A natural gas plant near Moab could help curb flaring on the Navajo Nation

Lisbon Valley • When a natural gas processing plant in northwest New Mexico shut down in December, jets of flame appeared on a mesa above the Navajo Nation community of Montezuma Creek, Utah, cutting into the blue sky by day and burning through the night.

The process, known as flaring, is sometimes used to burn off natural gas that is produced in oil fields. It reduces the amount of methane, a potent greenhouse gas, that’s released into the atmosphere by converting it to less-harmful carbon dioxide. But it can also be hard to ignore for people living near the flares.

“[There has been] continuous flaring, all the time, 24 hours a day, seven days a week since [the plant closure]," said Sam Dee, a Montezuma Creek-based consultant who has been working with the Navajo Nation to lobby for increased regulations on flaring and methane emissions.

Dee, who worked in the oil and gas industry for close to 40 years before he retired in 2016, said he’s heard concerns from community members about the flaring, including impacts on air quality and human health.

“Community members are ailing from the flaring and venting because of the odor," he said. “It’s a hazard to their health. People complain about being nauseated and having headaches.” Those symptoms can be caused by exposure to the hydrogen sulfide, which Dee said is sometimes present in vented natural gas.

Elected tribal officials in the Aneth Chapter of the Navajo Nation held a meeting last month after residents and elders expressed concerns about flaring near Navajo communities.

“We don’t like to flare, and we’re very aware of people’s concerns. We are working hard to get them addressed because I know people live out among the oil production out there,” said Jeff Roedell, Elk Petroleum’s Four Corners business unit manager, who noted that his company is a major area employer.

Regular flaring in the Montezuma Creek area became necessary for Elk Petroleum, San Juan County’s largest local oil and gas producer, after the plant shutdown left natural gas stranded in pipelines from northwest New Mexico across southeast Utah. Since then, Elk has been working to find a solution.

(Courtesy of Paul Martini) Bluff-based photographer Paul Martini captured the glare of a natural gas flare (left) near Montezuma Creek during a thunder storm in 2019.

Both local concerns and the revenue lost from burning the natural gas, as opposed to selling it on the market, have motivated Elk and other producers to consider partnering with a recently reopened natural gas processing plant in Utah.

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The Lisbon Valley Gas Plant is located in the redrock desert 30 miles southeast of Moab and is capable of processing greater volumes of gas than the closed New Mexico plant. Plus, there is already a third-party pipeline connecting it to the Montezuma Creek area. Roedell said agreements are close to being signed that would end the need for most of Elk’s flaring on the Navajo Nation.

“It’s really a matter of simply getting the agreements in place and turning the valves,” said Todd Brooks, CEO of Paradox Resources, which owns the Lisbon Valley plant.

After decades of expansions that would cost an estimated $400 million to build today, the facility is capable of separating out a number of marketable gases — butane, propane and helium — before sending methane into a regional pipeline system.

(Zak Podmore | The Salt Lake Tribune) The Lisbon Valley Gas Plant south of Moab processes natural gas from the Paradox Basin. Feb. 25, 2020.

When plant manager Coy Young was hired by the facility’s then-owner Encana in 2006, he said its primary purpose was to remove the acidic gases like hydrogen sulfide, which are naturally present in the area’s natural gas reserves and cause pipeline corrosion.

Since then, the price of natural gas has fallen dramatically, due in part to the national fracking boom, and the Lisbon Valley plant operators have found ways to sell more of the byproducts instead of burning them off or injecting them back underground.

The plant has seen a series of owners since the 1990s, and it was shut down completely by CCI — the same company that shut down the New Mexico plant — in late 2016 before being purchased by the Houston-based Paradox Resources the following year.

The plant recently added a unit that can extract helium, which is used in the medical industry and is in shorter supply globally than other products. Paradox Resources believes the addition will add more financial stability through market fluctuations.

“We have more than tripled production since purchasing the assets,” said Brooks, who oversaw the plant’s reopening in 2019. The Lisbon Valley plant is capable of processing tens of millions of cubic feet of gas per day from Paradox Resources-owned gas fields in southeast Utah and southwest Colorado, and Brooks hopes the plant will also process more gas from other producers.

(Courtesy of Paradox Resources) Map of pipeline corridors and helium reserves in the Paradox Basin and Four Corners region.

Back taxes and climate concerns

San Juan County has long relied on the extractive industry to support its tax base, and its top taxpayers include Elk Petroleum, a copper mine, a uranium mining and milling company and several pipeline companies. But the county has had trouble collecting some of those taxes in recent years. The Lisbon Valley copper mine, which is located near the gas plant, owes over $1 million in back taxes.

And the former owner of the Lisbon Valley plant and associated pipelines, CCI, was delinquent on its taxes when the facility was bought by Paradox Resources. The company currently owes more than $550,000 in back taxes, according to reports obtained from the San Juan County Treasurer’s Office, but it will likely pay less than half that after it finishes negotiating valuations with the county. Company officials said the treasurer’s report does not reflect the fact that the plant was closed for two years and needs to be updated.

This is happening as the county, already the highest taxed in the state, is planning another tax hike in 2020. Centrally assessed property values have been falling across the county, and industry has been volatile. Energy Fuels, a uranium company that was the county’s largest private employer, laid off a third of its workforce at its mill and mines in January. Elk Petroleum filed for Chapter 11 bankruptcy in May, prompting a restructuring.

But Brooks, the Paradox Resources CEO, said oil and gas could once again be a key economic driver in the county in coming years with the Lisbon Plant playing a central role to help facilitate development. Paradox Resources currently employs 40 people locally, a number that could rise.

The Paradox Basin has long been “overlooked,” Brooks said, referring to the geologic formation under the Four Corners that’s rich in oil and gas deposits. “But I think its time is coming within the context of where industry is ... in relation to 3D seismic, 3D reprocessing and unconventional development [like horizontal drilling]."

Last year, the U.S. Department of Energy and the University of Utah launched an $8 million study to test oil and gas potential in the Paradox Basin, where resources have proved difficult to access with conventional drilling methods.

(Zak Podmore | The Salt Lake Tribune) The Lisbon Valley Gas Plant south of Moab processes natural gas from the Paradox Basin. Feb. 25, 2020.

While a potential boon to the area economy, increased fossil fuel production in the basin is raising concerns from a climate change perspective.

“If you drill it, it’s going to release methane,” warned Jesse Prentice-Dunn, policy director for the Center for Western Priorities, which released an analysis of oil spills and methane leaks in late February. “Research shows increasingly that leaks and flares of methane are a real driver of climate change and are really damaging when it comes to the climate.”

“This year, the data in New Mexico, for example, shows that oil and gas companies reported releasing three times as much methane as they did the year prior,” he continued. “All the while, technology is supposedly getting better as new systems are in place. But what we see is really unchecked releases of methane into the atmosphere…. In a place like the Four Corners region where you’ve already got levels of methane that are literally detectable from space, that’s a problem.”

Young, the Lisbon Valley plant manager, said all of Paradox Resources’ systems are carefully monitored for leaks. As leaks occur, they are reported to the Utah Department of Environmental Quality and are available in a public database.

In October, the Lisbon Valley Plant was hit with a $9,600 penalty from the DEQ for exceeding standards for carbon monoxide and nitrogen oxide emissions, and a problematic stack was later taken offline, according to state records.

Over the past century, San Juan County has produced more oil than any other county in Utah, though production has fallen in recent years and Duchesne and Uintah have been the clear leaders. San Juan County is also poised to produce significant amounts of renewable energy with a 60-megawatt wind farm already in place in Monticello and a 70-megawatt solar project being planned by the Navajo Nation.

Dee, the Navajo consultant, said any reduction in flaring on tribal land would be welcome, including the plan to send the stranded natural gas to the Lisbon Valley plant. But Dee, who has traveled to Washington, D.C., to advocate for greater methane restrictions and works alongside multiple agencies within the Navajo Nation, would like to see more policy action to regulate methane emissions.

“We’re not anti-oil and gas,” he said, but more could be done to “control the flaring and venting.”

Zak Podmore is a Report for America corps member and writes about conflict and change in San Juan County for The Salt Lake Tribune. Your donation to match our RFA grant helps keep him writing stories like this one; please consider making a tax-deductible gift of any amount today by clicking here.