BY ERIN CAMP AND ALEXANDRA MERLINO
The first question any economist asks about any new policy is: Do the benefits outweigh the costs? A new economic report shows that in the case of nationally leading air pollution regulations for the oil and gas industry in New Mexico, they do.
Synapse Energy Economics Inc. recently determined that comprehensive, statewide rules that address all wells in New Mexico would be cost-effective across every set of benefits and costs we examined.
As state regulators consider comments from a wide variety of New Mexico stakeholders calling for stronger draft air pollution and methane rules that eliminate exemptions for low-producing – or stripper – wells and for other sites below a 15 ton per year VOC pollution threshold, this should be welcome news. Our analysis illustrates that by setting aside these exemptions in favor of more comprehensive oil and gas emissions rules, the state can offer an excellent return on investment for the people of New Mexico.
On the benefits side of the ledger, this study shows that comprehensive oil and gas emission reduction rules, which include measures like quarterly leak inspections and requirements to install less-polluting devices at oil and gas well sites across New Mexico, can deliver substantial social and environmental benefits to the state’s residents. These benefits include increased tax and royalty revenue that can fund important state priorities like education, improved public health, and lower economic costs associated with air pollution.
These measures can have substantial benefits to the people of New Mexico through reducing emissions of harmful volatile organic compounds (VOCs). Oil and gas operations in New Mexico emit hundreds of thousands of tons of VOCs every year.