Pursuant to New Mexico’s Oil and Gas Act, the Energy, Minerals and Natural Resources Department (EMNRD) has promulgated the 19.15 NMAC (New Mexico Administrative Code) to regulate the venting and flaring of natural gas. 19.15.27 NMAC focuses on the oil and gas production and 19.15.28 NMAC targets gas gathering and processing in New Mexico.
Venting or flaring of natural gas is generally prohibited, and operators have a duty to maximise the recovery of natural gas and minimise waste. In all circumstances, the operator shall flare rather than vent natural gas except when flaring is technically infeasible or could incur safety risks.
The regulation mandates the technical and procedural requirements for measurement and reporting of vented or flared gas. Operators are required to install monitoring equipment, and conduct regular audio, visual and olfactory (AVO) inspection. They are required to report instances of flaring and venting monthly, in addition to immediate reporting of any instances that exceed 50 mcf in volume or other emergencies and malfunctions.
Beginning on 1 April 2022, operators are required to increase the capture rate of natural gas produced in its wells on an annual basis in order to reach at least 98% captured by 31 December 2026. The operator shall first calculate a baseline capture rate, based on their Q4 2021 and Q1 2022 reports. From 1 January 2022 to 31 December 2026, the operator shall increase its annual gas capture percentage based on the provided formula: (baseline loss rate - 2%)/5. An operator shall submit to EMNRD a detailed plan to meet the minimum required annual capture percentage increase if the baseline rate is below 60%. An operator that has not met its annual capture requirements for the previous year must submit to the EMNRD a compliance plan demonstrating its ability to comply with its annual requirement for the current year. For oil and gas producers, EMNRD reserves the right to suspend the operator’s approved Applications for Permit to Drill if EMNRD determines that the plan does not demonstrate ability to comply. Lastly, EMNRD also retains the legal right to shut in wells and assess civil penalties if the operator fails to comply.
Operators have the obligation to submit a report certifying compliance with its gas capture requirements each year beginning in 2023 and are allowed to use advanced leak and repair monitoring (ALARM) credits to offset part of the compliance. ALARM credits are earned by detecting natural gas leaks or releases using EMNRD-approved technology.