New Mexico governor touts passage of oil and gas reform, ethics bills

Source: Mike Lee, E&E News reporter • Posted: Wednesday, March 20, 2019

New Mexico Gov. Michelle Lujan Grisham, who was elected after promising to wean the state off its reliance on fossil fuels, saw many but not all of her priorities pass the Legislature.

Lawmakers approved the Democrat’s signature “Energy Transition Act” last week. It will require utilities to draw 50 percent of their power from renewable sources by 2030, and all of it by 2045 (Climatewire, March 13).

A bill to restore enforcement authority for the state’s oil and gas regulator passed, after lawmakers compromised on some of its provisions. And the Legislature voted to create a state ethics commission, a move that could limit the influence of oil and gas companies, along with other industries.

“After eight years of stagnation, and after sixty days of hard work, sixty days of agreement & disagreement alike, we have demonstrable results,” Lujan Grisham said in a statement on Facebook over the weekend.

Lujan Grisham replaced Republican Susana Martinez, who was widely viewed as friendly with the oil and gas industry. At the same time, Democrats held onto their lead in the state Senate and widened their control of the state House.

On the downside, Lujan Grisham asked lawmakers to increase early childhood education funding by dipping into a trust fund that’s backed by oil and gas revenue on state land. Lawmakers turned down the idea.

And a bill that would have raised royalties for oil and gas production on state-owned land died in committee.

Still, Lujan Grisham’s supporters said the reforms are significant because New Mexico is the country’s third-biggest oil-producing state, and its production is expected to grow as drilling ramps up in the Permian Basin field.

New Mexico’s Oil Conservation Division hasn’t been able to issue fines since a 2009 court decision. Previous efforts to restore the agency’s authority failed in 2015 and 2017 (Energywire, Jan. 29).

Sponsors of this year’s reform bill, state Rep. Matthew McQueen (D) and state Sen. Richard Martinez (D), had sought to raise the maximum penalty for oil and gas pollution from $1,000 to $15,000. The final version, which passed as part of an amendment to a bill on oil field wastewater, set the penalty OCD can assess at $10,000 a day, and set a cap on the total fines at $200,000. Anything higher than that has to be imposed by a court.

Environmental groups opposed the cap on penalties but still applauded the bill.

“Restoring New Mexico’s ability to protect its health and resources from oil and gas pollution is a critical accomplishment,” Jon Goldstein, director of regulatory affairs for the Environmental Defense Fund, said in a statement.

Likewise, good-government groups have been pushing New Mexico to create an ethics commission for years. Then-Gov. Bill Richardson (D) first proposed the idea in 2006, after the state’s treasurer resigned amid allegations of misconduct (Energywire, Nov. 26, 2018).

The Legislature passed a measure in 2017 calling a statewide referendum on an ethics commission. About three-fourths of voters approved the idea in November, which required the Legislature to create the commission this year.