Sister Joan Brown, Others Call for Stronger Oil and Gas Clean-Up Rules

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On June 24, advocates across New Mexico petitioned the Oil Conservation Commission to modernize woefully outdated laws governing oil and gas cleanup, financial assurance and operator transfers. New Mexico’s oil and gas industry is inadequately bonded to the tune of $8.18 billion according to a study commissioned by the New Mexico State Land Office and conducted by the Center for Applied Research

This is a huge financial burden which risks falling on the shoulders of taxpayers. Bonding is essentially “insurance” that would cover the cleanup of well sites in the event that oil and gas companies walk away from their responsibilities, and is legally required prior to drilling.

Petitioners include the Western Environmental Law Center, Citizens Caring for the Future, Conservation Voters New Mexico Education Fund, Diné C.A.R.E., Earthworks, Naeva, New Mexico Interfaith Power and Light, San Juan Citizens Alliance, and Sierra Club Rio Grande Chapter. The Western Environmental Law Center represents the coalition.

Old, abandoned, and orphaned oil and gas sites can leak methane and other pollution into the air and water, threatening New Mexicans’ health and the environment. An overwhelming 90% of New Mexicans support requiring oil and gas companies, rather than taxpayers, to pay for cleanup and land restoration costs after oil and gas production comes to an end.

Representatives from the organizations offered comment in a news release. Here is a statement from Sister Joan Brown, executive director of Interfaith Power and Light-New Mexico and El Paso Region.

“Abandoned and orphaned oil and gas wells or those not properly dealt with accelerate climate change, threaten health, harm future generations and lay a burden upon ordinary people. Stronger bonding in the oil and gas field in New Mexico is an ethical action and helps industry with their moral responsibility of clean-upAre we not we all called to care for our neighbor and this sacred land, water and air that is a gift?”

The Petition

The petition includes:

  • Updating financial assurance laws to require bonds of $150,000 per well for high risk wells that fully cover the costs of clean up, well plugging, and site remediation. The Oil Conservation Division estimates that well plugging costs the state $150,000 per well.
  • Placing limits on the time that inactive wells can remain idle and requiring plugging and reclamation for wells that don’t come back into use.
  • Requiring oversight of operator transfers to better ensure companies have the financial resources to properly clean up, plug, and reclaim well sites, and ensuring companies are in compliance with federal and state oil and gas laws before taking on additional well operations.

Ensuring oil and gas companies properly clean up their pollution and fully restore well sites when extraction ends, will open new doors to clean air, clean water, and new jobs for New Mexicans by:

  • Creating new jobs in the oil and gas field for displaced oil and gas workers. Timely clean-up of inactive wells could inject more than $8.2 billion into the New Mexico economy and support 65,337 jobs, paying $4.1 billion in wages, salaries, and benefits, according to a 2021 study.
  • Protecting drinking water supplies. Ninety percent of New Mexicans rely on groundwater for their drinking water. Oil and gas wells are drilled through aquifers and when left to degrade, can threaten our vital water supplies by leaking dangerous toxic pollutants.
  • Protecting the air we breathe. When a well is left unattended without proper cleanup and restoration, it can contribute to air pollution and emit methane—a powerful greenhouse gas.
  • Reflecting New Mexicans’ values. New Mexicans want out-of-state corporations to pay their fair share and act responsibly, including cleaning up their own messes. Our laws and our government should reflect New Mexico’s basic value of respect for all people.

See full press release from Western Environmental Law Center

Public News Service Highlights Our Event

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Today the New Mexico News Connection ran the story New Mexico panelists tackle food, farming and fairness. The coverage is related to our event Our Sacred Lands: Food, Farming, and Fairness, scheduled on Wednesday evening, March 6, at 6:00 p.m. at First Congregational Church, 2801 Lomas Blvd SE The event offers the option of in-person attendance or virtual attendamce.

New Mexico News Connection is a part of Public News Service, an independent network of state-based news services. Our goal is threefold: to support an informed and engaged public, fund independent journalism, and tell the stories of people doing public interest work in communities across the country. You can also check out our social media listed below.

IPL New Mexico-El Paso, Citizens Caring for the Future Join 27 Other Groups in Petition to Governor

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IPL New Mexico & El Paso and Citizens Caring for the Future were among a group of 29  environmental and civic organizations signing a letter to Gov. Lujan Grisham urging her to line-item veto parts of House Bill 252 that would create an oil and gas severance tax exemption for “stripper well properties” for the costs of complying with the state’s 2021 methane waste rule and 2022 ozone precursor rule. If signed into law, this bill would perversely give companies a tax break for costs incurred to protect the public against hazards of these businesses’ own creation.

We adapted the above paragraph from an article written by The Western Enviromental Law Center. Here is the rest of the piece

“In its analysis, the New Mexico Legislative Finance Committee found the exemption could cost the state $17.2 million in revenue between fiscal years 2025 to 2028, reduce bonding capacity by $18.8 million over the same time period, increase the Oil Conservation Division’s annual operating costs by $200,000, and require two new full-time-equivalent OCD employees. This tax giveaway to oil and gas operators therefore comes at the expense of the severance tax’s permanent fund and agency capacity at the precise time the state should be leveraging its resources to prepare for the inevitable decline of oil and gas revenue and production.

“House Bill 252’s oil and gas severance tax exemption reflects well-founded public concerns that the political deck is decidedly stacked in favor of the oil and gas industry, not the people of New Mexico,” said Erik Schlenker-Goodrich, executive director of the Western Environmental Law Center. “The oil and gas industry secured this severance tax exemption in the shadows while gutting sensible oil and gas reforms backed by the Lujan Grisham administration and other state officials. Line-item vetoing HB 252’s oil and gas severance tax exemption provides Gov. Lujan Grisham with an opportunity to stand strong for the people of New Mexico.”

Several state agencies expressed concern with the severance tax exemption:

  • The New Mexico Taxation and Revenue Department wrote in its fiscal impact report that the exemption “[w]ould set a precedent in tax policy that businesses may lower their tax liability to financially support complying with other business regulations and laws for operations. All businesses across all industries have business costs to meet varying laws, regulations and reporting. This would erode horizontal equity among taxpayers.”
  • The New Mexico State Land Office warned the exemption “[w]ould incentivize producers to continue operating poorly producing stripper wells [and] could result in the state/taxpayers incurring the legacy remediation and reclamation costs of the wells.”
  • And, as observed by the Attorney General, “[t]he Severance Tax Act and the Incentives Act already give favorable tax treatment to production from stripper wells.”

“A fundamental economic principle is businesses should bear the external social costs they create,” said Kayley Shoup, community organizer for Citizens Caring for the Future. “Oil and gas operators—not the public—should pay the compliance costs of reducing methane emissions from oil and gas operations to protect our climate and to reduce toxic air pollutants that harm public health. A tax break to the industry that is polluting the air where my neighbors and I live in the Permian Basin is simply not warranted.”

The groups signing on to the letter include the Western Environmental Law Center, 350 New Mexico, Albuquerque Unitarian Universalist Fellowship, Center For Civic Policy, Chaco Alliance, Citizens Caring For The Future, Earth Action, Inc., Earthworks, Environmental Defense Fund, FracTracker Alliance, Indivisible Albuquerque, League Of Women Voters New Mexico, Moms Clean Air Force New Mexico Chapter, New Energy Economy, New Mexico Climate Justice, New Mexico Interfaith Power And Light, New Mexico Sportsmen, New Mexico Voices For Children, New Mexico Voters For Children Action Fund, New Mexico Wild, Progressive Democrats Of America – Central New Mexico, ProgressNow New Mexico, Prosperity Works, Rio Arriba Concerned Citizens, Rio Grande Indivisible, New Mexico, San Juan Citizens Alliance, See (Social Eco Education), and WildEarth Guardians.”