A boom in the oil and gas industry helped deliver a record-breaking $8.5 billion budget to New Mexico this year. Despite the windfall, lawmakers declined to give needed funds to the agencies responsible for regulating the increased pollution that such booms create. The state’s two primary environmental agencies, the New Mexico Environment Department and the Energy, Minerals and Natural Resources Department, will both receive modest bumps to their budgets from the state’s general fund, but these will still fall about $9 million short of the amounts the agencies and the governor requested in the Executive Budget Recommendation. Both environment agencies are responsible for a growing amount of oversight, from enforcing pollution restrictions and food safety to mitigating wildfires and curbing impacts from climate change. Despite the increasing duties, the proposed spending plan for fiscal year 2023 calls for NMED’s budget to be nearly 5 percent lower when adjusted for inflation than it was in 2008; EMNRD’s budget is almost 13 percent lower.
Hydrogen will be a key energy source in meeting the state’s goals of net zero by 2050 and at least 45 percent reduction from 2005 levels by 2030, according to New Mexico Environment Department Secretary James Kenney. Kenney spoke to NM Political Report after his agency, as well as the Energy Minerals and Natural Resources Department and the Economic Development Department, signed a memorandum of understanding with Los Alamos National Laboratory and Sandia National Laboratories with the stated purpose to “facilitate the development of sound science, advance technologies and inform national/state policies that could enable a path to zero carbon hydrogen.”
The national labs are no strangers to hydrogen. John Sarrao, deputy director for science, technology, and engineering at Los Alamos, said the lab has been working on hydrogen for about 40 years and has developed technology that is currently being deployed in pilot projects. Chris LaFleur, an engineer at Sandia, said the lab’s work looking at hydrogen as a clean energy alternative dates back more than 15 years and one of the areas that the lab has been focusing on is storage materials. She said the lab’s hydrogen expertise is part of its core mission.
LaFleur said, in terms of research into storage, Sandia has been looking at storing hydrogen molecules “within the latticework of other materials.” She called this solid storage, as compared to what is currently more common—storing pressurized hydrogen in a tank. While the MOU addresses storage, LaFleur said the MOU’s focus is primarily on large-scale storage.
Toxic chemicals that do not break down in the environment have been threatening water sources nationwide, witnesses told the Senate Committee on Environment and Public Works during a hearing on Wednesday. Per- and poly-fluoroalkyl substances, better known as PFAS, have received attention in New Mexico and nationwide as they were used in firefighting foam at two air force bases. This contamination has migrated from the military bases and led to water contamination at a dairy farm near Clovis in eastern New Mexico. While these chemicals can lead to cancer as well as other health effects, there are no federal rules regulating them. That needs to change, according to New Mexico Environment Department Secretary James Kenney who told the committee that a federal regulatory framework is needed for PFAS.
The New Mexico Environment Department is investigating the size of the PFAS plumes in eastern New Mexico. PFAS, or per- and poly-fluoroalkyl substances, are chemicals that were used in firefighting foam at two air force bases in the state. The chemicals can impact human health and are known as “forever chemicals” because they do not degrade in the environment. For decades, the U.S. Department of Defense did not properly dispose of the foam at Holloman and Cannon air force bases. This led to groundwater contamination.
Many incarcerated women, often already traumatized from gender violence, potentially face re-traumatization once imprisoned in New Mexico through inhumane conditions and sexual assault, according to attorneys. Lalita Moskowitz, an attorney with the American Civil Liberties Union of New Mexico, said the inhumane conditions run the gamut in New Mexico prisons—from infestations of rodents and freezing conditions at Western New Mexico Correctional Facility outside of Grants to infrastructure that is “completely falling apart” and inadequate reproductive health care at Springer Correctional Center in the small northern town of Springer. She said the two New Mexico women’s correctional facilities are “some of the oldest (correctional) buildings in the state.”
There have also been numerous sexual assault allegations at both facilities, Moskowitz said, and several sexual assault lawsuits. Steve Allen, director of the nonprofit New Mexico Prison and Jail Project, called the sexual abuse at Springer, “systemic.”
Many of the women housed in New Mexico’s correctional facilities are nonviolent offenders. Allen said that many women who are housed in WNMCF, which is a medium-level security facility, are “overclassified,” which means the inmates are put into a higher security prison than they need to be.
Following concerns from members of the environmental community, the New Mexico Environment Department removed the exemptions from the oil and gas sector ozone precursor rule for stripper and marginal wells. The department released the ozone precursor rule Thursday and filed a petition with the Environmental Improvement Board to review it. A public hearing is anticipated this fall. If approved by the seven-member board, the rules would likely go into effect in early 2022. It is intended to work in conjunction with a methane waste rule that the Energy, Minerals and Natural Resources Department already finalized.
Mario Atencio, an activist from the Greater Chaco region of New Mexico, said the methane waste rule adopted by the Oil Conservation Commission on Thursday will set energy production in New Mexico on a path trending toward fairness. Atencio’s community in the Counselor Chapter of Navajo Nation is among the poorest in the state and, he said, it has long borne the impacts of oil and gas emissions. He is hopeful that the methane waste rule will significantly decrease emissions impacting his community. The Oil Conservation Commission, which falls under the state Energy, Minerals and Natural Resources Department, unanimously approved the final language of the new rule for venting and flaring of natural gas during its meeting and the commissioners expressed pride in the final language.
The methane waste rule requires 98 percent of the methane from oil and gas operations to be captured by 2026, although it leaves the companies with the flexibility to use a variety of technology to meet those goals. Work on the methane waste rule began in 2019 following an executive order from Gov. Michelle Lujan Grisham.
New Mexico Environment Secretary James Kenney told state lawmakers his agency needs more staffing to inspect worker safety violations, ensure businesses are preventing the spread of the novel coronavirus and better protect the state’s air and water quality. Kenney implored members of the Senate Finance Committee on Tuesday to approve a $3.7 million increase in the Environment Department’s budget for fiscal year 2022, saying it would beef up understaffed teams that probe workplace safety issues.
The increase would raise the agency’s general fund budget to $16.8 million and be on par with the 28 percent bump the governor has proposed.
“That is, all things considered, a very modest increase,” Kenney said. “That investment in the Environment Department — $3.7 million — will definitely save lives [and] protect public health and the environment.”
In all, the agency’s revenue last year was $90.7 million, counting grants and fees collected.
The Legislative Finance Committee recommended keeping the agency’s general fund allocations the same as last year’s, which Kenney argued was not enough to provide effective oversight.
Kenney said the requested funding increase is the difference between the agency being able to investigate workplace complaints and deaths and leaving those incidents unchecked.
Probing workplace violations through the state office of the Occupational Safety and Health Administration is imperative in New Mexico, where worker deaths are 77 percent higher than the national average, Kenney told the committee.
The agency’s budget was cut by 42 percent in the last three years that former Gov. Susana Martinez was in office, Kenney said. It has regained about 22 percent of its spending but is still operating at a lower funding level than it requires, he said.
The agency has a vacancy rate of 17.7 percent, which adds up to 63 jobs that should be filled, Kenney said.
None of the committee members spoke against the requested increase.
Sen. Jeff Steinborn, D-Las Cruces, expressed strong support, saying the agency’s mission should be a priority in New Mexico.
The committee is considering hefty increases in spending on economic development and tourism, he said.
“And those are great things, but I would hope we’d all agree that environmental protection and protecting public health are at least equally important,” Steinborn said.
Subpar environmental oversight can hurt economic development because companies don’t want to locate in places that are unhealthy and unsafe, he added. The proposed budget includes a $1.7 million for rapid responses to workplaces where one or more employees tested positive for COVID-19.
New Mexico’s environmental and oil and gas regulators are facing budget cuts for the next fiscal year, as nine months of the COVID-19 pandemic and a significant downturn in the oil market has depleted the state’s budget.
The budget reductions come after years of attrition in regulatory budgets under the Susana Martinez administration. The New Mexico Environment Department’s budget was cut by 32 percent between fiscal years (FY) 2012 and 2019, which was the last fiscal year budget passed by the legislature in 2018 before Martinez left office, according to a report released by the New Mexico Wilderness Alliance. The Energy, Minerals and Natural Resources Department (EMNRD) saw its budget drop roughly 24 percent under the Martinez administration between fiscal years 2012 and 2019.
In Gov. Michelle Lujan Grisham’s first budget proposal for FY2020, NMED’s general fund increased 6 percent compared to FY2019, while EMNRD saw a 9 percent increase in fiscal year 2020 over 2019. The departments saw similar increases in the FY2021 budget. But some of that progress will be reversed as the state grapples with the fiscal ramifications of a nearly year-long public health emergency and an oil boom bust.
NMED to cut back on some services
NMED submitted a $89.2 million budget request for fiscal year 2022.
New Mexico Environment Department Secretary James Kenney said his department is working through hundreds of comments related to a proposed rule for regulating air pollution associated with oil and gas development.
“We received over 400 comments on our rule,” Kenney told state legislators during a recent committee meeting.
Last year, NMED and the state Energy, Minerals and Natural Resources Department (EMNRD) were tasked with developing new rules targeting methane emissions in the state resulting from oil and gas activity. While EMNRD’s rule addresses methane emissions directly, NMED’s draft rule instead targets volatile organic compounds (VOC) and nitrous oxide (NOx) emissions from oil and gas wells.
Both NMED and EMNRD released draft proposals for their respective rules in July for public comment, after a year of work by the state’s Methane Advisory Panel, which was composed of oil and gas representatives, environmental groups and other stakeholders. EMNRD released a finalized version of its rule in mid-October. On Nov. 4, the Oil Conservation Commission agreed to set a hearing for the finalized rule in January.
But NMED still has some work to do before it releases a finalized version of its rule, Kenney said.