2024 Legislative session wrap up: Here's how energy and environment bills fared

Seven hundred seventy-seven pieces of legislation were introduced during the 2024 Legislative Session in New Mexico, as lawmakers grappled over the state’s budget while also looking to enact policy aimed at curbing the impacts of oil and gas.

Energy is always a hot topic among lawmakers when they convene each January for the annual sessions, and despite this year’s 30-day session’s focus on budget, many policy bills were brought forth by Democrats in attempts to regulate oil and gas and prop up new forms of energy like wind, solar and geothermal power.

The majority party was successful in some of its attempted reforms, but others were either voted down or stuck in committee when the session ended Feb. 15.

Here are the key energy and environment bills sponsored during the session and how they fared.

More: 'Renewable' geothermal energy boosted by bill passed by New Mexico House

What failed?

Lujan Grisham’s water supply proposal blocked, for now

In late 2023, Gov. Michelle Lujan Grisham announced a “Strategic Water Supply” proposal that would appropriate $500 million so the state could buy treated oilfield waste fluids and brackish water from the industry, then sell the water to other new industries coming to the state.

This was intended to support water-intensive industries like hydrogen power which Lujan Grisham wants to attract to New Mexico, but was opposed by environmental groups who view oil and gas wastewater, known as produced water, as a hazardous product that could never be fit for other uses.

The funding was included in a capital outlay spending package but was removed toward the end of the session and introduced – albeit at only $100 million – in the New Mexico Senate via Senate Bill 294.

More: 'Clean fuels' bill advances in New Mexico Senate, to make oil companies pay for pollution

SB 294 also removed language allowing produced water to be included in the program, opting for the more general term “brackish water.”

The bill was advanced by the Senate Conservation Committee with no recommendation and held up in the Senate Finance Committee as the session closed.

Lujan Grisham signaled she would continue to champion the initiative during a press conference at the session's outset.

More: It could become more expensive to drill for oil on New Mexico state land, should bill pass

Oil and Gas Act reforms stalled after negotiations in the House

House Bill 133 was intended to amend the Oil and Gas Act, which has governed the industry since being passed in 1935 but wasn’t update in decades, to increase penalties and costs for companies to do business in New Mexico.

The bill also increased bonding requirements operators pay to fund clean up of abandoned wells, added setbacks for fossil fuel facilities from homes, bodies of water and other sensitive areas and codified into law a requirement that producers capture 98 percent of natural gas generated at well sites by 2026.

As HB 133 moved through the House Energy and Natural Resources and Judiciary committees, it was altered to remove the set back language and add a tiered approach to the bonding rules. This allowed smaller operators to pay less into the bonding, with the cap climbing based on how many wells a company owned in the state.

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Despite these changes, via negotiations between lawmakers and industry, the bill was held up on the House Calendar without receiving a vote from the full chamber.

Attempt to raise state land oil and gas royalty rate stuck in Senate

Democrats for years called for an increase in the royalty rate oil companies pay on the value of fossil fuels they produce on State Trust land.

The rate sits at 20 percent of the revenue, with lawmakers and advocates arguing it should be increased to 25 percent.

More: $300M needed for New Mexico land conservation; Supporters argue for funding in budget bill

A bill to do that was introduced in the New Mexico House as House Bill 48, and it was estimated to generate up to $75 million more for the Land Grant Permanent Fund, which is used to fund services like public schools and roads.

The bill was supported by the New Mexico State Land Office, which oversees the fund and operations on state land, but it was blocked by inaction in the Senate Finance Committee after passing the House late in the session.

What passed?

Clean Fuel Standard will curb greenhouse gas from cars and trucks

House Bill 41 called on the New Mexico Environmental Improvement Board (EIB) to draft rules to establish a “clean fuel standard” for transportation fuels, likely requiring more vehicles in New Mexico have low- or zero-emission or electric motors.

More: Lawmakers look to send more state funds to clean up New Mexico's abandoned oil wells

HB 41, despite opposition from Republicans arguing it could increase fuel prices paid at the pump, passed the House on a narrow 36-33 vote and the Senate 26-15.

Geothermal industry boosted by bill

House Bill 91 will send $25 million from the State’s General Fund to two newly created funds to finance geothermal projects.

Geothermal energy uses heat pulled from underground to the surface, generating electricity and viewed as a renewable energy and alternative to fossil fuels.

HB 91 enjoyed strong, bipartisan support in passing the House 60-5 and the Senate unanimously.

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$300 million going to land conservation

The centerpiece of the legislative session was House Bill 2 which detailed New Mexico’s budget for the next fiscal year.

The version passed by lawmakers included $300 million for the Land of Enchantment Legacy Fund created by a bill last year.

The money would be used statewide for wildlife and land improvements and can be used as matching funds to leverage federal grants.

More: 'Fundamental disagreement' puts GOP and 'bureaucrats' in Santa Fe at odds for conservation

Tax package supports renewable energy, electric vehicles

A suite of tax bills was passed by lawmakers to provide credits and other benefits to those using renewable power, electric vehicles and other “clean energy” approaches.

This included income tax credits for those buying electric vehicles, installing solar panels or using geothermal power.

Industrial revenue bonds were also approved to support energy storage needed for renewable energy generation, and tax credit sunsets for taxable year 2023 were repealed.

Adrian Hedden can be reached at 575-628-5516, achedden@currentargus.com or @AdrianHedden on the social media platform X.

This article originally appeared on Carlsbad Current-Argus: Energy reforms get mixed results in 2024 NM legislative session