January 30, 2019 / 12:01 AM / in 6 months

New Mexico governor moves to limit methane emissions, combat climate change

(Reuters) - New Mexico Governor Michelle Lujan Grisham on Tuesday ordered state officials to develop regulations to reduce methane emissions from its oil and gas industry and separately rollback statewide greenhouse gas output over the next decade.

FILE PHOTO: Democratic candidate for governor Michelle Lujan Grisham sits down for a meal at Barelas Coffee House on midterm elections day in Albuquerque, New Mexico, U.S., November 6, 2018. REUTERS/Brian Snyder

The New Mexico Energy, Minerals and Natural Resources Department and Environment Department were directed to enact methane emission reduction “rules as soon as practicable,” the executive order said.

Lujan Grisham, a recently-elected Democrat, campaigned on the promise of tightening environmental guidelines for the southwestern state’s fossil fuels sector.

As home to part of the booming Permian Basin oil hub, New Mexico has doubled its oil output in recent years to become one of the top crude-producing states.

In her executive order, the governor also formed a task force to develop a plan to curb the state’s greenhouse gas emissions by 45 percent from 2005 levels by the year 2030. The group is set to release its initial recommendations by Sept. 15.

Additionally, Lujan Grisham announced New Mexico has joined a group of governors, known as the U.S. Climate Alliance, electing to uphold the Paris climate agreement despite President Donald Trump’s decision to remove the United States from the pact.

Also on Tuesday, a New Mexico lawmaker filed legislation, backed by Land Commissioner Stephanie Garcia Richard, to increase the royalty rate on 9 million acres of state land.

The bill would increase the state’s typical 12.5 to 20 percent royalty to match Texas’ 25 percent royalty, though it would target only the top performing wells. The higher royalty rate would kick in for oil wells when production reaches 20,000 barrels per month.

The bill would also require companies to pay royalties when natural gas is flared or vented - something that is common when new oil wells come online but gas pipelines are not in place.

Garcia Richard’s office noted in a news release that the state loses around $1 million per month on unpaid royalties due to venting and flaring.

The bill would only impact new oil and gas leases that the state negotiates.

Reporting by Laila Kearney in New York and Jennifer Hiller in Houston; editing by Diane Craft

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