In Democratic New Mexico, Oil and Gas Legislation Doesn't Pass

Yahoo

07-04-2025

A pumpjack operates north of Carlsbad, NM. A New Mexico Environment Department air quality monitoring station in Carlsbad recorded ozone levels that could lead to the region being declared an ozone nonattainment zone by the EPA. The air pollution comes from oil and gas operations in the area. (Photo by Jerry Redfern / Capital & Main)
And poof — it's gone.
New Mexico's biannual, 60-day lawmaking session ended after two breakneck final weeks with the Democratic-majority, volunteer legislators working right up to the noon deadline.
In the end, it was another legislative session that confirmed business as usual for the state's oil and gas industry. Bills that would keep new wells away from schools; keep habitual rule violators and financially risky companies and people from buying wells; increase state fees and penalties to match the rate of inflation; and codify the state's much-touted methane regulation rules, as well as a bill to reduce the state's overall greenhouse gas emissions — all these and more were voted down or left undebated, preserving the industry status quo.
But that may not last. Over the same 60-day period, which ended March 22, the Trump administration fired up its scorched-earth policy to dismantle the federal government, including plans to deregulate the oil and gas industry, easing the status quo for oil and gas producers. And despite warnings since the November election and increasing clarity over the last two months, New Mexico's legislators did not address the promised federal regulatory collapse in its just-finished session.
Hours after being sworn into his second presidential term, Donald Trump sat down and signed 26 executive orders that, taken together, unwind much of the climate-related regulatory work begun under his predecessor, President Joe Biden. Two of those orders, Declaring a National Energy Emergency and Unleashing American Energy, amount to a set of promises to deregulate fossil fuel production, and particularly in the oil and gas industry, promising an earthquake of federal regulatory change for New Mexico, the nation's second-largest oil producer.
That was Jan. 20. The next day, the New Mexico Legislature began its biannual two-month session. (In even-numbered years there is a one-month session devoted solely to the budget.)
It's difficult to react to breaking changes coming out of Washington
– State Rep. Matthew McQueen, D-Galisteo
Then on March 12, 10 days before the end of the session, EPA Director Scott Zeldin announced the mechanisms to fulfil Trump's promises: a massive series of EPA regulation rollbacks that would dramatically deregulate oil and gas production, the state's most lucrative industry.
'We are driving a dagger straight into the heart of the climate change religion,' Zeldin said.
At the time, Rep. Matthew McQueen (D-Galisteo) said, 'Right now, we're focused on what we have in front of us and what we can get across the finish line.' The short, two-month session kept state representatives and senators focused on immediate state matters, which took the form of 1,182 bills. Only 195 of those passed both chambers and went to Gov. Michelle Lujan Grisham for consideration and signature into law. Given the tidal wave of legislation and the session's tight timeframe, McQueen said, 'It's difficult to react to breaking changes coming out of Washington,' dagger or no.
McQueen sponsored or co-sponsored five industry-related bills, though only one made it all the way through: a very specific royalty rate increase on new state leases in the most lucrative acreage of the Permian Basin, the nation's most prolific and profitable oilfield. It is one of just two notable changes for oil and gas producers in the session. The second successful bill ties state penalties for pipeline safety violations to the federal penalty rate, doubling the state's current level. A fiscal impact report estimated the change might bring the state, at most, another $125,000 a year, depending on the number of violations. The report also warned that under this arrangement the state penalty would be jeopardised should the federal government penalty change or be scrapped.
Many legislators and Lujan Grisham tout what they call 'nationally leading' methane capture rules for the industry. But rules are not laws, and this session, McQueen again sponsored a bill that would put the state's natural gas capture requirements into law. His bill lingered for three weeks on the House floor and died there without a hearing when the session ended.
'Frustrating is the word for the Legislature,' McQueen said. 'Last year, this year, every year.'
'A mixed bag' is how Lujan Grisham described it to Capital & Main.
'Not having the 98% capture requirement in statute makes the entire methane rule vulnerable to wholesale repeal by a future administration,' Lujan Grisham said. 'The legislature denied too many common sense regulatory changes.'
Another bill, sponsored by state Sen. Mimi Stewart (D-Albuquerque), would have set in law one of Lujan Grisham's first acts upon taking office in 2019, calling on the state to reduce its greenhouse gas emissions by at least 45% by 2030 compared to 2005 levels. That would likely require dramatic reductions in oilfield emissions by the industry. The New Mexico Oil and Gas Association took out a $126,000 online ad campaign to help defeat the bill, targeting both Stewart and state Sen. Benny Shendo (D-Jemez Pueblo). Later, in a Senate Finance Committee hearing, Shendo sided with all of the committee's Republicans and state Sen. George Muñoz (D-Gallup) to kill the bill. Muñoz is one of the top 10 recipients of oil and gas campaign contributions in the Legislature.
Asked how the industry fared in the session, Missi Currier, president and CEO of the New Mexico Oil and Gas Association, said, 'NMOGA members sincerely appreciate the legislators who understand the vital role the oil and gas industry plays in New Mexico's economy.'
The Legislature doesn't only haggle over new laws; it also budgets for the state's two oil and gas enforcement agencies as well.
Ozone levels in New Mexico's portion of the Permian Basin have exceeded Clean Air Act standards for six years now, and the EPA hasn't acted.
The Oil Conservation Division of the Energy, Minerals and Natural Resources Department is the primary enforcer of New Mexico's oilfield rules. It also supported several new regulatory bills that would have updated portions of its foundational Oil and Gas Act, which hasn't seen a major update in decades. This is the third session in a row that updates to the Act have died of inertia.
One example: a bill that would have increased penalties and fees that haven't changed in years and was forcefully supported by the Oil Conservation Division made it through two committee hearings and then stalled. Lujan Grisham said its failure 'continues a distressing trend' of the Legislature not passing bills the Oil Conservation Division has repeatedly asked for.
Speaking at a legislative committee hearing in November, Melanie Kenderdine, the Energy, Minerals and Natural Resources Department secretary, said that New Mexico ranked second among states in oil production, but ninth in regulatory staffing, and she asked for more staff.
In the end, the division received a $7,992,700 budget increase over last year, $4.9 million of that in federal funding, according to Sidney Hill, the public information officer for the Energy, Minerals and Natural Resources Department. But, he said, 'There are no additional positions added for OCD in the operating budget.'
And, he said, 'None of [the EPA] actions would overturn EMNRD regulations or programs designed to protect the environment and move our state to a clean-energy future.'
It's a different story at the state's Environment Department, which, for the past few years, has had a rocky relationship with Sen. Muñoz, head of the Senate Finance Committee and the overarching Legislative Finance Committee.
This year, the Environment Department is restructuring to consolidate multiple enforcement agencies currently spread across the department's many programs into a single Compliance and Enforcement Division. And the Legislature doesn't give money in a lump sum to the department — it specifies how much goes to each division within. Drew Goretzka, director of communications at the Environment Department, said that while the department's overall budget remained flat year-on-year in the Legislature's main finance bill, the new Compliance and Enforcement Division received only half of its $6 million request. Goretzka said it's too early to tell what effect that will have since the division is new.
The Air Quality Bureau at the Environment Department monitors everything from quarry dust to asbestos to smoke across the state. Even so, until the restructuring, roughly 70% of its enforcement work dealt with the oil and gas industry. In the past, James Kenney, the Environment Department secretary, has said that inspectors find roughly half of oil and gas facilities don't meet state rules, and that's reflected in the enforcement numbers. Furthermore, ozone levels in New Mexico's portion of the Permian Basin have exceeded Clean Air Act standards for six years now, and the EPA hasn't acted. Outside scientists who monitored the air in the small town of Loving, New Mexico, said that while the rest of the country has improved its air quality, 'This area has gone backwards.'
'Concerning' is what Lujan Grisham called the lowball enforcement funding. 'The path forward must include adequate resources to ensure all industries, including oil and gas, operate responsibly while contributing to our state's economy,' she said.
What's happening at EPA is a disaster … I cannot overstate the risk we now all face.
– Erik Schlenker-Goodrich, Western Environmental Law Center
For the past few years the Environmental Protection Agency, the Justice Department and the New Mexico Environment Department have worked together on oilfield sweeps that have turned up polluters and sparked enforcement actions. Goretzka said those projects are still ongoing. It's not clear if that will continue, or if New Mexico will be able to do the work on its own.
'NMED's air permitting and compliance programs are underfunded,' Goretzka said. 'EPA augmented our resources with technical staff, legal staff, contractors, and technologies like aerial surveillance.' He continued, 'The lack of such personnel and technology will certainly impact our oversight of industry.'
Erik Schlenker-Goodrich, executive director of the Western Environmental Law Center, said, 'What's happening at EPA is a disaster … I cannot overstate the risk we now all face.' His group has spent years holding state, federal and industry feet to the fire over environmental violations.
'Folks will, of course, fight all of this … but litigation takes years to resolve,' he said. Meanwhile, the EPA's moves to undercut oil and gas enforcement 'will cause dramatic, adverse harm to human health, our air and water, and our lands.'
Joe Robledo, the usually affable press officer for the EPA Region 6 office that oversees New Mexico, responded to questions about the March 12 announcement with uncharacteristic bluster mirroring Zeldin's original announcement:
'With Administrator Lee Zeldin's historic announcement on March 12, New Mexico will see the fulfillment of President Trump's promise to unleash American energy, lower the cost of living, restore of [sic] the rule of law, and give power back to the states to make their own decisions — all while accomplishing EPA's core mission of protecting human health and the environment. In the days and weeks ahead, EPA will provide more information about this effort.'
The EPA has provided no more information in the three weeks since Robledo's response. It has, however, clawed back money and accused the National Clean Investment Fund and Clean Communities Investment Accelerator — both Biden Administration projects — of 'fraud, waste and abuse.' The U.S. Department of Justice and Federal Bureau of Investigation have opened criminal investigations against the two groups, which fund climate-related projects in New Mexico.
'We expect those criminal investigations — which reek of lies and fabrications — to expand against anyone who opposes the administration's actions,' Schlenker-Goodrich said. 'Coupled with grotesque attacks on our federal workers and scientific research, it's impossible not to be enraged at all the absurd, noxious and authoritarian bullshit.'
Back at the Legislature, industry regularly touted the billions paid into state coffers from oil and gas taxes — about a third of New Mexico's $10.8 billion operating budget. Speaking during a committee hearing, Rep. Derrick Lente (D-Sandia Pueblo), the chair of the House Taxation & Revenue Committee, said that oil and gas companies still made $10 billion in net profits in New Mexico in 2024 after paying their taxes.
The industry also directly accounts for at least a third of New Mexico's total greenhouse gas emissions, according to the state's latest inventory. And while the Legislature didn't do anything to curb those particular emissions, it did pass legislation that will help New Mexicans cope with their climate change effects. Wildfire preparations, forest and watershed buffer projects, zero-interest natural disaster loans, flood recovery bonds and a community benefit fund for climate impact preparations — all passed the Legislature and await Lujan Grisham's signature.
And a third of the money to fund all of those initiatives will come from oil and gas revenues, the industry producing and protecting the carbon fuels that drive climate change 'religion' in the first place.