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.

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“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.

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“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.

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“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.”

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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.

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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.

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“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.

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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.”

More oil and gas news:

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Oil and gas pipeline connecting Permian Basin to Eagle Ford in south Texas to be expanded

Permian Basin oil and gas companies work to address infrastructure needs

Adrian Hedden can be reached at 575-628-5516, achedden@currentargus.com or @AdrianHedden on Twitter.