New Mexico Legislature Adjourns, Texas Lawmakers Pick up the Pace
The first session of New Mexico’s 55th Legislature has adjourned.
“What a session it was!” shared Stephen M. Robertson, executive vice president of the Permian Basin Petroleum Association (PBPA). All committees and floor sessions were held virtually. Testifying in committee was made difficult with varying requirements, based on the particular committee, and many times the number of people allowed to speak on a given bill was limited.
“The times we did testify, more often than not, we were only allowed one minute,” Robertson reported. The PBPA was tracking 41 bills by the last week of the session.
New Mexico Gov. Michelle Lynn Lujan Grisham has until April 9 to sign legislation. With that said, the PBPA will complete a comprehensive report after the signing deadline. In the meantime, the following priority bills were among those under the watchful eye of industry advocates: (HB = House Bill, SB = Senate Bill):
• HB 30 – Water Leasing… DOA (dead on adjournment), House Rules.
• HB 50 – Private Right of Action… DOA, House Rules.
• HB 51 – Environmental Data Base… Passed the Senate and headed to the governor.
• HB 76 – Air Quality Permit Denial… Passed the Senate and headed to the governor.
• HB 206 – Utility Affordability and Relief Act… DOA, Senate Finance.
• HB 291 – Income and Property Tax Package… Senate Finance removed the corporate income tax from the bill and lowered the upper limit rate on high income earners. Passed the Senate 40-0, and the House has concurred with Senate amendments. Headed to the governor.
• SB 8 – Local Gov’t Air Quality Regulations… Passed House 39-29; headed to the governor.
• SB 11 – Clean Fuel Standards… Passed the Senate 25-14 and was reported out of House Energy on March 16 but DOA on House Calendar.
• SB 20 – Transportation Project Fund… Passed House and now on governor’s desk.
• SB 34 – Design and Build Transportation Project Delivery… Passed Senate 38-0 and passed the House 67-0. Headed to the governor.
• SB 93 – Broadband Access and Expansion Act… Passed House 61-4; headed to the governor.
• SB 121 – State Transportation Project Bonds… Passed Senate 39-0 and passed the House 69-0. Headed to the governor.
Lone Star Lawmaking
Friday, March 12, was the deadline for the unrestricted filing of bills and joint resolutions other than local bills, emergency appropriations, and emergency matters submitted by Texas Gov. Greg Abbott.
As of March 31, 4,602 bills had been filed in the Texas House, with an additional 2,166 bills filed in the Texas Senate (this does not include resolutions). No bills had been passed as of press time, https://bit.ly/39uReoo.
House Committee on Energy Resources
At the end of March, 55 bills had been assigned to this committee, including House Bill 1683.
In mid-February, Rep. Brooks Landgraf, chair of the Environmental Regulations Committee, filed HB 1683, dubbed the Texas Energy Independence Act, to “stop the implementation of any overreaching new federal regulations on oil and gas production in Texas.”
Testimony on this bill was taken on March 11, and the bill was left pending in the Energy Resources Committee as of press time.
“We greatly appreciate Chairman Landgraf’s leadership in protecting the vital Permian Basin oil and gas industry from federal overreach, and PBPA will continue to work with him and others in the Texas Legislature to preserve the right to safely and responsibly develop natural resources in the Permian Basin,” Robertson stated.
Other bills in committee include:
• HB 1976 – Relating to a study conducted by the Railroad Commission of Texas regarding reported gas flaring.
• HB 2006 – Relating to the notice requirements for permits for the commercial surface disposal of oil and gas wastes.
• HB 2201 – Relating to the location of pits used in the production of oil and gas.
• HB 2482 –Relating to oil and gas operations; increasing fees.
• HB 2814 – Relating to the requirement of a public hearing on certain applications for a permit to drill an oil or gas well.
To view a full list of bills in the House Energy Resources Committee, go to https://bit.ly/2QV1j7F.
Senate Committee on Natural Resources and Economic Development
By the end of March, 129 bills were in this committee, including:
• SB 771 – Relating to the notice requirements for permits for the commercial surface disposal of oil and gas wastes.
• SB 772 – Relating to the location of pits used in the production of oil and gas.
• SB 954 – Relating to the financial security requirements for operators of oil and gas wells.
• SB 1030 – Relating to the applicability of provisions governing payment of the proceeds derived from the sale of oil or gas production to nonparticipating royalty interest owners.
• SB 1734 – Relating to the enforcement of certain federal laws regulating oil and gas operations within the State of Texas.
To view a full list of bills in the Senate Committee on Natural Resources and Economic Development, go to https://bit.ly/39wNK4F.
Priority Legislation
The Senate Finance Committee has completed its markup of Senate Bill 1, the General Appropriations Bill (budget), and the bill has been placed on the Intent Calendar. The House Appropriations Committee was still working on House Bill 1, its budget bill, as of press time.
With Winter Storm Uri still fresh on their minds, the Senate unanimously approved sweeping legislation at the end of March to overhaul the state’s electricity market in response to the Feb. 13-17 weather disaster. Senate Bill 3, now headed to the House, would require all power generators, transmission lines, natural gas facilities, and pipelines to make upgrades for extreme weather. The legislation would also outlaw risky indexed retail electric plans.
During comment periods, natural gas regulators and industry groups claimed that the majority of the problems that caused a shortage of natural gas during the storm were brought on by power outages, meaning winterization of the natural gas supply system was unnecessary. SB 3 noted the concern and is deferring to the Railroad Commission of Texas (RRC) to decide what upgrades natural gas fuel facilities would have to make.
The bill does not address funding to pay for the mandated upgrades. However, legislation filed in the House has included various funding mechanisms.
Experts have noted that the process of retrofitting the state’s power plants for winter could be expensive and somewhat difficult depending on the types of upgrades eventually mandated by regulators.
Senate Bill 3 would also create a statewide emergency alert system in the event of future blackouts and would create the Texas Energy Reliability Council, modeled after a currently voluntary board by the same name. Known as TERC, the board coordinates state energy regulators, electricity generators, and the natural gas fuel industry to ensure reliable gas distribution for electricity. SB 3 would formalize the body and require it to meet twice a year.
A provision that would give the Texas Public Utility Commission (PUC) six months to draft weatherization rules was added as a floor amendment. The RRC would be required to draft weatherization rules within six months upon completion of a map detailing Texas’ natural gas supply chain to “designate priority service needs during extreme weather events.”
Both the PUC and RRC would also be required to conduct on-site inspections to ensure compliance.
Finally, another amendment would transfer some of the financial burden of ancillary services, which help ensure the continuous generation of power to the electricity grid in the ERCOT market, to renewable energy providers.
Texas Energy Day @ The Capitol
State leaders, including Gov. Greg Abbott, Texas Speaker of the House Dade Phelan, and Lt. Gov. Dan Patrick, addressed industry advocates March 24 during Texas Energy Day @ the Capitol, conducted virtually due to the pandemic. More than 1,000 Texans and 50 companies, associations, and chambers of commerce participated in the event. The PBPA participated as an event partner.
During the event, industry representatives appealed to lawmakers to endorse policies that will allow the industry to support high-quality jobs and contribute billions of dollars in state and local tax revenue. During 2020, the Texas oil and natural gas industry paid $13.9 billion in state and local taxes and state royalties.
“The Texas oil and natural gas industry is vital to the Texas economy and budget, providing billions of dollars in tax revenue for education, infrastructure, and our Rainy Day Fund,” Phelan said. “In my district, there are many exciting energy expansion projects coming down the pike that I’m eager to see [them] get moving because these investments, and the jobs they create, are the reason many of my constituents can feed their families and put clothes on their backs.”
The event included virtual exhibits featuring industrial scale carbon capture technologies, innovations in advanced refining, water reuse and recycling solutions, the role of drones in the oil field, and more.
Commissioner Wayne Christian of the RRC addressed the role of the free market in Texas’ economic recovery.
“The challenges of this past year have proven, once again, that the private industry in a free market can always do a better job than government regulation,” Christian stated. “When we’ve faced crisis after crisis, the private energy industry has stepped up and over-delivered for the state of Texas.”
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Julie Anderson, based in Lubbock, is editor of County Progress Magazine, and is well known to many readers of PBOG as the prior editor of this magazine.