Budget Boom: 21st century ‘gold rush’ fuels long wish list for schools, infrastructure

We pick up where our story left off last year. As in 2019, we find New Mexico’s fortunes glittering in a 21st-century version of a gold rush in the oil-rich southeast as state lawmakers prepare for the 2020 30-day session. 

Policy makers will have about $800 million more in revenue than this year’s state budget to work with when crafting the state’s spending plan for the fiscal year that starts July 1. In an election year like 2020, it’s easier to partition a surplus than to cut programs and services, as state leaders discovered a few years ago in 2016 after a freefall in tax revenue forced painful choices. “We’re lucky to have the kind of revenues that are coming into the state,” Gov. Michelle Lujan Grisham told an audience last month at an Albuquerque town hall.  

There’s always a “but,” however, and Lujan Grisham didn’t disappoint. After acknowledging New Mexico’s gilded economic forecast, she recited a backlog of needs..“Our roads aren’t safe.

Carlsbad wrestles with oil, gas boom

Seated on the floor of First Christian Church on a recent Sunday morning, Pastor Dave Rogers pierces the heart of a debate in Carlsbad as it adapts to a historic oil and natural gas boom. Rogers recounts to three children the parable of the Good Samaritan. A man from a despised group helps a traveler beaten, robbed and left for dead after religious passers-by ignore him.“I wonder what it’s like to be a neighbor to somebody we don’t know and that needs our help,” Rogers asks his young listeners as a dozen or so adults, mostly senior citizens, look on. This story was produced by New Mexico in Depth in collaboration with the Carlsbad Current-Argus, Las Cruces Sun-News and Spotlight on Poverty and Opportunity.    

Welcoming strangers and helping neighbors are values many in the small congregation – and broader community – identify with Carlsbad. The hub of Eddy County in southeastern New Mexico, Carlsbad is home to a 21st century version of a gold rush in the Permian Basin that straddles New Mexico and Texas, where hydraulic fracturing is enabling companies to access an ocean of oil reserves.

Oil and gas had little to fear during legislative session

Storage facilities in the Permian Basin. Photo by Elizabeth Miller. Stepping to the microphone at a press conference wrapping up this year’s legislative session, House Speaker Brian Egolf, D-Santa Fe, hammered the podium to the drum beat for Queen’s “We Will Rock You” before declaring it the “best, most productive” legislative session in state history. He proclaimed major achievements in education funding, criminal justice reform, a path for carbon-free electricity — and a bill that would save 100,000 acre feet of water each year from use in oil fields. “The produced water bill, I think, is going to go down as one of the greatest environmental accomplishments to come out of the state legislature of New Mexico,” Egolf said.

NM lawmakers go big on renewables, handle oil, gas with kid gloves

It was a mixed session for people who care about climate change and its effects. The state secured some large-scale wins, but failed to advance measures that would diversify the electrical grid and support individual households in reducing their own carbon footprint. And while measures to hold oil and gas companies accountable for violations of the Oil and Gas Act passed, there was little appetite among lawmakers for drawing more royalty money from an industry responsible for a billion dollar surplus this year. The flagship win for Democrats was the Energy Transition Act, SB 489, which commits the state to 100 percent carbon-free power by 2050. That bill schedules a payment plan for closing the San Juan Generating Station, a coal-fired power plant that supplies Public Service Company of New Mexico (PNM).

Penalties for oil and gas violations revived in Senate Judiciary, pass Senate

Crude oil storage tanks in San Juan County

The Senate passed a House bill last night on a 32:6 vote dealing with wastewater from oil and gas production, after the Judiciary committee amended it to grant the Oil Conservation Division authority to issue fines and fees. Now, if the House agrees with the amendments and the governor signs it, the OCD will, for the first time since 2009, be able to issue fines for violations of New Mexico’s Oil and Gas Act. The Senate amendments pick up an effort made by sponsors of SB 186, which was sent to Senate Finance and has yet to see a hearing. Initially, HB 546, titled the “Fluid Oil and Gas Waste Act,” sought to address questions around managing the estimated 1 billion barrels of water that emerge with oil through production. Companies had cited concerns over jurisdiction, liability and potential to retain proceeds among the reasons just 8 percent of water that comes out of oil and gas activities was being reused, Jennifer Bradfute, an attorney with Marathon Oil, told House Energy, Environment and Natural Resources committee members when that bill was first heard.

Lawmakers get another chance on methane regulations

Thermal image of emissions that aren’t visible to the naked eye. Credit: Sharon Wilson, Certified Thermographer, Earthworks Oil and Gas Accountability Project. Reducing methane emissions from the state’s oil and gas industry was among the promises Governor Michelle Lujan Grisham made in her campaign, reiterated in her state-of-the-state speech in January and then acted on in an executive order. The order cites leaked, vented, and flared natural gas, the primary component of methane, as costing the state $244 million a year, and directs  state agencies to develop a regulatory framework for those reductions from both new and existing sources. Methane, often released from oil and gas development, ranks among the most potent greenhouse gases, with a short-term warming potential that far exceeds that of carbon dioxide.

Oil and gas is responsible for state’s renaissance in business and communities

A new era is on the horizon for New Mexico. The future for this industry in the state has never been brighter. Of course, this is not only true for New Mexico’s political transition, it’s true for the energy renaissance taking place across America and right here in the Land of Enchantment. Earlier this year, the Energy Information Agency reported that the US became the largest producer of crude oil in the world. This spectacular accomplishment reflects the idea that we should have greater control of our energy future, making our country more secure, and allowing communities and economies to flourish.

Dunn: Land commissioner candidates won’t hold Oil & Gas accountable

Outgoing State Land Commissioner Aubrey Dunn grew up on an apple farm near Alamogordo and worked for 25 years in banking. He characterizes the land commissioner’s job as one of handling a thousand different things and managing almost 200 people in ways that draw from both his business background and his familiarity with land and conservation issues. He has been accused of rubber-stamping oil and gas drilling on state lands, but he argues his record shows otherwise. “As land commissioner, you have a constitutional duty to create income from lands and protect it for future generations — it’s a dual purpose,” says Dunn, who accessorizes his suit and tie with ostrich cowboy boots and lapel pins of the U.S. and “Don’t Tread on Me”-emblazoned Gadsden flags. “It’s got to be a balance: conservation and oil and gas.”

He points to a policy switch around no longer allowing wells into the Ogallala Aquifer for oil and gas operations and his fight for Texas hornshell mussel habitat as examples.

High Stakes Race: Oil and gas industry and environmentalists square off over next governor

Take a look at most oil and gas infrastructure — wellheads, pipes and cylindrical storage tanks — dotting New Mexico oil and gas fields, and little seems to be happening. But use the right equipment and you can see gases, including methane, wafting into the air. Heading skyward with methane, the main component of natural gas and a greenhouse gas that contributes to global warming, are royalties some say the oil and gas industry could be paying New Mexico. An April report from Taxpayers for Common Sense, a national budget and taxpayer advocate, analyzed federal leases through the Office of Natural Resource Revenue and estimated that the gas lost nationwide on federal lands in 2016 was worth $75.5 million. Half of the gas lost between 2012 and 2016 came from New Mexico.