Too far or not far enough? Industry, environmentalist unite to opposed oil and gas reforms
A series of oil and gas reforms contained in a New Mexico House bill passed its second committee Wednesday and headed to the House Floor, but environmentalists argued recent amendments stripped language needed to protect New Mexicans from the impacts of fossil fuels.
House Bill 133 would increase several fees oil and gas companies pay to do business in New Mexico, but the amended version that passed the House Judiciary Committee, on 7-4 vote, saw the removal of language to increase setbacks for oil wells from bodies of water and residences.
Under the latest version of the bill “blanket bonding” rates operators pay on all of their wells for cleanup should any of them be abandoned would increase from a cap of $250,000 to $10 million via the bill.
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HB 133 would also allow the Oil Conservation Division (OCD) to deny well transfers, typically when a larger company sells an older, less productive well to a smaller company, if either have a history of environmental violations or are unable to provide required financial assurances.
It would also codify into law a policy at the OCD that requires all operators in the state capture 98 percent of produced gas by 2026 and increase various penalties for environmental violations and those that risk human health.
HB 133 passed the House Judiciary Committee on a 7-4 vote and was sent to the House Floor for consideration by the full chamber.
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During the Judiciary Committee hearing sponsor Rep. Kristina Ortez (D-42) of Taos said HB 133 represented “important and timely” updates to the Oil and Gas Act amid “rapid growth” in fossil fuel production in the state.
“These targeted updates are designed to ensure that oil and gas development, which is critically important to the state, is done responsibly and that the agencies with oversight responsibility have the tools necessary to ensure compliance,” she said before lawmakers.
Ortez acknowledged the economic benefits of oil and gas to New Mexico, estimated to make up almost half of the state’s budget and believe a key component of a recently estimated $3.5 billion surge in “new money.”
She said the setback language was removed, along with other fee adjustments, in the latest bill as a compromise with the industry.
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“But we also owe a duty to our communities to make sure that oil and gas development occurs responsibly, and when it is concluded, its on-the-ground impacts are addressed,” she said.
OCD Director Dylan Fuge said his agency supported the changes made in HB 133 as it would allow the Division broader authority to curb pollution and hold operators accountable to state law.
But the added costs could unfairly impact small oil and gas producers in New Mexico, said Jim Winchester, president of the Independent Petroleum Association of New Mexico, which he said “strongly” opposed the bill during the meeting.
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“If with well-intentioned, 11th-hour changes, it will disproportionately hammer our small operators who do play by the rules and responsibly produce oil and gas in New Mexico,” Winchester said. “In general, this bill is too vague and too wide-spreading, especially for a 30-day session.”
Opposition was also voiced by oil and gas operators and the Greater Albuquerque Chamber of Commerce for impacts to the industry, and many environmental advocates at the meeting said the bill did not do enough to mitigate pollution.
The New Mexico Oil and Gas Association, which represents many of the larger oil and gas companies in the state, did not oppose the bill. Spokesman Frederick Bermudez said the Association supported the recent changes to the legislation.
"While perfect legislation is hard to achieve, this bill has come a long way since it was first introduced and truly represents a collaborative approach," he said in an emailed statement.
"The oil and gas industry continues to safely provide sustainable, reliable, and affordable energy production, and we always appreciate opportunities to work with the Oil Conservation Division and other stakeholders on matters that affect our industry."
Bill ‘utterly fails’ to protect New Mexico from pollution, groups say
While some environmental groups supported the bill and cheered its progress, others said its lack of the previous setback language put New Mexico's waters and residents at risk.
Ennedith Lopez, campaign manager with Youth United for Climate Crisis Action said HB 133 appeared to be written by industry leaders and did not have input from indigenous communities or those dwelling alongside oil and gas operations.
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“As a result of the exclusion of critical voices throughout the process, the bill lacks necessary protections for Indigenous, frontline and youth communities,” Lopez said. “We need our state leaders to stand up for the protection of our health, our land and our precious water.”
Attorney Gail Evans with the Center for Biological Diversity argued the legislature should take up a trio of bills, House Bills 30, 31 and 32, which would restrict the use of freshwater in oil and gas drilling, add penalties specifically for oil and wastewater spills, and place a 1-mile setback on oil wells near schools.
Those bills were pre-filed ahead of the ongoing 2024 Legislative Session concluding Feb. 15, and were not included, unlike HB 133, in Gov. Michelle Lujan Grisham’s executive messages ordering lawmakers to consider various bills meaning, Evans said, the bills were unlikely to be heard this year.
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“This bill utterly fails to impose any real restrictions on the oil industry and does nothing to protect frontline communities from the toxic pollution they’re exposed to every single day,” Evans said of HB 133.
She criticized state leaders for pushing HB 133 as one of the few oil and gas reforms offered by lawmakers this year, calling for stronger action to curb pollution in New Mexico,
“Gov. Lujan Grisham did our state a grave disservice by blocking bills that would have protected New Mexicans from oil industry pollution,” Evans said. “Once again, our state’s politicians have surrendered to the oil and gas industry, and the pollution crisis will continue to make our residents sick.”
The legislation was supported by the Western Environmental Law Center, with Senior Attorney Tannis Fox contending it provided needed protection from orphaned wells, and air pollution she said was caused by the industry.
“They’ve put corporate profits over the interests of New Mexicans who have suffered serious public health burdens from oil and gas pollution and harm to their lands and waters,” she said of the industry. “The least they can do is provide assurances that they’ll clean up their mess without burdening taxpayers and be a good neighbor to people and communities. The time for action is now.”
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: Oil and gas reforms head to New Mexico House Floor despite opposition
