The Permian Basin became the world’s most productive oilfield in 2019, and New Mexico is reaping the financial benefits. The state saw a significant revenue surge this year, resulting in a projected $7.8 billion collected.
The New Mexico Oil and Gas Association estimates the state produces 900,000 barrels of oil a day. It anticipates the state will surpass 300 million barrels of oil in 2019, the third year in a row for the state for record-setting production. Projections from the state’s Legislative Finance Committee (LFC) predict the state could see over $900 million in new money in 2020, due in large part of growing oil and gas royalties generated in 2019. Oil and gas now makes up 40 percent of the state’s budget.
After a revelatory Department of Defense report in 2018 identified 126 military bases where firefighting training activities had contaminated groundwater sources, the New Mexico Environment Department (NMED) issued two notices of violation against the Air Force over PFAS groundwater contamination at Cannon and Holloman Air Force Bases. PFAS, or per- and poly-fluoroalkyl substances, are toxic, human-manufactured chemicals that move through groundwater and biological systems. Human exposure to PFAS increases the risk of testicular, kidney and thyroid cancers as well as other severe illnesses. The chemicals were used in firefighting foam in military installations across the country. In January, the U.S. Air Force responded to the first notice of violation for contamination at Cannon Air Force Base with a lawsuit against the state, challenging NMED’s authority to compel PFAS cleanup under the state permit. A month later, NMED issued a second notice for groundwater contamination at Holloman, where PFAS contamination levels in some areas were found to be 18,000 times the federal “lifetime” drinking water exposure advisory levels for the chemicals.
When Gov. Michelle Lujan Grisham signed the Energy Transition Act into law in March, she called the law “transformational” and “a really big deal.”
“The Energy Transition Act fundamentally changes the dynamic in New Mexico. This legislation is a promise to future generations of New Mexicans, who will benefit from both a cleaner environment and a more robust energy economy with exciting career and job opportunities,” she said at the time in a statement. But the first attempt to implement the new law hasn’t been smooth. The investor-owned utility PNM announced in 2017 that it planned to close the San Juan Generating Station, a coal-fired plant located outside Farmington. But PNM didn’t formally submit to the Public Regulation Commission (PRC) its consolidated application for abandonment, securitization and replacement power for the power plant until July 2019, weeks after the Energy Transition Act had been signed into law.
The U.S. has oscillated from being the largest economy to participate in the 2015 Paris Agreement on climate change to becoming one of the world’s strongest voices promoting the continued burning of coal and other fossil fuels. New Mexico has had a front row seat to that change, of course. In 2019, the Permian Basin became the world’s most productive oilfield, and New Mexico has emerged as a top oil-producing state.
Oil and gas expansion across New Mexico and Texas will be a chief driver of future greenhouse gas emissions in the U.S., according to a recent report compiled by 15 global environmental groups that was released ahead of the U.N. climate-focused COP25 conference held in Madrid this year.
“Right now, the Permian Basin is the biggest projected driver of oil and gas expansion — not just in the U.S. but in the world,” said Kelly Trout, senior research analyst at Oil Change International, a research and advocacy group. Trout was a contributor to the report.
“Our data shows that the potential year of peak production for the Permian Basin in 2032,” Trout said. “The Permian Basin itself could produce more oil and natural gas liquids than Saudi Arabia [at that time].”
U.S. outpaces all other countries in planned oil and gas expansion
The U.S. is poised to outpace every other country in the world in new oil and gas development, according to the report.
The Office of the State Engineer awarded the state’s first water rights permit to keep water in a river. The office granted the permit to Audubon New Mexico for a stretch of the Gallina River near Abiquiu. Riparian areas, including rivers, streams and wetlands, account for just 1 percent of the New Mexico landscape, and have been stressed by decades of drought and a warming climate. A recent World Resources Institute study ranked New Mexico as the most water-stressed area in the United States. Surface water rights in the state are typically granted to individuals for diverting water from streams and rivers to irrigate crops and support food production.
In early November, the New Mexico Department of Game and Fish formally rejoined the federal Mexican Wolf Recovery Program as a lead agency. The department signed a memorandum of understanding with the U.S. Fish and Wildlife Service to establish a framework for collaboration with Fish and Wildlife on the recovery program for the endangered animal. On November 14, just one week later, a Mexican gray wolf pup was caught and injured in a leghold trap that had been set in the Gila National Forest. A second wolf pup was later spotted \with a piece of another leghold trap still attached to its injured paw.
RELATED: Border wall poses new problems for the endangered Mexican Gray Wolf
Nine months earlier, four other wolves were caught in traps in the same area. One of those wolves died, while another had its leg amputated.
The Environmental Protection Agency released a new interim decision allowing the use of sodium cyanide bombs, also called M-44s, on Thursday. The agency released its revised decision on the controversial devices after retracting the initial interim decision in August. M-44s date back to the 1970s and are used to kill coyotes and other predators that threaten livestock. The spring-loaded device is inserted into the ground, and topped with scented bait to attract carrion-feeding animals. When an animal bites down on the bait, the spring shoots a pellet of powdered sodium cyanide into the animal’s mouth.
On a chilly evening in October, Santa Fe-area residents packed into the St. Francis Auditorium for the second of what would be five public meetings held by the New Mexico Environment Department on the state’s plans for produced water. It was only a matter of minutes before attendees began interrupting the presentation with accusations of the state poisoning waterways and calls for a moratorium on fracking in the name of climate change. Residents and environmentalists alike are concerned about the state’s plan to research and eventually regulate the recycling and reuse of treated produced water, a byproduct of oil and gas extraction that contains both naturally-occurring minerals, hydrocarbons and rare earth metals, as well as chemical additives and drilling constituents that are used in hydraulic fracking. Every barrel of oil generates four to seven barrels of produced water, according to Bill Brancard, general counsel of the state’s Energy, Minerals and Natural Resources Department (EMNRD).
Energy engineer and consultant David Schlissel questioned some of the claims presented by Enchant Energy and consulting firm Sargent & Lundy on the feasibility of retrofitting the San Juan Generating Station with carbon capture system technology. PNM, the majority stakeholder in the plant, plans to shutter the facility by 2022 as part of the utility’s wider goal of ending all coal-fired power generation in its portfolio by 2031. That strategy aligns with Gov. Michelle Lujan Grisham’s Energy Transition Act (ETA) law, which would require 50 percent of the state’s electricity generation to come from renewable energy sources by 2030.
Enchant Energy has proposed acquiring 95 percent of the coal-fired San Juan Generating Station to install a carbon capture system that it says would offer a cost-effective, low-emission solution to keep the coal-fired plant open beyond 2022. Schlissel testified his concerns about the proposal before the Public Regulation Commission in response to the recent testimony of PRC staff witness Dhiraj Solomon, acting engineering bureau chief of PRC’s utility division. Solomon argued that a carbon capture system would enable the plant to operate within the emission requirements of the ETA.
Sierra Club filed Schlissel’s testimony with the PRC late last week.
Nelson Cordova’s commanding presence quieted an audience gathered in one of the large ballrooms at Buffalo Thunder in Pojoaque. Cordova, who is the director of the Taos Pueblo Water Administration Department, was about to begin his presentation on the Taos Indian Water Rights Settlement, also known as the Abeyta Settlement, at the New Mexico Water Resources Research Institute’s 64th annual Water Conference.
The event, focused on tribal perspectives on water this year, drew a who’s who of water experts, researchers and engineers in the state, as well as an impressive showing of tribal leadership from across New Mexico’s indigenous nations. Water rights settlements were top of mind for many attendees.
Speaking to the crowd, Cordova voiced what has become a common refrain among settlement parties: “Not everybody got what they wanted.”
Congress approved the Taos Indian Water Rights Settlement in 2010, 41 years after adjudication was first filed in 1969. The settlement was one part of a wider push from the state to enshrine tribal water rights into law before appropriating water to other parties. Nelson Cordova, director of the Taos Pueblo Water Administration Department, speaking at the 64th Annual Water Conference, held at Buffalo Thunder.