Oil and gas, environmentalists in rare agreement over State Land Office’s emergency rule on shut down wells
Representatives from both oil and gas producers and environmental groups found themselves agreeing on the State Land Commissioner Stephanie Garcia Richard’s emergency rulemaking for oil and gas production on state land during an online tele-hearing.
The State Land Office announced earlier in April that it would begin an emergency rulemaking process to allow oil lessees to temporarily stop oil production without penalty for at least thirty days, in hopes of restarting production when the price of oil has recovered some. During the online tele-hearing, oil and gas representatives praised Garcia Richard and the State Land Office for its decision.
John Smitherman, senior regulatory advisor at the New Mexico Oil and Gas Association (NMOGA), described the rule as “valuable and practical relief.” Smitherman said the current oil price crisis, spurred by a price war between Russia and Saudi Arabia, and exacerbated by a steep drop in demand for oil and gas products amid the COVID-19 pandemic, has led to the “worst business environment” he’s ever seen.
“I’ve personally been in this business for over forty years, and have never seen the challenges we face today. This industry, just like many others, is making sacrifices right now for the good of the community, while incurring significant financial losses as a result of unprecedented reductions in demand for our products,” Smitherman said. “The interests of the oil and gas industry and the State Land Office are aligned when it comes to this.”
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Environmental group representatives agreed that the emergency rule was a good idea.
“It’s not often that environmental groups get to say that we agree with industry in commending the Land Commissioner in moving forward with this rule,” said Rebecca Sobel, senior climate and energy campaigner at WildEarth Guardians.
But that’s where consensus between the two groups stopped.
Smitherman, who said NMOGA’s members operate approximately 95 percent of oil and gas production in the state, and account for greater than 90 percent of all state land office revenue, said he anticipates the situation “will right itself” and “business will return to normal,” though the recovery could be slow.
Sobel disagreed in her comments.
“It’s shameful that industry officials are here advocating for yet another bailout to frack forever, in the midst of a public health crisis. We know the oil and gas industry is collapsing as we speak.