For the last several months, one of the nation’s largest pipeline operators has gone from one local government meeting on the Navajo Nation to another, outlining plans for what could end up being the country’s longest hydrogen pipeline. At those meetings, representatives from Tallgrass Energy have shown a map indicating the pipeline would run from Shiprock, New Mexico, in an arc across the northern reaches of the reservation to a spot north of Flagstaff, Arizona. And according to reports from others who attended the meetings, the final destination may actually be Mexico. This story originally appeared at Capital & Main and is reprinted with permission. Tallgrass Energy, working through a new subsidiary called GreenView, wants to build the hydrogen pipeline because the Navajo Nation is “blessed with a wealth of natural resources” and “We believe they have the right and responsibility to develop and manage these resources, including projects like hydrogen,” says Tallgrass Vice President of Government Affairs Steven Davidson.
A bill to overhaul New Mexico’s 88-year-old Oil and Gas Act passed out of its first committee hearing this week on a straight party vote, while a bill that would have promoted hydrogen production from natural gas disappeared from the Legislature’s calendar. The latest version of the Advanced Technology Energy Act, HB12, died quietly over the weekend without even receiving a committee hearing after its sponsors learned that tribal leaders from across the state strongly opposed it. Mark Mitchell, the chairman of the All Pueblo Council of Governors (which represents 19 pueblos in New Mexico and one in Texas), sent a letter outlining the group’s dismay to four of the bill’s five sponsors. He said tribal leaders were worried about the impacts of advanced technology energy projects “on water, groundwater, cultural resources, and sacred sites.” He then recommended the bill be tabled until legislators addressed tribal concerns. While calling the bill “well intentioned,” Mitchell recommended legislators do a better job of explaining the hazards and communicating clearly with tribal people before the next legislative session.
New Mexico’s Republicans and advocates for oil and gas producers often accuse the state’s ruling Democrats of trying to kill the local fossil fuel industry, but industry donations and agency funding outcomes tell a different story. Democrats hold a lock on all statewide offices and both chambers of the Legislature heading into the midterm elections, and according to data from the Secretary of State’s Office, many of New Mexico’s most powerful Democrats bring in more oil and gas contributions than their Republican counterparts. Often a lot more. And that could be influencing policy in favor of fossil fuel production. This tension plays out in the Legislative Finance Committee (LFC) where, so far in this election cycle, the two Democratic leaders — Rep. Patty Lundstrom and Sen. George Muñoz — received more in oil and gas campaign contributions than any of the Republicans on the committee.
In the past seven months, oil and gas companies have dramatically stepped up their outreach and public relations spending at some of New Mexico’s best-known, best-loved events. The industry also picked up an additional public relations bump from the not unexpected news that oil and gas revenues will add an additional $2.5 billion to next year’s state government budget. This record breaking funding comes on the heels of last year’s record breaking budget, both of them courtesy of record breaking oil and gas production and record breaking oil and gas prices. All of this money sloshing around the state raises the positive public profile of the petroleum industry. Meanwhile, the public sees little of its state Legislature — but that doesn’t mean it’s not busy.
New Mexico officials are asking the federal government to explain why it decided not to impose fines on oil and gas producers it caught violating the Clean Air Act in the state. In May, Capital & Main reported that the Environmental Protection Agency (EPA) found that 24 companies had 111 leaks from wells and other equipment, following an airborne monitoring program over New Mexico’s portion of the Permian Basin in 2019. However, only 11 companies were given violation notices, and only one received a fine for Clean Air Act (CAA) violations. Another company was fined for a permitting violation. Now, James Kenney, secretary of the New Mexico Environment Department (NMED), and U.S. Senator Martin Heinrich have asked the regional EPA office to explain the paltry number of violation notices and fines.
Back in 2020, as oil and gas prices tanked because of the COVID crisis, New Mexico implemented an emergency program that would allow oil and gas producers to temporarily stop production and shut down wells for up to three years without penalty. The state’s Oil Conservation Division (OCD) created the program so that companies could bank petroleum reserves until prices rebounded — a move that would preserve profits for the companies and safeguard future tax revenue from the state’s largest single stream. Understandably, the program proved popular and, at its peak, 34 companies idled 6,505 wells — roughly 12% of the state’s total number of active facilities. As energy prices rebounded and then soared into record territory in the last year, most of those idled wells returned to producing fuel and tax revenue. But not all.
Oil and gas revenues added more than $1.7 billion to New Mexico coffers in the first four months of the year — more than in any other four-month period in state history. A lot more. Records compiled by the New Mexico Tax and Revenue Department show that year-on-year, revenues from January through April more than doubled from $782 million in 2021 — itself a record year. (Records lag by two months to allow producers time to report their production numbers.) This money gusher comes from increasing production in New Mexico’s portion of the Permian Basin — currently the most productive oilfield on the planet — and skyrocketing oil and gas prices brought on by the Russian invasion of Ukraine. This story is by Capital & Main and is republished with permission.
In the fall of 2019, the Environmental Protection Agency (EPA) hired a helicopter equipped with a leak-detecting infrared camera to criss-cross the Permian Basin looking for gaseous emissions, part of a monitoring program undertaken at the behest of and in partnership with the New Mexico Environment Department (NMED). Over the course of nine days, the EPA found leaking valves, leaking hatches, unlit and partially lit gas flares on wells, leaking tank batteries and compressor stations. In all, the flights documented 111 emissions at facilities run by 24 different oil and gas companies. Join our email list to get the stories that mainstream news is overlooking.Sign up for Capital & Main’s newsletter. In 2020, the EPA did it again, this time undertaking 15 days of flights and expanding their range to include part of the San Juan Basin in northern New Mexico.
In New Mexico, new state rules sparked a dramatic increase in reported incidents of vented and flared natural gas in 2021 — and reveal that the oil and gas industry has been losing vastly more of the climate-change-driving fossil fuel than previously reported. “The state’s updated reporting requirements were long overdue,” says Jon Goldstein, senior director of regulatory and legislative affairs at the Environmental Defense Fund. The new numbers are in line with previous EDF research showing huge amounts of vented and flared natural gas in recent years. A review of year-end data from the state’s Oil Conservation Division (OCD) shows that producers vented or flared enough natural gas to power nearly 39,000 homes for a year — roughly the number of households in Las Cruces, the state’s second-largest city. This story originally appeared at Capital & Main and is reprinted with permission.
In mid-November, after months of hinting about an upcoming bill, Gov. Michelle Lujan Grisham’s administration sent a draft Hydrogen Hub Act out to stakeholders for their input. First reactions are not positive. “Let’s be crystal clear,” says Erik Schlenker-Goodrich, executive director of the Western Environmental Law Center, “this bill isn’t a climate or clean energy bill. It’s a fossil fuels bill.”
The 27-page act is designed to make New Mexico a national hydrogen production hub, and 22 of those pages detail tax incentives and tax breaks to promote building production and distribution facilities and other major infrastructure. The rest details how carbon emissions for hydrogen production need to decrease over time and how fresh water cannot be used to make hydrogen if companies are to get the tax breaks.