What oil and gas legislation is expected as lawmakers allocate billions from the industry?
Oil and gas money is all over the New Mexico Roundhouse. It accounts for 35% of the state budget proposal this year, according to the Legislative Finance Committee. It’s also in the campaign coffers of politicians on both sides of the aisle. It’s within this landscape that debates around expanding or restricting fossil fuel production take place. Capital & Main’s Jerry Redfern has reported on these legislative efforts, including making changes to an act that’s been on the books since 1935.
JERRY REDFERN: The Oil and Gas Act is actually really important, and it's something that I think most people don't even know exists. It's the foundational law that protects the state's most valuable mineral resource. You know, oil and gas. And so, these reforms to the act are looking to shift that focus a bit to cover protections for people and the environment. And also change the makeup of the governing body and the head of the Oil Conservation Division to allow greater changes there, and a wider range of people to be working on this sort of legislation and these rules.
KUNM: We also often hear that New Mexico, as a top oil and gas producing state, has strict emissions rules. Even Governor Michelle Lujan Grisham has been on the international stage discussing it, like the last two UN climate change conferences. But you report that the agencies that are charged with enforcing these emissions rules are understaffed.
REDFERN: And again, it's another record budget year. Yet, it's really difficult to get the legislative side of the funding equation to cough up those few million bucks to pay for the enforcement, which is people on the ground looking for spills and emissions from oil and gas wells. They also need, like, the legal side of it. Because when you find these violations, that's a legal violation. So, you need to have lawyers and office staff who are ready to go up against some of the largest companies on the planet. So that's — there's a couple of different steps there. And they're very important.
KUNM: What you're saying is it's not all that expensive to up the enforcement. Is it because of oil and gas lobbying? Because predominantly oil and gas industry funding would go towards it? What's the hang up?
REFERN: I think there are multiple hang-ups. I think everything you said is correct. I think there are all sorts of different things that go along with it. Probably the biggest thing about it is they're very afraid of somehow offending oil and gas operators, and having them pull out or stop production here. I mean, the Permian Basin is the largest oil producing region in the United States, if not the planet depending upon how you count it. It's very unlikely that anybody is going to stop production down there because some new rules came in that tell them you have to better monitor what comes out of the ground.
KUNM: Right. And the rules are there. It's just, you know, some new rules are getting enforced, right?
KUNM: Well, if we could move towards hydrogen. So, this was a big conversation in last year's legislative session, though all the bills that would have built up that industry here in New Mexico failed. There was considerable pushback from environmental advocates. You report that Rep. Patty Lundstrom told her colleagues in the Legislative Finance Committee earlier this month to "saddle up" for another round of hydrogen this session. What should we be looking for? What should we be saddling up for?
REDFERN: What's likely going to happen is a raft of proposals for tax breaks, essentially, for hydrogen production, for hydrogen transportation, like building pipelines and the like. And then for its end uses as well, particularly for a hydrogen power plant project. These things were all proposed the last time around, and I'd be really surprised if we didn't see that come back around again. You know, a really key thing about hydrogen is that it is — all by itself, if you just look at the hydrogen — it's a very clean fuel. The really big question is hydrogen supply chain. And, here in New Mexico, all the talk really when you get right down to it is talking about making hydrogen from natural gas, where you crack those hydrogen atoms off of a big complex natural gas molecule. And I guess, you know, the federal government says that if that supply side of it is clean, you can call your hydrogen clean as far as they're concerned, and have access to, you know, billions of dollars.
KUNM: But that hasn't been the case in New Mexico, no? I mean, we got a lot of leaks.
REDFERN: Right. Well, that's exactly what we were just talking about. This is this issue with enforcement that keeps coming up. And you're not going to be able to, I think, really crack that nut until you have enforcement.