While President Joe Biden’s $737 billion Inflation Reduction Act (IRA) aims to address a cornucopia of American ills, arguably its most important aspect is how it jump-starts the country’s fight against climate change. It attacks the country’s carbon emissions from both ends — consumption and production — with one primary tool: money. A lot of money: $369 billion, to be exact, much of that devoted to helping people, companies and government agencies buy more things that create less carbon pollution. That has many activists hailing the bill as a historic step forward on climate action, but not everyone is sold on the strategy.
“All of these environmental organizations are singing its praise, ‘The strongest climate bill ever passed!’” says Sharon Wilson, a senior field advocate at Earthworks in Texas. “It is also the shittiest climate bill ever passed. Because it is the only climate bill that’s ever passed.”
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There is only one climate punishment in the IRA: a new Methane Emissions Reduction Program (MERP) that levies a methane tax on oil and gas producers who exceed strict limits on how much they can emit the potent greenhouse gas. But the program may have the ironic consequence of increasing oil and gas production — and methane emissions — in New Mexico.
The MERP allows Environmental Protection Agency (EPA) administrators to use and enforce state rules when they meet or exceed what is written in the federal regulations. And since New Mexico already has some of the strictest oil field emissions regulations in the country, companies may choose to expand operations there with the clear, well-known regulatory system that is already in place, one that is likely to get a nod from the EPA.
But there’s also another, more practical reason why producers may want to go there: While the state has the rules, it hasn’t matched those rules with an increase in oil field monitoring and enforcement, and historically, the EPA hasn’t been a strong enforcer, either.
Reducing emissions from the consumer end will certainly, eventually, reduce greenhouse gas levels overall. Yet reducing production-side emissions — which are primarily composed of methane — could have a larger, quicker effect on lowering the country’s greenhouse emissions. As the International Energy Agency wrote earlier this year, “Methane emissions from oil and gas operations must be the first to go.” That’s because methane — the main component of natural gas — is more than 80 times more potent than carbon dioxide as a heat-trapping greenhouse gas.
“No state methane rules are effective, from what we’ve seen.”
~ Sharon Wilson, senior field advocate, Earthworks
In New Mexico, 53% of greenhouse gas emissions come from the oil and gas production sector, and the state has implemented two sets of rules in the past 15 months to bring those emissions down. State agencies like to say that they are the strongest methane reduction rules in the country. In fact, the state is “unique in getting ahead of the ball on methane,” says Barry Rabe, the J. Ira and Nicki Harris Family Professor of Public Policy and a professor of environmental policy at the University of Michigan. “Strategically, New Mexico could do very well on this under this legislation.” Many environmental groups hold similar hopeful views.
Wilson is less optimistic. For years, she has traveled through oil and gas fields across Texas, New Mexico and Colorado, thermal imaging camera in hand, documenting methane and other toxic gas leaks from petroleum production equipment. “There must be some assumption,” she says, “that the state methane rules will be effective.” But over the years, Wilson has found little evidence to support that.
“No state methane rules are effective, from what we’ve seen,” she says. “And from what the people who live near oil and gas tell us, they’ve not made a difference.”
And one federal agency has already begun the process of increasing oil and gas production in New Mexico under the IRA.