New Mexico regulates oil and gas air emissions through two complementary state agencies with distinct but coordinated rules. The New Mexico Environment Department (NMED) administers the Ozone Precursor Pollutants rule (20.2.50 NMAC, effective August 5, 2022), which establishes VOC and NOx emission standards for oil and gas operations in eight counties with elevated ozone levels: Chaves, Doña Ana, Eddy, Lea, Rio Arriba, Sandoval, San Juan, and Valencia. The Energy, Minerals and Natural Resources Department (EMNRD) Oil Conservation Division (OCD) administers the Methane Waste Rule (19.15.27 NMAC), which requires operators to capture 98% of natural gas by December 31, 2026 and bans routine venting and flaring. Together, these rules form one of the most comprehensive state-level regulatory programs for oil and gas methane and ozone precursor emissions in the country. This checklist covers the major compliance elements of both rules for operators in New Mexico’s Permian Basin (Eddy/Lea Counties) and San Juan Basin.
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20.2.50 NMAC — Oil and Gas Sector: Ozone Precursor Pollutants (NMED)
NMED’s Ozone Precursor Rule applies to oil and gas operations in eight New Mexico counties with ozone levels exceeding 95% of the NAAQS. The rule establishes emission standards for storage tanks, pneumatic controllers, compressors, glycol dehydrators, engines/turbines, pig launching/receiving, and equipment leaks. LDAR inspection frequencies are based on facility potential to emit (PTE) VOC, with monthly inspections required for larger sources. The rule allows Method 21 or OGI for leak detection.
19.15.27 NMAC — Methane Waste Rule (EMNRD/OCD)
EMNRD’s Methane Waste Rule requires all oil and gas operators in New Mexico to capture 98% of produced natural gas by December 31, 2026. The rule bans routine venting and limits flaring to emergencies and specific exemptions. Operators established baseline capture rates in Q4 2021 and must increase capture rates annually. Non-compliant operators must submit compliance plans and may face permit suspensions.
Executive Order 2019-003 and New Mexico Climate Strategy
Governor Lujan Grisham’s 2019 Executive Order directed NMED and EMNRD to jointly develop a statewide enforceable framework for reducing oil and gas methane emissions. The state’s methane strategy targets a 45% reduction in methane emissions from the sector. Oil and gas operations account for an estimated 53% of New Mexico’s total GHG emissions.
NMED Ozone Precursor Rule — LDAR and Equipment Leaks
| Audit Item | Expected Finding / What to Evaluate |
|---|---|
| LDAR program scope and frequency | LDAR program covers all applicable components per 20.2.50.116 NMAC: thief hatches, closed vent systems, pumps, compressors, pressure relief devices, open-ended valves, valves, flanges, connectors, piping, and associated equipment. Inspection frequency is based on facility PTE VOC: monthly for ≥25 tpy, quarterly for 2-25 tpy, with reduced frequencies for small business facilities. Inspections use OGI or Method 21 per the rule’s technology-neutral approach. |
| Leak definition and repair requirements | Leaks are defined as ≥500 ppm hydrocarbons for Method 21, or any visible emission for OGI. Identified leaks are repaired within 15 days of discovery. First repair attempt within 5 days. Delay of repair is documented with justification. Repaired components are re-surveyed to verify effective repair. |
| Alternative monitoring technology | If using alternative monitoring technologies (continuous monitors, satellites, drones, fenceline monitoring), operator has obtained NMED approval through an alternative monitoring plan per 20.2.50.116.D NMAC. Pre-approved technologies (LongPath, Project Canary, OGI-by-drone with conditions) are used per their specific approval requirements. 15-day advance notification to NMED is provided before first use of approved alternative technology. |
| Sight, sound, and smell inspections | Monthly audio, visual, and olfactory (AVO) inspections are conducted at all oil and gas facilities per 20.2.50.116. AVO inspections supplement instrument-based LDAR surveys. Findings are documented. Any leaks detected during AVO inspections initiate repair within the 15-day repair deadline. |
NMED Ozone Precursor Rule — Emission Sources
| Audit Item | Expected Finding / What to Evaluate |
|---|---|
| Storage tank emission controls | Storage tanks with PTE ≥2 tpy VOC (new sources) or ≥4 tpy VOC (existing sources) are controlled to ≥95% efficiency or route emissions to an enclosed combustion device achieving ≥98% efficiency. Tank emission calculations include flash, working, and breathing losses. Tanks below PTE thresholds still require AVO inspections. |
| Pneumatic controller and pump requirements | All pneumatic controllers at facilities in covered counties comply with 20.2.50 NMAC requirements. New controllers are zero-emission unless infeasible. Existing controllers are replaced on the phased compliance schedule. Pneumatic pump emissions are controlled or eliminated per the rule’s requirements. |
| Compressor and dehydrator controls | Centrifugal compressor wet seal emissions are reduced by ≥95%. Reciprocating compressor rod packing is maintained per schedule. Glycol dehydrators with PTE ≥2 tpy VOC control emissions to ≥95%. Dehydrator still vent emissions are routed to a control device. |
| Engine and turbine emission limits | Stationary engines and turbines at oil and gas facilities comply with 20.2.50.113 NMAC emission limits for NOx, CO, and VOC. Engine compliance is demonstrated through manufacturer certification, performance testing, or PEMS. Engine operating hours and emission records are maintained. |
| Pig launching/receiving and liquid loading | Pigging operations and hydrocarbon liquid loading/unloading at covered facilities control VOC emissions to ≥95%. Control is required for both new and existing sources. Pigging procedures minimize venting. Liquid loading operations use vapor-tight connections. |
EMNRD Methane Waste Rule — Gas Capture
| Audit Item | Expected Finding / What to Evaluate |
|---|---|
| Gas capture rate compliance | Operator’s current natural gas capture rate meets the annual capture requirement, progressing toward the 98% capture mandate by December 31, 2026. Baseline capture rate was established from Q4 2021 data. Annual capture rate increases follow the regulatory formula with higher increases required for operators starting from lower baselines. |
| Venting and flaring restrictions | Routine venting and flaring of natural gas is prohibited except in limited circumstances: emergency, malfunction, or specifically exempted situations. Flaring is required over venting when gas cannot be captured (except when flaring is technically infeasible). Emergency venting and flaring events are documented with cause, duration, and volume. |
| Natural gas management plan | New drilling permit applications include a natural gas management plan demonstrating how the operator will comply with capture requirements. Management plan addresses gas gathering infrastructure, processing capacity, and contingency measures. EMNRD has approved the management plan. |
| Gas capture data reporting | Gas capture data is reported to EMNRD as required, including volumes of gas produced, captured, vented, and flared. Data accuracy supports capture rate calculations. Measurement equipment (meters, estimation methods) meets EMNRD requirements. |
Recordkeeping and Reporting
| Audit Item | Expected Finding / What to Evaluate |
|---|---|
| NMED compliance records | Records required by 20.2.50 NMAC are maintained on site or at a central location accessible to NMED. Records include: LDAR inspection logs with dates, technologies used, components surveyed, leaks found and repaired; equipment inventories; emission calculations; control device monitoring data; engine records; and AVO inspection logs. Records retained for minimum five years. |
| EMNRD reporting compliance | All EMNRD/OCD reporting requirements are met: natural gas management plans for new permits, gas capture rate data, venting and flaring event reports, and compliance plan submissions (if capture rate target is not met). Reports are submitted through EMNRD’s designated reporting system. |
| Compliance plan (if required) | If the operator’s annual capture rate falls below the required level, a compliance plan has been submitted to EMNRD. Plan identifies specific actions to increase capture rate, timeline for implementation, and projected capture rates. EMNRD has assessed and accepted the compliance plan. |
| Dual-agency coordination | Compliance documentation is organized to satisfy both NMED and EMNRD requirements without duplication where data serves both programs. Both agencies’ contact information, inspection procedures, and reporting deadlines are understood by field and compliance personnel. Any notices of violation or compliance orders from either agency are addressed promptly. |
Corrective Actions
Common Issues and Responses
- LDAR inspections not meeting required frequency: Review PTE calculations for each facility to confirm the correct inspection frequency tier. Schedule overdue inspections immediately. Implement automated scheduling software. Consider third-party LDAR providers for surge capacity.
- Gas capture rate below target: Identify the largest sources of uncombusted gas (venting points, incomplete flaring, unconnected wells). Evaluate gas gathering capacity and processing availability. Develop and submit a compliance plan to EMNRD. Prioritize connecting unconnected wells and upgrading gas capture equipment.
- Non-compliant storage tanks: Calculate uncontrolled emissions for all storage tanks. Install vapor recovery or route emissions to control devices for tanks exceeding the applicable PTE threshold. Prepare or update STEM-equivalent documentation. Report controlled and uncontrolled emissions to NMED.
- Missing or incomplete records: Conduct a records gap analysis against both NMED and EMNRD requirements. Reconstruct records where possible from operational data. Implement a centralized recordkeeping system. Train field personnel on documentation requirements.
- Unauthorized venting or flaring: Cease unauthorized venting/flaring immediately. Investigate root cause (equipment failure, insufficient gathering capacity, lack of flare system). Document the event and report to EMNRD as required. Implement corrective actions to prevent recurrence.
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