Next week, the New Mexico House Energy, Environment, and Natural Resources Committee will consider HB 133 (fact sheet here), a governor-initiated bill crafted with the involvement of climate, environmental, and community groups as well as the oil and gas industry. The Western Environmental Law supports this bill as a positive step forward for New Mexico.
HB 133 would provide much needed updates to the 1935 Oil and Gas Act. According to Sidney Hill of the New Mexico Energy, Minerals and Natural Resources Department, “[t]he act no longer contains all the tools necessary to oversee the current industry and ensure robust environment protection.”
HB 133 would amend the Oil and Gas Act to better protect human health and the environment from oil and gas operations, better ensure that oil and gas companies properly clean up and reclaim oil and gas infrastructure, deter violations of the act by increasing civil penalties, and codify a 98% methane waste requirement into law to ensure the long-term viability of the state’s nationally leading methane rules promulgated in 2021.
“Representatives in EMNRD and bill sponsors Rep. Ortez and Rep. McQueen deserve kudos for running such an inclusive process with nearly 50 stakeholders to develop HB 133 into an eminently reasonable bill that would create a more just oil and gas program in the state,” said Tannis Fox, senior attorney with the Western Environmental Law Center.
The science tells us that the closer one lives to oil and gas operations, the greater the health risks from emissions of hazardous and toxic pollutants. In New Mexico, a disproportionate number of persons of color, low-income persons, children, and seniors live near oil and gas wells. HB 133 would help reduce risks to frontline communities by establishing minimum “setbacks” for new wells. Oil and gas operations also present risks to New Mexico streams, wetlands, acequias, and habitat through spills.
This risk has intensified as a result of the U.S. Supreme Court’s extreme attacks on bedrock federal environmental laws, including laws that protect New Mexico’s rivers, streams, and wetlands from industry pollution. These setbacks would not apply to existing oil and gas infrastructure or Tribal lands and Tribal allotted lands, respecting their sovereign authority to make their own decisions regarding use of their resources.
In addition, the amendments would significantly improve bonding rates to reduce the taxpayer burden for cleanup of orphaned and abandoned oil and gas wells, of which there are currently 1,700 in New Mexico. HB 133 would direct the Oil Conservation Division to promulgate rules providing for an increase of “blanket bond” levels from $250,000 to $10,000,000, better reflecting the true cost of well clean up and reclamation in New Mexico. The State Land Office, in 2021, determined that “New Mexico’s oil and gas industry is inadequately bonded to the tune of $8.1 billion.”
Across New Mexico, approximately 1,700 orphaned and abandoned oil and gas wells threaten our air, land, and water. Oil and gas operators provide the state bonds as financial assurance to fund plugging and cleanup of wells if a company goes out of business or abandons a site. The average cost to plug a single well is over $100,000, rendering the Oil and Gas Act’s existing maximum “blanket bond” cap of $250,000—which is applied even if a company owns hundreds of wells–wildly inadequate. This inadequate bonding level means that state taxpayers are left to fund cleanups of orphaned and abandoned wells.
Additionally, HB 133 protects against the growing orphaned and abandoned well problem by providing new authority for the state to block the transfer of oil and gas assets, when a company has a “significant history of noncompliance with the Oil and Gas Act or its rules” or the transferee seeking to acquire the assets “lacks sufficient financial capacity to manage liabilities associated with oil and gas wells or facilities.”
HB 133 would also increase civil penalties for violations from $2,500 per day to $10,000 per day, and increase the penalties for violations that threaten human health and the environment from $10,000 per day to $25,000 per day, and eliminate the $200,000 cap on total, cumulative civil penalties. The bill would update administrative fees for the 21st century and allow future adjustments for inflation.
“We support this bill,” said Fox. “But make no mistake, oil and gas lobbyists and their legislator friends are actively trying to kill or weaken this bill in the hustle and bustle of a short legislative session. They’ve put corporate profits over the interests of New Mexicans who have suffered serious public health burdens from oil and gas pollution and harm to their lands and waters. The least they can do is provide assurances that they’ll clean up their mess without burdening taxpayers and be a good neighbor to people and communities. The time for action is now.”
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