2019 Legislative Session

Bipartisan vote spikes bill to raise oil and gas royalties

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A handful of Democrats joined with Republicans at the Legislature on Friday to quash a bill that would have allowed the state to charge higher royalty rates on some oil and gas production. The first committee hearing for House Bill 398 turned into a showdown between New Mexico’s influential oil industry and a newly elected Democratic land commissioner who came to office pledging to collect a greater share of revenue from oil produced on the millions of acres her office controls. Land Commissioner Stephanie Garcia Richard argued that raising royalty rates is strictly good business for a state rich in oil and gas but that has one of the highest rates of poverty in the country. But the oil and gas industry countered that it already generates a large share of the funds for New Mexico’s government through taxes and royalties. Raising royalty rates, representatives from the industry argued, would drive away business and ultimately hurt the state.

Oil & Gas

Oil price comeback brightens state revenue projections

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Good news from New Mexico’s oil patch is boosting revenue growth for state government, economists said Thursday, providing a projected cash cushion of over 11 percent by the end of June for the state’s general operating fund. And so far, there is no shortage of ideas for how to spend that money — they range from additional dollars for crime prevention in Bernalillo County to state employee pay raises and the expansion of tax breaks for National Guard service to the film industry, local shopping, residential solar projects and pilot training. Gov. Susana Martinez also is hoping to reduce the gross receipts tax burden on manufacturing and service businesses by removing tax pyramiding. Economists, however, warn that the money flowing into New Mexico’s coffers from oil production is volatile — and the state is coming out of two years in which budgets were slashed because of falling revenue. That collapse was related to a fall in oil prices, as the decline brought less drilling, spawning industry layoffs and less spending by business and consumers in oil-dependent corners of the state.

Beckham Ranch

Audit finds city may have violated law with water deal

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A special audit of the city of Jal found government officials in the southeastern New Mexico oil patch town gave “improper billings and adjustments” of more than $660,000 between 2008 and 2016. Those billings may violate New Mexico’s anti-donation clause, State Auditor Tim Keller concluded, which bars local and state governments from making donations to private individuals. The audit comes after NM Political Report and the Jal Record reported last September that city officials gave a local rancher a $1.2 million discount on commercial water use between August 2012 and April of 2014. At the same time, the city raised water rates on other customers. Jal officials also continued selling industrial water to the the Beckham Ranch, Inc., for six months after a ban on industrial water sales went into effect.

BP America

In heart of Southwest, natural gas leaks fuel a methane menace

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BLANCO, N.M. –  Most evenings, the quiet is almost intoxicating. The whoosh of the wind through the junipers, the whinny of horses in their stalls, the raspy squawking of ravens – those are the sounds Don and Jane Schreiber have grown to love on their remote Devil’s Spring Ranch. The views are mesmerizing, too. Long, lonesome ridges of khaki-colored rocks, dome-like outcrops and distant mesas rise from a sea of sage and rabbitbrush. The ranch and surrounding countryside are a surprising setting for an enduring climate change problem: a huge cloud of methane – a potent, heat-trapping gas – that is 10 times larger than the city of Chicago.

2017 Legislative Session

Proponents of early ed measure struggle to secure House votes

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Supporters of a popular idea among Democrats — a proposed constitutional amendment that would take between $153 million and $163 million a year in the first three years from the state’s land grant endowment to expand early childhood education — are having a difficult time mustering the votes to get it through the state House of Representatives. House Joint Resolution 1 has been waiting all week to get a floor vote. Word got out Friday that the resolution once again would not be heard, even though it was the top item on the House calendar. The measure would amend the state constitution to draw less than 1 percent a year from the endowment to pay for early childhood education. The sponsors of the proposal, Democratic Reps.

NM Legislature

Santa Fe legislators seek curbs on parcel’s redevelopment

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Santa Fe is the hometown of the state’s two most powerful legislators, and they are using their collective might to try to restrict what can be developed on the downtown parcel that’s now home to Garrett’s Desert Inn and Santa Fe Bite restaurant. Speaker of the House Brian Egolf and Senate Majority Leader Peter Wirth grew up in and around Santa Fe’s Historic District, so they have written Senate Bill 409 to protect it. The measure would shape redevelopment at 311 Old Santa Fe Trail. The New Mexico State Land Office acquired the 2.7 acres in a land swap. State Land Commissioner Aubrey Dunn said there is interest from developers across the country in a 60-year lease with the state to bring in retail, residential and commercial tenants.

Bureau of Land Management

Martinez wants Congress to repeal methane rule

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Gov. Susana Martinez is urging Congress to repeal a federal rule that seeks to stop the waste of methane from oil and gas producers. Martinez sent a letter to U.S. Speaker of the House Paul Ryan, R-Wisc., outlining her opposition to the rule, which was put in place by the Bureau of Land Management during the Barack Obama administration. Martinez argued that it would mean less royalties to state and federal governments. “Rather than allowing this misguided rule to move forward, I urge you to repeal the rule and work with the Department of Interior to address the infrastructure challenges currently causing venting and flaring events to occur,” Martinez wrote. “Insufficient pipeline capacity and gas processing capacity make it difficult for producers to capture and sell as much of their product as possible.”

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Jal water deal

State auditor opens special audit on Jal water issues

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State Auditor Tim Keller recently designated the City of Jal for a special audit on the city’s water billing issues. The move comes two months after Keller’s office opened a case into an arrangement where the city in the southeastern New Mexico oil patch gave a local ranch a discount on utility water worth $1.2 million over a 25-month period between 2012 and 2014. NM Political Report, in partnership with the Jal Record, first reported on the city’s water deal with the Beckham Ranch in September. Related: State Auditor to investigate Jal water deal

In a Dec. 2 letter to Jal Mayor Cheryl Chance*, Keller writes the special audit will look at Jal’s “compliance with applicable laws, regulations, policies and and procedures with respect to water utility billing practices.”

Jal City Manager Bob Gallagher told NM Political Report that he is “extremely pleased” with the state auditor’s decision for the special audit and said he has been cooperating with Keller’s office on the matter for the past two months.

Oil & Gas

Heinrich, Udall praise Obama admin Standing Rock decision

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Both U.S. Senators from New Mexico were quick to react to the Sunday news that President Obama’s administration would not approve an easement that would allow the controversial Dakota Access Pipeline to move forward in its current proposed route. The Standing Rock Sioux Nation said while the proposed path did not cross their land, it would have brought the oil pipeline too close to the tribe’s lone source of water. The fight over placement of the pipeline led to members of the Standing Rock Sioux Nation and other supporters holding high-profile protests for months. Sens. Martin Heinrich and Tom Udall praised the decision, which requires the U.S. Army Corps of Engineers to consider alternate routes for this portion of the pipeline.

ALEC

Land Commissioner to pitch expanding drilling to fund early childhood education to ALEC

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New Mexico’s Commissioner of Public Lands is slated to speak Friday with a group of conservative-minded state lawmakers in Washington D.C. about his proposal to transfer federal mineral rights on private lands to the state. Land Commissioner Aubrey Dunn is also planning to meet with members of Congress in order to urge them to approve the transfer, according to spokeswoman Emily Strickler. In an email to NM Political Report, Strickler said Dunn is promoting his Early Childhood Education Land Grant Act to state lawmakers at an American Legislative Exchange Council (ALEC) policy summit. Related: BLM finalizes rule to limit methane emissions

“The group Commissioner is presenting to at ALEC would not be voting on this legislation, but may be interested in using the legislation as a model for legislation in their states,” Strickler wrote. “Also, Commissioner will be meeting with New Mexico’s congressional delegation while in D.C. to discuss this legislation because it needs congressional approval.”

ALEC members use model legislation to spread laws throughout states, with the most high-profile example perhaps the so-called “Stand Your Ground” laws that are in place in several states.