When energy corporations produce oil, gas or coal on public lands, they make royalty payments to the federal government and the states where production takes place. In 2016, the Obama administration closed a loophole that allowed companies to dodge those fees. The valuation rule was set to provide tens of millions of dollars to taxpayers, until then-Interior Secretary Ryan Zinke repealed it shortly into his tenure in 2017. This story originally appeared at High Country News. Now, a federal judge has deemed that move illegal, putting the valuation rule into effect immediately.
Stepping to the microphone at a press conference wrapping up this year’s legislative session, House Speaker Brian Egolf, D-Santa Fe, hammered the podium to the drum beat for Queen’s “We Will Rock You” before declaring it the “best, most productive” legislative session in state history. He proclaimed major achievements in education funding, criminal justice reform, a path for carbon-free electricity — and a bill that would save 100,000 acre feet of water each year from use in oil fields. “The produced water bill, I think, is going to go down as one of the greatest environmental accomplishments to come out of the state legislature of New Mexico,” Egolf said. “Just the quantity of fresh, potable water that’s going to be saved for agricultural and municipal use is breathtaking.”
The bill Egolf held up in victory paves the way for recycling wastewater from oil and gas production for reuse by the industry, reducing the need for freshwater in the production process.
It had the support of the New Mexico Oil and Gas Association but was controversial among environmental groups because it sets the stage for such water to see other, non-industrial uses in the future. In the final days of the session it was amended to allow the Oil Conservation Division to issue fines and penalties for permit violations, a measure championed by environmentalists.
Last week, Gov.-elect Michelle Lujan Grisham started announcing appointments to top spots in state government. Among the positions she announced was her choice for secretary of the Energy, Minerals and Natural Resources Department (EMNRD), Sarah Cottrell Propst. Most recently, Propst worked as executive director of Interwest Energy Alliance, a nonprofit trade association of renewable energy companies in six western states, including New Mexico. During the administration of Gov. Bill Richardson, Propst served as his energy and environment advisor, and then as deputy secretary of the New Mexico Environment Department (NMED). She came to New Mexico after earning a master’s degree from Princeton University’s Woodrow Wilson School of Public and International Affairs.
LOVINGTON—The 61-mile drive on US 82 from Artesia to this southeast New Mexico town crosses the heart of the Permian Basin oil field’s extension into the state. Pump rigs bob like great iron dinosaurs come to life, and the smell of petroleum fills the air. Flare pipes burn off natural gas and methane like fire-breathing dragons. It’s the scent of economic opportunity for some, the stench of impending danger to others. Industry experts and environmentalists agree on one thing: the September 2018 sale of nearly $1 billion in federal leases has set off one of the greatest oil booms in American history and has overwhelmed everything from the region’s highway to its housing supply.
An oil and gas bonanza in Southwestern states may be helping to drive the continuing national economic boom. The nation’s 4.2 percent growth in GDP, estimated last month by the Bureau of Economic Analysis, is the highest quarterly growth since 2014. State estimates aren’t due until mid-November, but many experts see oil and natural gas drilling, driven by higher prices, as a leading reason. “The states that contribute most might be the ones with strong increases in energy production,” including Texas, New Mexico and Colorado, said Mark Perry, an economist at the University of Michigan and an economic analyst for the conservative-leaning American Enterprise Institute. GDP measures gross domestic product, or the value of all goods and services produced in a given period of time.
In September, the U.S. Bureau of Land Management will hold a sale on almost 200 drilling leases for 89,000 acres in Chaves, Eddy and Lea counties. About a dozen of those leases are within a mile of the boundary of Carlsbad Caverns National Park. The National Parks Conservation Association hopes the BLM will defer the parcels nearest to the park, in critical cave and karst areas and in other places with environmental concerns or wilderness characteristics, said Ernie Atencio, the nonprofit’s New Mexico Program Manager. “They heard our request to that effect, and they might even agree and prepare the paperwork for it, but that’s another decision that has to come down from D.C. and no longer in the hands of local managers,” he said. Since 1923, when President Calvin Coolidge signed the executive order creating what was then called Carlsbad Cave National Monument, the region has been transformed, largely due to oil drilling in the Permian Basin.
One of the biggest environment stories this week is the release of an updated New Mexico State Water Plan. Susan Montoya Bryan covered that for the Associated Press, noting a few of the plan’s recommendations, including:
New Mexico’s supply of groundwater should be reserved for periods of drought, communities should have sharing agreements in place when supplies are short and alternatives such as desalination should be explored regardless of the cost. She interviewed Senate Majority Leader Peter Wirth, a Santa Fe Democrat who has worked on water issues for years. Wirth noted that the state hasn’t spent enough money on water planning in recent years and that “the plan has become more a reaction to the evolving conditions.”
NM Political Report reached out to the public information officer for the state’s two water agencies, the New Mexico Office of the State Engineer and the Interstate Stream Commission to interview State Engineer Tom Blaine or other state officials about the plan and its implementation. We received no response.
In an exclusive story published Thursday evening, Michael Coleman reported that U.S. Department of the Interior Secretary Ryan Zinke postponed an oil and gas lease sale in northwestern New Mexico. According to the story:
Zinke told the Journal in an exclusive interview Thursday afternoon that “there have been some questions raised” so the Bureau of Land Management will hold off on the sale of about 25 parcels on 4,434 acres within Rio Arriba, Sandoval, and San Juan Counties in northwestern New Mexico. Mark Oswald reported in the Albuquerque Journal on Tuesday that more than 20 acequia and community ditch groups want to overturn a 2013 court decision that approved an agreement between the Navajo Nation and the state of New Mexico settled a decades-old water rights claim on the San Juan River, a tributary of the Colorado River that flows through northwestern New Mexico. Their filing, by Albuquerque attorney Victor Marshall, seeks to toss out the judge’s ruling because he lived and worked on the Navajo Nation in the 1970s. It’s a shocking enough motion that former newspaperman, and current UNM Water Resources Department Director, John Fleck weighed in the issue on his blog this week.
New Mexico’s commissioner of public lands announced he’s giving Houston-based oil and gas companies a break as the city struggles with the impacts of Hurricane Harvey. Aubrey Dunn said his office is offering a grace period to the 25 Houston companies and subsidiaries with state leases. The extension moves the Sept. 25 due date for royalties and interest on oil, gas and carbon dioxide extracted from leases on state trust lands to Oct. 25.
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.