining@midland.edu
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EPA's Alternative Test Method Webinar | |
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Tuesday, March 19th
1 - 4 PM CT
The EPA has scheduled a webinar titled “Alternative Test Method – Advanced Methane Detection Technology” that will focus on the options in the final rule one OOOO b/c for using advanced methane detection technologies, like satellite monitoring, aerial surveys, and continuous monitors, to find leaks or super-emitter events. It will include details on the process for applying to use alternative test methods and what needs to be included in the application. The webinar will be from 1-4 p.m. Tuesday, March 19.
To register for these webinar, you can go here: https://www.epa.gov/controlling-air-pollution-oil-and-natural-gas-operations/epas-final-rule-oil-and-natural-gas-0
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While PBPA does not engage in political activity, we always want to make sure our members are aware of opportunities to get to know candidates or elected officials who could make decisions that impact operations in the Permian Basin. This is not a PBPA event or an endorsement of any candidate or party. | |
Midland Reception Honoring Railroad Commissioner Wayne Christian | |
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March 27th, 2024
Please join Railroad Commissioner Wayne Christian for a fundraising reception hosted by Fasken Oil & Ranch in Midland at the Petroleum Club (501 W. Wall St., Midland, TX 79701) on Wednesday, March 27th from 5:00 - 6:00 PM.
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