Gas & Oil Lobbyists Trading Profit for their Grandchildren’s Future + News on Special SB 489 Radio Show

“The sky is falling,” is NM Oil & Gas Association’s persistent claim any time the legislature tries to address climate change. This post exposes the moral bankruptcy of an industry that is fine with trading 2019 profits for the future of children born in 2019. It also calls upon Democratic leadership to fund a study for making a swift, just transition to a sustainable future.

Breaking News: SB 492 the “clean” securitization bill will be heard on Saturday as the lone bill on the agenda, in Senate Conservation. This is the bill that serves as an alternative (and in our minds, preferable) bill to SB 489 as it is based on best practices nationally and very clearly protects the PRC authority. Tomorrow, I will present a side-by-side analysis of SB 489 and SB 492 to help you sort out what is best for NM.   It appears that at the same time, SB 489 will be heard in Senate Corporations Committee. I must say it feels odd that the two bills covering the same securitization issue is scheduled at the same day and time. I suspect the same people interested in SB 492 will be interested in SB 489 and by scheduling dueling hearings, that will be impossible or at least very difficult. We will update you on times and hearing rooms.

Retake Our Democracy on KSFR, Saturday, 8:30 a.m. with Camilla Feibelmann, Sierra Club, and Noah Long, National Resources Defense Council speaking in support of SB 489 and Mariel Nanasi, New Energy Economy and regulatory attorney Bruce Throne advocating for amendments to SB 489. It is a special one-hour show with the first 30 minutes broadcast on KSFR on Saturday morning and the remaining 30+ minutes being available by podcast the same day.  Almost no time will be spent discussing generalities. Rather, we will examine the 6 goals of SB 489 briefly and then look at the precise bill language that either supports or undermines those goals. The choice between SB 489 and SB 492 is the single most important energy decision in this legislative session. Many bills are very clear: raise the minimum wage to $10, then $11, then $12. I get it quickly. But this bill is very complicated and the devil is in the details, so this show will focus on those details.  I’ve received tons of emails asking for this kind of discussion of SB 489.  Listen in.  The podcast for the full show will be available Saturday afternoon.

If a Budget is a Moral Document As Long As NM’s Budget Relies On Gas & Oil Revenues, that Budget Is Immoral

I’ve sat through many, many hearings where NM Oil & Gas Association lobbyists show up in force and tell us how dependent NM is upon gas and oil revenues. And at least for now, they are correct. But I’ve also heard them tell us that if New Mexico passes any bill to regulate, tax or penalize gas and oil, they will abandon their wells and move operations to Texas, abandoning the leases that make them rich. I actually have comments on both these assertions.

At a Senate Judiciary Hearing on Tuesday, I heard Senator Shendo describe how indigenous people are not really able to calculate dollars and cents when the cost is desecration of their cultural values and their sacred connection to the land, the water and the air. He spoke haltingly, clearly trying to manage his emotions, especially when he introduced his grandchildren who were present in the hearing room.

After Sen. Shendo concluded, the Committee Chair indicated that the hearing had to end at 11 and so he would only be able to allow five minutes of comment. I had been so moved by Sen. Shendo’s comments, that when it was my turn to offer public comment, I threw out my notes.and offered a far shorter version of what I had intended to say. I began with:  “The gas and oil industry will tell you that any effort to regulate their industry, no matter how modest and the sky will fall, but I’d like to correct this claim. Science tells us that if we continue to be held hostage to the gas & oil lobbyists and kill bills that could mitigate climate change, the sky will indeed fall, but it will fall on all of us.” At this point the crowd erupted in cheers, something no committee chair allows. Senator Cervantes, cut discussion as at that point as we were out of time for the hearing with Senators needing to head to the Senate floor. If I had been afforded time to complete my comment, I would have added the following.

I’ve heard these same lobbyists tell us that if we pass a bill to raise royalties for the first time in 40 years so they match royalties charged in Texas, oil rig operators will pack up, abandon their leases and head to Texas where they will pay the same level of royalties proposed here in NM.

I’ve also heard these same gas and oil lobbyists tell us that any bill that tries to increase penalties for leaks and other violations of oil regulation, they will flee to Texas. This despite the fact that over the past 8 years, the total amount of penalties collected six of the last nine years has been zero and the total of the other three years was $65,000.

Over and over again, in countless hearings, the gas and oil lobbyists have resisted any form of regulation, essentially claiming that the sky would fall if New Mexico attempts to implement any strategy to address climate change.

At some point, the adults in this room need to stand together and act as if climate change is a crisis. We need to behave as if we care that our lack of action is sentencing future generations to a certain dystopian future. So when you vote today, I want you not just to consider the futures of Senator Shendo’s grandchildren and look them in the eye, as it is those children and their children who will pay the toll for your vote.

I don’t know if any of you have seen the speech made by Greta, the 15-year old Swedish girl who spoke at the International Climate Change Panel in Poland.  I will send you a link.  It is only four minutes but she is speaking truth to power. She is telling the adults in the room to behave as if this is a crisis or she and her generation will shove you aside. We can’t wait any longer. Today, Greta’s generation has the moral high ground. They are the ones who will suffer from your decisions. But until that generation is able to wrest decision making from our generation, they are looking to you to behave responsibly, to think deeply about the future of our children and their children and reject the empty threats of the gas and oil lobby. They are not going to abandon their highly profitable leases, if they are forced to pay penalties when there are leaks, or if they have to increase their royalty payments.

After the hearing, I asked several people if there was any bill being considered in either the House or the Senate that proposes funding to study how New Mexico can free itself from its dependence on gas and oil revenue. As long as 20% of our entire revenue base is generated from gas and oil, then our decision-making is going to be clouded by fiscal realities. In the absence of a plan, we will continue to blunder from year to year hamstrung by those fiscal exigencies.It is simply morally irresponsible to not even begin serious research and planning to effect a just transition to a sustainable economy and a sustainable green energy future.

To amplify on my comments related to the State’s inability to fairly penalize the ‘bad guys’ who disregard and/or consistently violate state regulations related to fossil fuel extraction I provide an excerpt from the Albuquerque Journal.

“The state Supreme Court ruled in 2009 that the OCD does not have that statutory authority under the state Oil and Gas Act, forcing it to file suit against violators through the Attorney General’s Office.  Before that ruling, the division collected, on average, more than $500,000 a year through fines on violators. The amount in 2009 was $727,000. But since then, it has collected a total of $64,500 in fines, with zero penalties imposed in six of the past nine years, including 2018, according to OCD statistics compiled in a new report by Earthworks Oil and Gas Accountability Project.

Violations, meanwhile, have grown significantly during the boom in the Permian Basin in West Texas and southeastern New Mexico. OCD statistics show nearly 1,900 violations in 2017 and more than 1,700 in 2018, up from 856 in 2009.

“We’ve seen a pretty alarming trend in the growing number of violations and zero penalties,” said Earthworks field advocate Nathalie Eddy. “Penalties just fell off the cliff after 2009. It’s a real red flag that the OCD isn’t able to do its job.”

Martinez told committee members the bill would ensure that the state has the tools it needs to protect the environment and public safety. “It gives the OCD authority to penalize bad actors,” he said.

And this the New Mexico Oil & Gas Association cried foul, the burden would be too great upon operators and they would be forced to shut down operations. The sky would fall.

As long as we are so beholden to gas and oil industries our state will remain choked by methane and will continue to be a national leader in accelerating our race to a horrific future for our grandchildren. And that is immoral.

In solidarity,

Paul & Roxanne

5 thoughts on “Gas & Oil Lobbyists Trading Profit for their Grandchildren’s Future + News on Special SB 489 Radio Show

  1. A 20-day cessation of operations by a producer on a lease is considered abandonment and the lease terminates. So producers are certainly free to abandon their very lucrative New Mexico leases and move to Texas, or Wyoming, or Oklahoma. But they should (and do) know that within 20 days of abandonment those leases can be considered *terminated* by the lessor (New Mexico Commissioner of Public Lands) and will simply be sold to someone else.

    “15. Should production of oil and gas or either of them in paying quantities be obtained while this lease is in force and effect and should thereafter cease from any cause after the expiration of five years from the date hereof this lease shall not terminate if lessee commences additional drilling or reworking operations within sixty days after the cessation of such production and shall remain in full force and effect so long as such operations are prosecuted in good faith with no cessation of more than twenty consecutive days, and if such operations result in the production of oil or gas in paying quantities, so long thereafter as oil or gas in paying quantities is produced from said land; provided, however, written notice of intention to commence such operations shall be filed with the lessor within thirty days after the cessation of such production, and a report of the status of such operations shall be made by the lessee to the lessor every thirty days, and the cessation of such operations for more than twenty consecutive days shall be considered as an abandonment of such operations and this lease shall thereupon terminate.”

    (http://www.nmstatelands.org/uploads/FileLinks/7efe8a18b8c84db3bb04581b2b8d7e5e/Oil___Gas_Manual_MASTER_WORD_version_May_2016.doc.pdf)

  2. “After the hearing, I asked several people if there was any bill being considered in either the House or the Senate that proposes funding to study how New Mexico can free itself from its dependence on gas and oil revenue. As long as 20% of our entire revenue base is generated from gas and oil, then our decision-making is going to be clouded by fiscal realities. In the absence of a plan, we will continue to blunder from year to year hamstrung by those fiscal exigencies.It is simply morally irresponsible to not even begin serious research and planning to effect a just transition to a sustainable economy and a sustainable green energy future.”

    I agree. We have a incredibly complex system of electric generation, electric storage, and transmission and distribution lines. We cannot rely a bunch of uncoordinated laws that encourage the uncoordinated construction of various elements to produce a system that is effective and efficient.

    Ideally, the study would examine lessons of the California firee and attempt to reduce our dependence upon transmission lines. They study would examine to what extent, the development of distributed energy resources might be feasible, efficient and could reduce our dependence on transmission lines.

  3. Pingback: A Look Back at a Roundhouse-Dominated Week With the Focus on Gas & Oil | Retake Our Democracy

  4. I hope the new PRC appointees will consider it empowered to tackle these issues in focussed, systematic ways. The crudists” are playing us for suckers.

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