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All the above did not exist a few short centuries ago, before the 1800’s. We’ve become a very materialistic society over the last 200 years, and the world has populated from 1 to 8 billion because of all the products and different fuels for planes, ships, trucks, cars, militaries, and space programs that did not exist before the 1800s.
As technologies advance for more reduced carbon electricity generation and use, there will be more requirements for critical minerals such as copper, lithium, nickel, cobalt, and rare earth elements that are essential components in many of today’s rapidly growing electricity technologies – from wind turbines and electricity networks to electric vehicles. Demand for these minerals is growing quickly as electricity transitions gather pace. All those exotic minerals and metals only produce electricity, as they CANNOT make any PRODUCTS used in today’s economy.
Most government officials and policymakers are unaware that ALL electricity came AFTER the discovery of oil, starting with the light bulb made from oil. All electrical generation from hydro, coal, natural gas, nuclear, wind, and solar are ALL based on the products, components, and equipment made with PRODUCTS made from oil derivatives manufactured from crude oil.
It seems that we’re living in a time where intelligent CONVERSATIONS are silenced so that stupid people won’t be offended.
IPANM (Mar. 7, 2024) – The New Mexico State Land Office has abruptly notified the oil & gas industry that all future state premium tract lease offerings will be suspended indefinitely until a 25% royalty increase is approved by the state legislature. The maneuver comes as a result of the State Land Office not being able to pass their own legislation to raise royalty rates up to 25% on state leases. State legislators whom IPANM have spoken with since Thursday’s announcement were not aware of the State Land’s Offices demands on the Legislature to take action.
As a result of the notification, IPANM Executive Director has issued the following statement:
“The State Land Office has unilaterally decided to cut off future revenues to state beneficiaries and the general fund by suspending new leasing of premium tracts. IPANM strongly opposes this action especially considering the decision was abruptly announced without any consideration of the economic impact to all New Mexicans.”
IPANM has strongly opposed any increase to state royalties due to the fact that New Mexico is already the highest taxed state on oil & gas operations. An increase to 25% from the existing 20% would continue to put New Mexico small producers at an economic disadvantage in overall operating costs. While the state land office likes to point out that Texas’ royalty rates are at 25%, it is not an “apples to apples” state comparison given the higher overall operating costs for New Mexican operators.
IPANM is currently evaluating the legality of the Land Commissioner’s actions and will keep members informed of developments.
IPANM (Mar. 6, 2024) | PDF – The following statement has been released by Jim Winchester, Executive Director of the Independent Petroleum Association of New Mexico regarding Governor Michelle Lujan Grisham’s line-item veto of the bipartisan Stripper Well Tax Exemption from HB252 Tax Package.
“Governor Michelle Lujan Grisham continues her assault on small-business independent producers with her veto of the Stripper Well Tax Provision, which had bipartisan backing. This carefully crafted tax treatment would have provided measurable benefits to the environment by substantially reducing emissions from small producers’ low-production wells. The provision had the added benefit of increasing state revenues and protecting jobs provided by locally owned companies.”
–Jim Winchester, IPANM Executive Director
IPANM would like to thank Senator Ron Griggs of Alamogordo for his efforts in sponsoring the bill.
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The Henderson News (Feb. 29, 2024) – Twenty years ago the United States imported more than half of the oil we consumed each day. Today, primarily through innovative technology developed by the American oil and natural gas industry, the U.S. exports more oil than it imports. In 2004, the U.S. imported 13.7 million barrels of oil per day (b/d) while producing 5.2 million b/d, resulting in a negative 8.5 million b/d. Currently, the U.S. imports just 6 million b/d while producing 13.3 million b/d, resulting in the U.S. becoming a net exporter of oil. Natural gas also has become a net exporter with liquefied natural gas (LNG) traveling to Japan to the west and Europe to the east and many other countries.
The industry began experimenting with new technology in the 1990s that involved drilling vertically into shale formations and then drilling horizontally and then hydraulic fracturing the shale to free the oil and gas to flow to the surface. Around 2008 the rush to drill using this new technology took off. However, some of the politicians in Washington, D.C. are using the regulatory weapon against the oil and gas industry. President Joe Biden has used his power in an attempt to make it more difficult and expensive for the oil industry. The Biden administration recently implemented a complicated new methane tax, proposed new emission standards for vehicles, limited exploration on public lands, and proposed limiting LNG exports.
The American Petroleum Institute (API) this week released a new national poll demonstrating widespread concern over Washington’s approach on energy policy. The poll, conducted Feb. 9-13 of 1,132 registered voters, found 86% believe producing oil and natural gas here in America helps make our country more secure against action by countries such as China and Russia. Also, the survey found 84% believe producing more oil and natural gas in the U.S. could help lower energy costs for American consumers and small businesses. Two out of three American voters say the country is on the wrong track on energy policy, and following the administration’s recent pause on LNG export permits, the poll found nine in 10 Americans believe the U.S. should continue to supply natural gas to our allies overseas, API said. With recent reports that the administration plans to impose a de-facto ban on new gas-powered vehicles, the poll found that the majority of Americans (75%) would oppose such regulations restricting consumer choice.
“While the U.S. continues to lead the world in energy production, it’s clear the American people see that misguided policy choices today can sow the seeds of tomorrow’s energy crisis,” API President and CEO Mike Sommers said.
“Whether it’s partisan decisions to restrict American natural gas as a source of strength around the world and good-paying jobs here at home, or regulatory plans to dictate the type of cars consumers can drive—voters on both sides of the aisle know we are on the wrong path on energy policy. With much at stake for our economy and national security, it’s time for Washington to change course and forge a bipartisan path that embraces all reliable and affordable American energy,” Sommers said.
IPAA (February 16, 2024) – America’s oil and natural gas producers are innovating to produce more oil and gas than ever while generating less emissions and bringing reliable, affordable energy to Americans and our global allies. In its latest short-term energy outlook, the Energy Information Administration estimated that U.S. crude oil production reached “an all-time high in December of more than 13.3 million barrels per day.”
That production helps stabilize prices for consumers. Oil and natural gas are sold on global markets, and prices can be affected by events or decisions — frequently by bad actors — on the other side of the world. However, having strong U.S. output helps reduce the shock of those actions for Americans.
Our record level of energy production does face threats — specifically by the U.S. government, whose leaders have sought to shut down oil and gas producers with an all-of-government approach, but the industry pushes forward.
Last year, the oil and natural gas sectors continued to innovate and reach record-breaking levels of production. After becoming a net energy exporter in 2019, the United States has emerged as a behemoth in the global energy market, hitting prolific levels of oil and natural gas production and exports in the past year. U.S. liquefied natural gas had a tremendous 2023, with the United States becoming the top LNG exporter in the world.
These record-breaking levels of production have not come at the expense of Americans, as some claim. On the contrary, record energy production levels have successfully met domestic and international demand, providing crucial energy security at home and abroad, all while keeping prices stable.
The American oil and natural gas industry continues to prioritize environmental progress. The workers producing the energy we use daily live in homes surrounded by the oilfield, breathing the air and drinking the water from aquifers above the oil reservoirs where they produce; thus, they are highly motivated to preserve and protect the environment for today and for future generations.
Data from the Environmental Protection Agency showed stunning drops in methane emissions across the board in oil- and natural gas-producing basins. The … Permian (Texas and New Mexico) had 32% less emissions. All show that even with record production, U.S. operators continue to produce oil and gas responsibly and with an eye toward methane reduction.
Voluntary initiatives like the Environmental Partnership, representing nearly 70% of U.S. onshore oil and gas operations, showcase the industry’s commitment to responsible operations through innovation and collaboration.
Considering the uncertain regulatory environment, these accomplishments and innovations are even more impressive. Nowhere has this been more apparent than in the Biden administration’s illegal actions regarding onshore and offshore leasing.
In the Gulf of Mexico, offshore production provides the lowest carbon barrels of oil, generates millions of dollars in funding for parks and recreation programs, and supports hundreds of thousands of jobs across every state. Yet the administration released an offshore plan 450 days late that only offered three lease sales over the next five years — the fewest in history.
Onshore, it’s a similar story. There are widespread administrative efforts to limit access for development despite disagreement from local groups, including tribes. The president and leaders who control the Senate want to limit capital access for producers, add new taxes and increase federal regulations. …
The bottom line is a thriving American oil and gas industry means increased energy and economic security at home and abroad and progress toward global emission reduction goals. While administration regulatory hurdles add challenges, U.S. oil and natural gas producers continue to produce record-setting, responsible oil and natural gas.
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.”
IPANM (February 9, 2024) – Today, IPANM joined 26 state and federal oil & gas trade associations in expressing major concerns regarding the impacts of the Environmental Protection Agency’s (EPA) new methane emissions regulations (Subparts OOOOb and OOOOc) and the Methane Tax. In a letter dated February 9, 2024, the joint trade letter reads, “Both actions threaten marginal wells continued operations by creating unfair, unworkable, and uneconomic regulations. These small business energy producers need assistance to find a regulatory or legislative solution to mitigate these threats.”
The letter cites the inadequacies of the proposed rules’ failure to understand existing facts about marginal well emissions (and lack there of), as well as improper formulas established to calculate a “Methane Tax.” In both proposed rules, the outcome would lead to a disproportionate regulatory structure for marginal well owners and/or the over calculation of the actual emissions.
After citing the evidence supporting the current problems with both rules, the associations’ letter reads, “Collectively, the Subpart OOOOc regulations and the Methane Tax pose serious and direct threats to hundreds of thousands of marginal wells. These threats have not been remotely addressed in the current regulatory actions completed or pending at EPA. Congress needs to step up and step in to prevent irresponsible agency actions that would savage the nation’s marginal oil and natural gas wells.”
To see a full copy of the Associations’ Letter to Congress, please click below.
Santa Fe New Mexican (February 5, 2024) – A bipartisan New Mexico Senate bill intended to unlock more state funding for the clean up of abandoned oil and gas wells was endorsed by industry leaders during the 2024 Legislative Session.
Senate Bill 249, sponsored by Democrat Sens. Joseph Cervantes and George Munoz, along with Republicans Greg Nibert and Steven McCutcheon would require an oil well reclamation fund maintain a balance of $60 million annually, using tax dollars generated through the Oil and Gas Conservation Tax.
These funds would be used to remediate abandoned wells, known as “orphaned,” to prevent environmental impacts and reclaim the land.
Wells are considered orphaned when oil and gas operators leave them unused when the facilities are deemed nonprofitable.
They are unmonitored and believed to spew air and water pollution as they sit abandoned.
The New Mexico Oil Conservation Division estimated there are about 1,700 of such wells in the state and plugs them using a combination of state and federal dollars when private bonding payments are inadequate.
A movement among New Mexico lawmakers and oil and gas regulators sought to increase the bonding payments companies make for well plugging and remediation should they be abandoned. That’s contained in House Bill 133, which passed two committees and next faces a hearing on the House Floor.
But SB 249, which is awaiting its first hearing in the Senate Conservation Committee, would increase public dollars used for the work.
It would first require that federal funds, about $44 million provided by the 2021 Infrastructure Investment and Jobs Act, be used and exhausted before state dollars are provided.
That would happen via a $5 million monthly distribution of revenue, totaling $60 million a year, from Oil and Gas Conservation Tax Act to the Oil and Gas Reclamation Fund, should the bill pass.
All that money would be sent directly to the Oil Conservation Division for plugging and cleaning up the wells.
The bill was supported by the New Mexico Oil and Gas Association (NMOGA), Independent Petroleum Association of New Mexico (IPANM) and Permian Basin Petroleum Association.
The Oil and Gas Conservation Tax was first instituted in the 1950s, with the Reclamation Fund established later to fund such efforts.
But Nibert said SB 249 would ensure the money is used specifically for well cleanup.
As the law stands, two-nineteenths of the receipts from the tax were sent to the Reclamation Fund, and Nibert argued the required dollar amount would increase the funding.
“The Conservation Tax ensures that oil and gas operators are paying toward the continued reclamation of lands used in oil and gas operations,” he said. “The state must ensure the funds are allocated toward their intended purpose for quickly and sufficiently returning New Mexico’s land to its native state.
NMOGA reported the oil and gas industry plugged 451 wells in New Mexico in 2022, while the State plugged 49 wells using $3.4 million from the Reclamation Fund.
“This bill does not reduce or increase taxes paid by the oil and gas industry for well reclamation,” said NMOGA President Missi Currier. “It ensures the Reclamation Fund is properly funded and used for addressing the clean-up of wells.”
Yet, a growing number of lawmakers argued the industry should pay more to cleanup wells and cut down on pollution.
HB 133 would raise a cap on “blanket bonding” requirements operators pay on all of their wells in the state from $250,000 to $10 million.
An amended version of bill added a tiered structure to this requirement, maintaining the $250,000 rate for operators with less than 50 wells, growing to $350,000 for an operator with more than 50, but less than 100 wells and $500,000 for companies with less than 150 wells but more than 100 wells.
A rate of $750,000 would be imposed on operators with between 150 and 300 wells, and $5 million would be paid for those with between 300 and 500 wells.
The $10 million cap would go into effect only for companies that have more than 500 wells, should the new version of the bill pass.
During Wednesday’s House Judiciary meeting, where HB 133 was passed, Chair Rep. Christine Chandler (D-43) of Los Alamos, who voted in favor, said more of the financial burden to the state for abandoned wells should be shifted to the industry she said was responsible for the pollution.
Concerns were raised by environmentalists, who charged the amended version removed various environmental requirements, opting to focus on financial changes like bonding and fee raises.
Independent oil companies also spoke in opposition, arguing the bill unfairly impacted small producers. NMOGA, which represents larger companies, did not oppose the bill’s latest version, although IPANM did.
Santa Fe New Mexican (January 29, 2024) – New Mexico’s fossil fuel industry is enjoying a record boom in the Permian Basin, and state officials want the education system to benefit even more than it has from the oil-rich region by making companies pay more to drill on state lands there.
The House Commerce and Economic Development Committee voted 6-5 Monday, mostly along party lines, in favor of House Bill 48, which would raise the maximum royalty rate on state lands to 25% from the current 20% — the first such increase since the 1970s.
An industry advocate said large companies can absorb the higher royalty rate, but it would slam smaller operators who work on thinner profit margins.
“This raise does disproportionately hurt them,” said Jim Winchester, executive director of the Independent Petroleum Association of New Mexico. “While in Texas, operators do pay a royalty rate of 25%, it is not an apples to apples comparison when you put in all the expenses here in New Mexico.”
Those include severance and ad valorem taxes, Winchester added.
