New Mexico Gavels Out
The New Mexico Legislature adjourned sine die on March 18, closing out the 60-day 56th Session during which industry advocates spent most of their time playing defense.
“A number of highly troubling bills were introduced that could have greatly impacted oil and natural gas operations in the Land of Enchantment,” reported Stephen M. Robertson, executive vice president of the Permian Basin Petroleum Association (PBPA). While several of these efforts garnered hearings in either the House or the Senate, none of these bills made it out of the Legislature to the governor’s desk; in fact, most did not even make it out of their assigned committees.
“This end result was no small feat, and a tremendous amount of thanks goes to our member companies, members of the oil and natural gas lobby, advocates for business interests of all types in New Mexico, and especially to the members of the PBPA New Mexico Legislative Committee led by Chairman Patrick Killen of Chevron and longtime PBPA advocate Mike Miller,” Robertson shared. “Without a strong coalition that included those in ranching and farming, municipalities, construction, and even at times renewable energy, several of these efforts targeting business growth in New Mexico could not have been defeated.”
Of the items that did pass, the legislation of the most interest to the oil and gas industry was related to the state budget. The $3.5 million budget surplus was largely due to oil and gas production, Robertson noted. Budget appropriations included:
- $2.9 million to the New Mexico Environment Department for water reuse, which should help move forward beneficial reuse in the state;
- 8 percent increase in public school funding;
- additional money for teachers (5 percent raise + 1 percent inflation) and public employees, including police ($100 million for law enforcement programs);
- $146 million for Opportunity Scholarship designed to send New Mexico students to New Mexico colleges;
- money providing for lunch for all New Mexico public school students;
- 11 percent budget increase for the Economic Development Department;
- funding for private/public partnerships; and
- $230 million for local and state roads.
Some of the more worrisome proposals this session included:
- The Green Amendment (SJR 6) – a joint resolution that would have proposed a constitutional amendment to the voters of New Mexico guaranteeing anyone in the state the right to a clean environment. This would have included the right to clean and healthy air, water, soil, and environments; a stable climate; and self-sustaining ecosystems without clearly defining any of these terms.
- A Private Right of Action (HB 242) – a bill that would have provided for a private right of action to enforce certain statutes under the Oil and Gas Act, the Air Quality Control Act, the Hazardous Waste Act, the Solid Waste Act, and the Water Quality Act. To have standing to bring such a claim, you wouldn’t have to show injury in fact caused by a claimed violation of any of these acts, but instead could just show that you were “imminently threatened with injury,” economically or otherwise.
- The Clean Future Act (SB 520) – an attempt to codify the rules previously put in place by the Environment Department and the Oil Conservation Division having to do with greenhouse gas emissions reporting and capture.
- Oil & Gas Permit Applications (HB 276) – an attempt to amend the Oil and Gas Act by authorizing the Oil Conservation Division to require proof of insurance and fiscal solvency when submitting a permit application; however, such a review would not just be limited to the applicant, but would also include any person who is “substantially affiliated” with the applicant.
- Oil and Gas Act Changes (SB 418) – orchestrated by the Western Environmental Law Center to make sweeping changes to the state’s Oil and Gas Act, adding numerous new terms and definitions and restructuring the Oil Conservation Commission while increasing bureaucracy and decreasing the ability of the state to produce its natural resources.
Many of these issues were broached in previous sessions, and they will likely reappear in the future, Robertson predicted.
“However, the fact that they didn’t make it through this session should be recognized,” he emphasized. “Those who worked to educate lawmakers on these efforts truly deserve to be congratulated for helping to protect the New Mexico economy and jobs, and for helping to protect funding for schools, roads, infrastructure, government subsidies for renewable energy projects, law enforcement, and the numerous other government-offered services that are funded by revenues from the oil and natural gas industry.”
Texas Session Takes on Frenzied Pace
As of press time, senators and representatives from the Lone Star State had filed 7,914 bills, with thousands being filed right up to the March 10 deadline, according to Texas Legislature Online.
“This demonstrates the new logistical challenges for the Texas Legislature, to consider thousands of bills in just a few weeks,” explained Michael Lozano, PBPA director of Government Affairs. While the regular session lasts through May 29, these bills must be passed out of committee in order to be considered in the Calendars Committee. Then, there’s the deadline for consideration in the House of Representatives, which is May 11.
“This is the real challenge with the legislative process, and timing is everything,” Lozano observed.
The PBPA has been active and engaged on a variety of issues that directly and indirectly affect the industry. For example, the Association is supporting legislation to ensure that the Produced Water Consortium, housed at Texas Tech University, continues to evaluate methods to utilize produced water for beneficial uses outside of the oil and gas industry. The consortium includes oil and gas operators, water management firms, service companies, environmental groups, think tanks, and more.
The House is expected to debate its version of the state budget in the near future, and the PBPA has been advocating for continued and increased funding for the Texas Commission on Environmental Quality as well as the Railroad Commission of Texas.
“Jointly, these agencies represent the oversight of oil and gas activities, and we need these agencies to be funded and effective to ensure that the industry can continue to create jobs and grow,” Lozano said.
The PBPA is also supporting legislation that would:
- establish a process for innovative carbon technologies; and
- support efforts to expand transmission buildout in the Permian Basin.
Other legislation the Association is monitoring includes Rep. Tom Craddick’s GROW Bill, or House Joint Resolution 27 (HJR 27), which calls for reinvesting state money generated by oil and gas exploration back into the Permian Basin and other energy-producing hotbeds. HJR 27 would create the Generate Recurring Oil Wealth (GROW) for Texas Fund.
“GROW gives some of that funding back to communities during the times they need it most,” Craddick stated. “It allows these communities to continue to grow and build their infrastructure if needed. This bill would be a huge step forward for all of Texas.” As of press time, HJR 27 was in the House Appropriations Committee.
Last but certainly not least, the PBPA is endorsing the reform of critical infrastructure changes made during the last legislative session “to ensure that we continue to have a clear understanding of the natural gas-electricity supply chain” and to be sure that this chain “isn’t unnecessarily onerous to oil and gas operators in the Permian Basin,” Lozano summarized.
For more information on the PBPA and the Texas and New Mexico legislative sessions, go to www.pbpa.info.