Call it a tale of two energy bills.
A bill that would have made the most significant changes in decades to the New Mexico Oil and Gas Act died on the House floor without a vote, even though Gov. Michelle Lujan Grisham backed it.
But a bill that will create a clean transportation fuel standard made it through the Legislature, mostly along party lines and not without a fight. Lujan Grisham has expressed support for the bill and is expected to sign it.
The fossil fuel industry didn’t support either bill. It simply attacked the proposed Oil and Gas Act changes more fervently. That measure would have hit drillers’ pocketbooks more directly by raising bonding insurance rates on wells and removing the cap on penalties they would pay for breaking rules.
Operators and industry representatives decried how the bill would have eliminated the cap on penalties and increased the maximum bonding amounts drillers pay upfront as insurance to $10 million from the current $250,000.
Opponents said the bill would disproportionately hurt smaller operators. Several business owners said they would either go under or would have to move to a neighboring state.
The legislation to change the Oil and Gas Act “had too many complex issues bundled into one massive bill that would have decimated small producers and dramatically stalled overall future oil and gas production in New Mexico,” Jim Winchester, executive director of the Independent Petroleum Association of New Mexico, wrote in an email. “[Association] members are grateful that the Legislature recognized the overreach of the numerous regulatory proposals packed into this monstrous, activist-driven bill.”
