Ben Shepperd
The New Mexico legislative session ended February 16th and the legislature fulfilled its primary duty of passing the budget. It was one of the least controversial budgets in years. The budget passed with only five total dissenting votes. The House passed the budget unanimously and that group consists of 33 Republicans. The Combined Reporting bill (Senate Bill 9) passed, requiring companies with operations in multiple states to report their total income from all operations. The bill was amended to exempt everyone but retailers operating in facilities of 30,000 square feet or more (big box stores). The bill actually affected a one-tenth of one-percent tax reduction for everyone who files corporate returns. We shall see if the Governor signs it.
On February 15, 2012, the rule pertaining to disclosure of hydraulic fluids becomes effective. The rule requires operators to submit a disclosure form to the New Mexico Oil Conservation Division (OCD) within 45 days of completion of the well. The OCD has developed an electronic form for operators to use. The OCD is cognizant that some operators may prefer to report to FracFocus in addition to reporting to the OCD. Given this possible duplication of effort, OCD is working with FracFocus in hopes of creating a form that can be used by the operator to report certain information to both agencies.
The state Environmental Improvement Board voted 5-0 last month to repeal a controversial cap-and-trade regulation to reduce greenhouse gas emissions. A partnership of seven states originally envisioned as participating in the cap-and-trade program had dwindled to two, California and New Mexico.
The ruling reversed a 2010 decision of the previous board appointed by then-Gov. Bill Richardson. Gov. Susana Martinez, who was openly critical of the plan, appointed the current board members. The state Environment Department supported the repeal.
But wait, there’s more. A New Mexico district judge in January sided with industry, putting on hold legal appeals designed to halt efforts by the industry to revamp rules for handling drilling and production wastes (the Pit Rule). This rule is being reworked to address some of the more problematic aspects of the Rule. Big “hats off” to both the New Mexico Oil and Gas Association and the Independent Petroleum Association of New Mexico for their efforts.
Back in Austin, Railroad Commission Chairman Elizabeth Ames Jones resigned last month to concentrate on her race for the state senate district 25 seat currently held by Senator Jeff Wentworth (R-San Antonio.) This leaves the Commission with a vacancy (again) and Governor Perry gets to appoint another Commissioner. The next order of business will be for the Commission to choose its next Chairman. Tradition dictates that the slot should go to Commissioner Smitherman since he faces election later this year.
There are many qualified candidates who could contribute to the Commission immediately and I hope that Governor Perry will make a choice soon. These are terrible times to be without a full Railroad Commission.