New Mexico’s Oil and Gas Ozone Precursor Rule – the Compliance Deadlines are Coming Up!
Posted: November 6th, 2023
Authors: Madison J.
The New Mexico Environment Department (NMED) finalized the Oil and Gas Sector – Ozone Precursor Pollutants Rule (NM Oil and Gas Rule) back in August 2022 under New Mexico Administrative Code (NMAC) 20.2.50. The NM Oil and Gas Rule applies to several oil and gas sector operations located in Chaves, Dona Ana, Eddy, Lea, Rio Arriba, Sandoval, San Juan, and Valencia Counties. Affected facilities include the following crude oil and natural gas production and processing equipment:
- Those associated with operations that extract, collect, separate, dehydrate, store, process, transport, transmit, or handle hydrocarbon liquids or produced water in the covered counties; and
- Are located at well sites, tank batteries, gathering and boosting stations, natural gas processing plants, and transmission compressor stations, up to the point of the local distribution company custody transfer station.
Exceptions can only be determined once facility-wide potential to emit (PTE) has been calculated. Read on to review the upcoming compliance requirements.
Rule Summary
The NM Oil and Gas Rule requires volatile organic compounds (VOC), nitrogen oxides (NOx), and carbon monoxide (CO) reductions from several types of equipment at oil and gas facilities. As one of the first steps, all facilities must calculate their facility-wide PTE and have it certified by a professional engineer – this is due as soon as August 2024 (see upcoming requirement dates below).
Emissions standards vary based on facility type and equipment type, with applicability mostly determined based on an equipment’s PTE. Specific requirements are outlined for the following:
- Engines and Turbines
- Compressor Seals
- Control Devices
- Equipment Leaks and Fugitive Emissions
- Natural Gas Well Liquid Unloading
- Glycol Dehydrators
- Heaters
- Hydrocarbon Liquid Transfers
- Pig Launching and Receiving
- Pneumatic Controllers and Pumps
- Storage Vessels
- Well Workovers
- Produced Water Management Units
- Flowback Vessels and Preproduction Operations
Some of the more impactful changes associated with the NM Oil and Gas Rule are the requirements to implement a data system and the standards and monitoring requirements for fugitive emissions sources and pneumatic equipment. The data system must be capable of tracking monitoring data and events and producing compliance data reports (CDR). Depending on facility type, production levels, and PTE, monitoring of fugitive emissions will need to be conducted utilizing an audio, visual, olfactory (AVO) technique and instrument monitoring utilizing optical gas imaging or following U.S. EPA’s Method 21.
By January 1, 2024, depending on the number of non-emitting controllers present at a site and the type of facility, 25-80% of emitting pneumatic controllers must be replaced. That percentage of replacements only increases over time, with additional compliance deadlines in January 2027 and January 2030.
Requirements for engines and turbines are outlined in NMAC 20.2.50.113. NMAC 20.2.50.113 applies to portable and stationary natural gas-fired spark ignition engines, compression ignition engines, and natural gas-fired combustion turbines located at well sites, tank batteries, gathering and boosting stations, natural gas processing plants, and transmission compressor stations. These engines and turbines will be subject to emissions standards for NOx, CO, and VOC that come along with monitoring and recordkeeping requirements.
Small Business Exclusion
NMAC 20.2.50.7S(1) defines small businesses as a source that is independently owned or operated by a company that is a not a subsidiary or a division of another business, that employs no more than 10 employees at any time during the calendar year, and that has a gross annual revenue of less than $250,000. Employees include part-time, temporary, or limited-service workers. Small businesses are subject to certain parts of the NM Oil and Gas Rule and must maintain safe operations, conduct monthly sight, sound, and smell inspections of equipment, and conduct leak detection and repair on a frequency dependent upon the PTE [NMAC 20.2.50.125 for Small Business Facilities and NMAC 20.2.50.127 for Flowback Vessels and Preproduction Operations].
Upcoming Requirements
The 2024 upcoming requirements are provided in the table below. Note that compliance deadlines vary for new sources (vs existing sources) and continue through at least 2030. Facilities must develop compliance strategies as soon as possible to be prepared for 2024 and 2025 deadlines.
| NMAC | Equipment Type | Compliance Date | Requirement Details |
| 113 | Existing natural gas‐fired turbines operated 500 or more hours per year | 1/1/2024 | 30% of inventoried list must meet standard as indicated on created schedule. |
| 113 | Existing natural gas‐fired turbines operated 500 or more hours per year | 6/30/2024 | Initial compliance test using EPA Reference Methods or FTIR must be completed. |
| 116 | Existing wellhead‐only facilities | 1/1/2024 | Conduct OGI or EPA Method 21 inspections at 30% of these facilities. Inspections must cover thief hatches, closed vent systems, pumps, compressors, pressure relief devices, open‐ended valves or lines, valves, flanges, connectors, piping and associated equipment. |
| 122 | Natural gas‐driven pneumatic controllers | 1/1/2024 | Convert 25‐80% to non‐emitting controllers. Percentage depends on total historic percentage of non‐emitting controllers and depends on the type of facility. |
| 112 | Owners/operators of all affected sources | 7/1/2024 | Generate first compliance database report on assets under owner/operator control. |
| 112 | Owners/operators of all affected sources | 8/5/2024 | Develop and implement a data system capable of storing required information for each source, uploaded within 3 days of the monitoring event. Sources must use NMED approved technology for time/date stamp and GPS location requirements. |
| 114 | Existing centrifugal compressors with wet seals | 8/5/2024 | Control VOC emissions from fluid degassing system by at least 95%. |
| 114 | Existing reciprocating compressor | 8/5/2025 | Reciprocating compressor rod packing must be replaced after every 26,000 hours of operation or every 36 months [8/5/2025]. Compressor hours of operation toward the first replacement of the rod packing began at the effective date of the Rule. |
| 116 | Existing well site or standalone tank battery | 8/5/2024 | Conduct OGI or EPA Method 21 inspections of thief hatches, closed vent systems, pumps, compressors, pressure relieve devices, open‐ended valves or lines, valves, flanges, connectors, piping and associated equipment. |
| 117 | Natural gas wells liquid unloading operations | 8/5/2024 | Implement best management practices to minimize emissions. |
| 118 | Existing glycol dehydrators with PTE equal to or greater than 2 tpy VOC | 8/5/2024 | Achieve minimum combined capture and control efficiency of 95%. If a combustion control device is used, the combustion device must have a minimum design combustion efficiency of 98%. |
| 120 | Hydrocarbon liquid transfers at existing well sites, standalone tank batteries, gathering and boosting stations with one or more controlled storage vessels, natural gas processing plants, transmission compressor stations | 8/5/2024 | Control VOC emissions by at least 95% during transfer. If using a combustion control device, it must have a minimum design combustion efficiency of 98%. |
| 121 | Pipeline pig launching and receiving operations with PTE equal to or greater than 1 tpy VOC | 8/5/2024 | Capture and reduce VOC emissions by at least 95%. If a combustion control device is used, the combustion device must have a minimum design combustion efficiency of 98%. |
Note: Compliance deadlines vary for new sources (vs existing sources) and continue through at least 2030. Refer to New Mexico Environment Department compliance timeline document for more information.
ALL4 has permitting and compliance experience in New Mexico and can help facilities strategize compliance with the NM Oil and Gas Rule. In addition to determining and calculating PTE for facilities, ALL4’s Digital Solutions Practice can help facilities streamline compliance tracking. If you or your company are looking for guidance complying with the NM Oil and Gas Rule, please reach out to Madison Jones at mjones@all4inc.com or 678.293.9435.
