Regulating Natural Gas Venting and Flaring as Waste: A Review of the New Mexico Approach

Abstract

This essay interrogates the regulation of routine venting and flaring of natural gas as a source of prohibited "waste," using New Mexico's recently adopted Waste Rule as an example. It begins with a survey of both the environmental and economic benefits to be achieved by limiting or eliminating venting and flaring and the direct and indirect costs of doing so, including the forgone opportunity to produce crude oil. Then the essay explains the common law and statutory definitions of "waste" to demonstrate that the concept implicates a balancing of the costs and benefits of any given production practice to determine whether it is justified or wasteful. Finally, the essay applies existing law to routine venting and flaring of associated gas in the Permian Basin, which the Waste Rule has effectively banned. The result of this analysis is that the Waste Rule prohibits some venting and flaring that would not necessarily constitute waste under existing law. In conclusion, the essay argues that waste is the wrong legal rubric for efforts to reduce or eliminate methane emissions from oil and gas operations and that policymakers should instead seek legal means that are better aligned with their true purpose: fighting climate change.

Published in Special Issue: Law and Policy for Gas Flaring in a Low-carbon Economy.