New Mexico’s latest hydrogen bill dies while Oil and Gas Reform Act advances
Jerry Redfern, Capital & Main
A bill to revise New Mexico’s 88-year-old oil and gas law passed this week at its first hearing in committee after a direct party vote, while a bill that would have encouraged hydrogen production from natural gas disappeared from the Legislature’s calendar .
The latest version of the Advanced Technology Energy Act, HB12, died quietly over the weekend without even getting a committee hearing after its sponsors learned tribal leaders across the state strongly opposed it. Mark Mitchell, chair of the All Pueblo Council of Governors (representing 19 pueblos in New Mexico and one in Texas), sent a letter detailing the group’s dismay to four of the five sponsors of the bill. He said tribal leaders are concerned about the impact of energy projects using advanced technology “on water, groundwater, cultural resources and sacred sites.” He then recommended submitting the bill until the legislature dealt with tribal issues. While Mitchell called the bill “well-intentioned,” he recommended that lawmakers better explain the dangers and communicate clearly with tribesmen ahead of the next legislative session.
HB12 promoted hydrogen evolution from fossil fuels such as natural gas, as well as nuclear power and carbon sequestration systems, all of which were deeply unpopular with New Mexico’s environmental and frontline communities. One of the original sponsors of the bill was Rep. Patty Lundstrom (D), who tried to push hydrogen bills through last year’s legislature as well – and all failed. In a surprise move early in this year’s session, the House Speaker ousted her from the powerful chair of the Legislative Finance Committee and replaced her with Rep. Nathan Small (D), another HB12 sponsor. Both received substantial campaign funds from oil and gas companies in the last election.
Gov. Michelle Lujan Grisham, who received more oil and gas money in the last election than any other Democrat in the state, is also a fan of hydrogen fuels after she launched the proposal for an interstate hydrogen hub that would break away from the northwestern natural gas fields of New Mexico extending into Wyoming.
“After a summer of fires and floods and the impact of climate change on our state and a $3.6 billion budget surplus, we should invest heavily in climate solutions.”
~ Camilla Feibelman, Sierra Club, Chapter of Rio Grande
This year’s bill combined energy development with provisions from an earlier bill, HB188, which created an economic transition department to help oil and gas workers transition to new, safer, more secure jobs outside of industry. Rep. Angelica Rubio (D) was an initial sponsor and author of HB188 and a co-sponsor of the Combination Act until hearing Friday that tribes opposed it. “We had to take the language of 188 out of the advanced technology legislation because I just didn’t feel right moving forward without tribal support,” she says. “Those of us who promoted the legislation … understood that this was what had to happen,” says Rubio. “It wasn’t a difficult decision.” And she received the call from the tribal council for further tribal consultations. “I certainly heard that loud and clear,” she says.
The House of Representatives’ proposed budget to fund next year’s state operations has already allocated $50 million to the Department of Economic Development for advanced technology energy projects. This budget proposal is currently under review in the Senate. Without HB12: “I’m not sure what this is supposed to fund [$50 million] for what purposes and with what oversight would come in,” says Camilla Feibelman, director of the Rio Grande Chapter of the Sierra Club. She hopes it could be repurposed to fund five other climate justice bills, including Rubio’s HB188, SB5 on climate resilience, SB169 for a climate investment center, HB365 for geothermal investments, and HB142 to rehabilitate the San Juan power plant and its coal mine. “After a summer of fires and floods and the impact of climate change on our state and a $3.6 billion budget surplus, we should invest heavily in climate solutions,” she says.
Rubio remains optimistic that what’s left of HB188 still has legs even as the legislature enters its final, harried weeks. “We had nothing but support for our part of the legislation” to help oil and gas workers transition to new jobs, she says. Funding issues have yet to be resolved, and she worked Wednesday night to figure out next steps. “Hopefully we’ll have a win for 188 at the end of the session,” she says.
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The bill updating New Mexico’s oil and gas law fared better this week. SB418 would revise the original 1935 statute and fundamentally reform the work of the Oil Conservation Division, the state’s primary enforcement agency for oil and gas fields. It includes a number of changes, including introducing social and environmental justice safeguards for communities living near oil and gas wells; revising the composition of the Oil Conservation Commission, which governs the OCD; Removal of well commitment restrictions to allow the state to recoup the full cost of plugging and rehabilitating old wells; implement well setbacks requirements of houses; and the lifting of fine limitations for violations. The legislation would represent the most significant update to the law since its passage.
In SB418’s first hearing on Tuesday, Senate Committee on Conservation Committee Chair Liz Stefanics (D) kept public comments to a minimum and expedited the process as the Legislature rushes toward its closure, but frustrated some in the online audience. The bill’s sponsor, Senator Leo Jaramillo (D), and Tannis Fox, senior counsel for the Western Environmental Law Center and one of the bill’s lead authors, posed a surprisingly short series of questions — surprising given that oil and gas legislation is often too long, discursive comments led by industry supporters.
Opponents all said the legislation would hamper the lucrative oil and gas industry, which funds more than a third of the state budget. Perhaps the most unexpected testimony against the law came from Mike Miller, who oversees governmental affairs for the Permian Basin Petroleum Association, a group that does not normally call for increases in oilfield enforcement personnel and funding. “According to their own statements [OCD] is significantly underfunded and understaffed,” he said. “Wouldn’t it make more sense to have the department fully funded and staffed to carry out the obligations they’ve already had?”
For years, both the OCD and the New Mexico Environment Department have dealt with chronic underfunding that is hampering their ability to enforce the oil and gas pollution regulations required by the Legislature and the Governor. The first general funding bill, presented to the House at the start of the session, offered only fractions of the budgets requested by the agencies. After the committee hearings, the House of Representatives sent an updated funding bill to the Senate with more money for OCD but no additional funding for NMED’s oilfield enforcement work. The Senate committees have yet to deliberate on the funding bill.
“This bill is about balance and modernization. It’s not about killing oil and gas.”
~ Tannis Fox, Western Environmental Law Center
Government agencies have provided some of the strongest support for updating the Oil and Gas Act. “The Public Land Commissioner strongly supports this bill,” said Ari Biernoff, general counsel with the New Mexico State Land Office. “It’s high time frontline communities were brought to the table.” And in a fiscal impact report prepared by the Legislative Finance Committee and submitted to the Legislature, the state’s Indian Affairs Division said that the Failure to pass the bill would prevent tribal governments and entities from “identifying and addressing current and historical environmental injustices and injustices in the operation and regulation of oil and gas.”
The longest line of questions came from Senator Joseph Cervantes (D), who went through much of the bill line by line, dissecting loose language, mostly concepts that define social justice and frontline communities. He called part of the bill “the worst legal writing I’ve read in 23 years.” Despite this, he and the committee ultimately voted to refer the bill to the Senate Judiciary Committee — which Cervantes chairs — for further debate.
“I’m all for improvement,” says Fox, and “I’ve heard about it [Cervantes] that we share the same goal of protecting environmental justice communities.” However, she did not agree with everything he said about the wording of the bill. “As a colleague at the Bar Association, I have to disagree [his] Characterizing … that there are no broad concepts in the law,” she says. Defining new concepts that did not exist in 1935 “is the stuff of law and advocates and judgment”.
Fox says the bill charts a new path for the state’s relationship with its most lucrative industry. “This bill is about balance and modernization. It’s not about killing oil and gas,” she says. “I think for a bill with the ramifications that that will have, and against the most powerful lobby in the state, I’m really glad” that it passed quickly.
The speed left some people out. Don Schreiber, an oil and gas industry stalwart, drove an hour and a half from his ranch in the San Juan Basin to a friend’s Farmington office so he could have a strong enough phone signal to give his opinion in favor of the bill. But the shortened public comment period handicapped him. “I felt so bad,” he says. “New Mexico is knee-deep in professional lobbyists, and I’m not one of them.”
He says lobbyists are fine, but they can’t tell stories like his, “with 122 gas wells right around you, quite a lot [oil] Leak at your back door that you’re fighting, on a road that’s almost impossible to get in and out of. And it’s getting worse, worse, worse for the people of the Navajo Nation.
“A 1935 world benefits the oil and gas industry to the maximum,” he says, and the current law reflects a time when operators “had a free hand to just bang this hole in the ground and get the money out.” .