Santa Fe New Mexican (January 19, 2024) – A Senate Finance Committee hearing about an agency budget turned testy Friday as legislators ripped into the potential effects of a House bill dealing with New Mexico’s oil and gas industry.
During Friday’s meeting, Republican Sens. William Sharer of Farmington and Sen. Crystal Diamond Brantley of Elephant Butte put up a spirited defense of the industry in response to proposed legislation that would require all new wells to placed at least 2,250 feet — not quite a half-mile — from a health care and correctional facilities, multifamily residential buildings, homes and schools.
There is also a clause to set new wells back from natural bodies of water by either 300 or 660 feet.
What was supposed to be a hearing focusing on the budget of the state Energy, Minerals and Natural Resources Department quickly turned into an interrogation on how the proposed changes — which could go into effect later this year and include some exceptions — would affect the future of the oil and gas industry, which provides about 40% of the state’s revenues.
The roughly 45-minute back-and-forth between the two senators and Dylan Fuge, acting Cabinet secretary for the state’s Energy, Minerals and Natural Resources Department, focused on a single point of the 25-page House Bill 133. The byplay provided an opening salvo in what may well be a longer legislative battle over changes to oil and gas industry practices.
Many lawmakers have said oil and gas is responsible for the roughly $13 billion windfall the state is now working with to craft a budget.
Sharer, whose combative style can suddenly segue into recitations of poetry and references to American history, charged the legislation “is designed to destroy New Mexico,” though it was unclear if he was talking about the setback proposal or the entire bill. “One-hundred thousand people will lose their jobs. The economy of New Mexico will be destroyed.”
Fuge said the proposal is not intended to kill off the fossil fuel industry, adding as oil wells age, their emissions often get worse and threaten the health of people and the nearby environment.
“Wells are like people: They’re all different,” Fuge said. “Some are near water bodies that are fine and there’s another one in the San Juan Basin where the disposal pit is right next to an arroyo, and the pit is about to collapse into the arroyo.”
He said the exception clause in the provision could allow every new well operator to sidestep the proposed rule if their operations meet the bill’s requirements.
“We do not believe there is a well that will be impacted. There may be wells that require an exception,” he said. “You could build it right next to the school if standards were met for exception. I would not advise that.”
Brantley said the measure sends a bad message to new and longtime oil and gas operators in the state who may be adhering to all state environmental laws to keep the industry as clean as possible.
“With one sweep, we’re going to blanket the industry by saying, ‘You’re all bad apples. You’re all dirty,’” she said.
HB 133 is one of several bills related to changing or cleaning up the oil and gas industry in a state that is focused on reducing all carbon emissions by 2045.
Besides new rules for oil well placements, House Bill 133 calls for increased fines and higher royalty payments, among other measures.
The bill was scheduled to be heard in the House Energy, Environment and Natural Resources Committee on Saturday in the state Capitol, along with two other related bills.
