New Mexico Oil and Gas Boom Heightens Pipeline Safety
As more oil and
gas pipelines continue to be installed throughout southeast New Mexico and the
Permian Basin, safety regulations became more important in managing the
industry’s growth.
And the body that
would oversee the safety of such developments in New Mexico was recently
awarded a perfect score during an annual safety evaluation by the Office of
Pipeline Safety at the U.S. Department of Transportation.
For 2018, the New
Mexico Pipeline Safety Bureau – an arm of the New Mexico Public Regulation
Commission (PRC) – was awarded a score of 258 out of 258 points, read a news
release from the State of New Mexico.
“We have a great
team at the Pipeline Safety Bureau,” said Bureau Chief Jason Montoya. “Safety
throughout the state has been and will continue to be our priority.
“With the support
of our commissioners we will continue keeping New Mexico a safer place to live
and work through the enforcement of our regulations.”
The federal evaluation studied the state enforcement authority’s issuance of civil penalties, along with availability of its public records and its investigation practices and means of discovering damage.
“The Pipeline
Safety Bureau mission provides for the PRC agency to give optimum pipeline and
excavation safety for citizens,” the release read. “It does so through federal
and state compliance. This includes promoting damage prevention of underground
pipelines.”
Such threats
during the recent boom means the oil and gas industry must work closely with
the government to ensure compliance with regulations and public safety, said
Robert McEntyre, spokesman for the New Mexico Oil and Gas Association (NMOGA).
He said the
Bureau’s high rating gives the industry confidence that regulators are
competent.
“When they’re
effective at their jobs, so are we,” McEntyre said. “We want to work closely
with them to ensure we’re minimizing risks and protecting the public. That’s
our goal in everything we do.”
As oil and gas
production continued to grow in New Mexico, McEntyre said pipelines will become
increasingly necessary for the industry’s capacity to send oil and gas from the
Permian to market.
“As production has
grown, we’ve outgrown the takeaway capacity to move production out of the
Permian,” he said. “Pipelines are a critical part of continued growth in
southeast New Mexico. They’re hugely important to the industry, and a huge
growth area.”
By 2030, NMOGA
estimated about $174 billion would be needed in investments to both build new
and update current infrastructure such as wells, roads and pipelines.
The study said the
infrastructure would be needed to accommodate an expected 106 percent growth in
natural gas, 136 percent growth in natural gas liquids and 358 percent more
crude oil production.
Oil and gas’
production value was also expected to spike in the next decade, with 323
percent growth by 2030, read the study, up to $72.6 billion compared with $17.1
billion in 2017.
The industry’s
contributions to New Mexico’s gross domestic product (GDP) was also expected to
grow to 45 percent of the State’s GDP by 2030, the study read, bringing in $60
billion that year compared to $13.5 billion in 2017.
In fiscal year
2017, oil and gas tax revenue was about 30 percent of New Mexico’s general
fund, supporting healthcare, education, agriculture and public safety, per the
report.
McEntyre said to
successfully managed the growth, the industry must have strong partnerships
with regulators at the state and federal level.
“Having a partner
in the Bureau that is competent only helps us grow effectively,” he said. “It
will only help us continue to grow.”
But that growth
could also bring more danger along pipelines, as some of the new pipelines
built across the country could be the most dangerous, read a study from the
Pipeline Safety Trust.
The report showed
a cluster of hazardous liquid and gas release incidents from lines built since
2010 in the Permian Basin area around southeast New Mexico and West Texas.
The study reported
13,453 incidents per 10,000 miles of onshore hazardous liquid pipelines built
in the 2010s, the highest since the 1920s, which was at 8,712.
Gas incidents were
also the highest in the 2010s, with 6,640 events reported in the study.
“The uncertainty
surrounding the safety of new pipelines underscores the need to push for
pipelines to be sited, installed, tested and inspected in the best way
possible, and for the regulators to ensure that is the case through strong and
enforced regulations,” read the report.
“And all of this only works well when the public has the ability to be involved in the process and has access to the information needed to understand and review all aspects of pipeline safety. We still have a long way to go.”