September 14, 2015

Plan seeks to update state’s energy policy

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Cover photo from 2015 New Mexico energy plan.

Gov. Susana Martinez unveiled a state energy plan on Monday morning at the Southeastern New Mexico Energy Summit in Carlsbad.

Cover photo from 2015 New Mexico energy plan.

Cover photo from 2015 New Mexico energy plan.

Martinez’s office called the plan the first such comprehensive policy for New Mexico in 25 years and the plan is predicated on energy abundance.

The plan is available on the state Energy, Minerals and Natural Resources Department website.

“New Mexico is one of the most energy-rich and energy-diverse states in the nation, and we have an excellent opportunity to utilize this position to grow our economy and create more jobs,” Martinez said in a statement. “Improving our energy infrastructure, responsibly developing and producing energy of all types, and better preparing our workforce for the needs of our energy sector are all critical components not only of a strong economic future, but of helping lead America to energy independence.”

Martinez described the policy as an “all of the above” approach (which echoes the name of the energy plan by the Barack Obama administration that was described the same way).

In the introduction to the plan, Martinez noted that technology has changed since the last such attempt at a comprehensive energy policy in 1991. She cited “the shale oil and gas revolution,” referring to fracking, and the lower prices for renewable technologies like wind and solar.

EMNRD secretary David Martin noted in his introduction that New Mexico “is reaching the all-time record production of the 1970s, and New Mexico produces more renewable energy now than at any other time in state history.”

Oil and gas

The plan acknowledges the major impact that oil and gas has on New Mexico’s economy and state budget. State revenue from oil and gas made up nearly one-third of the 2013 budget. But the report acknowledges that sometimes this can be adversely effected by things outside of New Mexico’s control.

When the Organization of Petroleum Exporting Countries, or OPEC, drove down oil prices, this impacted New Mexico’s oil producers.

From the report:

Breakeven costs for oil producers are estimate to range from $52 to $70 in the San Juan Basin and $40 to $55 in Southeast New Mexico. Oil producers respond to these market signals by reducing the number of new wells drilled, potentially shutting in some producing wells, and stopping production on marginally producing wells; all of these activities have implications for New Mexico’s economy.

Infrastructure

The plan calls for an overhaul of infrastructure in New mexico, which “includes pipelines, roads, rail, processing and refining facilities, and electricity infrastructure.” The recent “massive increase in oil and gas production” has strained that infrastructure.

One recommendation to address the infrastructure problems is to support a study of the feasibility of a rail branch line from I-40 to the Four Corners area. Another says to support more “pipeline infrastructure” between New Mexico and the Mexican state of Chihuahua to provide natural gas.

This also ties to public health and safety recommendations, which says that small towns—especially in northwest New Mexico—that are not used to heavy traffic from large vehicles are now seeing trucks with oil.

The plan recommends the establishment of “public safety regulations of the oil trans-loading industry and assist affected towns and counties with technical information for guidance and planning purposes.”

One of the twelve objectives in the plan deals with the regulatory process when it comes to the energy industry. The plan recommends that New Mexico seeks agreements with the federal Bureau of Land Management “to streamline permitting, operating requirements and inspections to avoid duplication and promote consistency with the state rules.”

The plan also wants closer work between the state and tribal authorities, specifically mentioning a backlog on permits on “Navajo allotted lands in the San Juan Basin,” to speed up the process to allow oil and gas drilling.

The plan also calls to look at the state policies on nuclear power generation. There have been no new nuclear energy facilities in the United States since 1978. The nuclear infrastructure in New Mexico includes a uranium enrichment plant in Lea County. It is the only such facility in the United States.

The executive summary of the plan says the plan itself is the result of conversations with around 450 people, including energy industry and state and local governments. These included six listening sessions throughout the state.