Last Thursday a pair of bills related to the oil and gas industry made highly consequential appearances in the New Mexico House — one on its way out and the other on its way in. The bigger of the two, the General Appropriation Act of 2023, is as big as a bill gets in New Mexico, as it is the first step in funding everything the state does in the coming year. On Thursday, the House gave its 252 pages a three-hour hearing before passing it and sending it to the Senate for further discussion and debate.
The Appropriations Act, as it currently stands, is a mixed bag for the two agencies that monitor the state’s oil and gas industry. The bill increases funds for the Oil Conservation Division over what was in the Legislature’s original budget proposal. “Those additions largely closed the gap,” says Dylan Fuge, acting director of OCD. The news was less positive for the New Mexico Environment Department. Matthew Maez, spokesperson at NMED, says that the House bill bundled budget requests for a new climate office and current oilfield ozone pollution enforcement but undershot the $6.1 million combined request by more than 40%, which he says, “directly undermines our mission.
“Further,” Maez goes on to say, “there are numerous unfunded legislative proposals working their way through the House and Senate chambers which, if passed and signed into law, will add $7.3 million in unfunded mandates to our already overworked and struggling staff.”
Maddy Hayden, director of communications for Gov. Michelle Lujan Grisham, is upbeat about funding for OCD, but says that NMED’s budget in the General Appropriation Act has “insufficient legislative appropriations to support oil and gas permitting, compliance and enforcement activities.”
Maez noted two consequences for oil and gas enforcement in New Mexico if the funding isn’t ultimately increased either in the Senate or in the final reconciliation between House and Senate versions. One: The Environmental Protection Agency is expected to designate the Permian Basin an ozone nonattainment zone later this year, and “NMED will not be ready” to enforce the federal standards. And two: Underfunding both programs puts federal matching funds for hydrogen energy development in New Mexico in jeopardy.
“The governor remains clear that hydrogen is a critical component for reducing greenhouse gas emissions in New Mexico and around the world.”~ Maddy Hayden, director of communications for Gov. Michelle Lujan Grisham
That last part may eventually affect last week’s other big bill, HB12, the Advanced Energy Technology Act, which is sort of what it sounds like and sort of not. While it doesn’t specify all of the advanced energy technologies it hopes to promote with $50 million in public-private partnerships that give state money to private companies, it clearly echoes last year’s quartet of failed hydrogen bills that promoted public-private partnerships that give state money to private companies. And while it doesn’t explicitly say “hydrogen,” the bill’s talk of low carbon and net zero energy sources certainly covers fossil fuel- based hydrogen.
Plus, Hayden says, “The governor remains clear that hydrogen is a critical component for reducing greenhouse gas emissions in New Mexico and around the world.”
The bill also opens the door for nuclear energy projects, despite New Mexico’s House and Senate having already passed legislation this session, supported by Gov. Lujan Grisham, that dramatically raises the regulatory bar for future nuclear waste disposal projects in the state.
Hydrogen and nuclear plans ring a warning bell for Julia Bernal, executive director at Pueblo Action Alliance, a cultural and environmental protection group for Native American Pueblo communities. She attended COP27, the U.N.’s annual climate conference, last year in Sharm el-Sheikh, Egypt (as did Gov. Lujan Grisham). The conference was widely criticized for the number of fossil fuel lobbyists attending, and Bernal says, “There wasn’t a lot of the private sector promoting solar and wind. It was mainly nuclear and hydrogen.”
Bernal says, “When you endorse net zero [hydrogen], you’re allowing for carbon trading and offsetting schemes to essentially allow [the oil and gas] industry to continue polluting at the source but offsetting it somewhere else.” She’s baffled that a state with abundant — and cheaper — solar and wind possibilities would offer money for much more controversial energy sources.
To complicate matters for environmentalists, after HB12 was initially proposed, legislators added provisions from another bill, HB188, which would create an economic transition department to help businesses and oil and gas field workers out of that industry and into new, safer, less economically volatile jobs.
Bernal called the combined bill “insidious, because it’s sort of using that really good piece of legislation [HB188] to roll out hydrogen.”
“As long as climate policy … is organized around increasing profit, it will inevitably exacerbate class exploitation.”~ Zephyr Jaramillo, campaign organizer, Youth United for Climate Crisis Action
“We’re really very much trying to get our heads around what’s going on with this bill,” Camilla Feibelman, director of the Sierra Club’s Rio Grande chapter, says of HB12. “We’re energetically in support of the part of it that deals with economic transition,” she says. “The other stuff in the bill, to our mind, is not part of that.”
“It’s a really, really, really weird spot for the [HB188] advocates,” she says.
Asked if she thought the two bills were combined to get environmental campaigners to accept a hydrogen bill, Feibelman said, “You can sugar it up as much as you want. But you know, if it’s sugar and tar, we have to say what’s sugar and what’s tar.”
“It’s pretty shitty,” says Zephyr Jaramillo, campaign organizer with YUCCA (Youth United for Climate Crisis Action) and Earth Care. “It contains all of these things that … frontline indigenous communities have already said, ‘This is not OK.’”
“Climate policy cannot be designed at the expense of low income, poor and working class people, at the expense of indigenous communities and communities of color,” she says. “As long as climate policy … is organized around increasing profit, it will inevitably exacerbate class exploitation.”
Last year’s hydrogen bills focused on creating a hydrogen hub in the northwest corner of the state, an economically depressed region that’s also home to a large portion of the Navajo Nation. The area is part of the San Juan Basin, a major natural gas producing region straddling New Mexico and Colorado — a resource that would be further tapped to make hydrogen.
Hayden says, “Transportation remains one of the largest sources of greenhouse gas emissions in our state and a key application area for clean hydrogen.” While hydrogen is an exceptionally clean fuel by itself, in total it is only as clean as its production method. And in New Mexico, the majority of greenhouse gas emissions come from oil and gas production operations. Making hydrogen from natural gas increases hydrogen’s total carbon footprint from leaks in the natural gas production stream that OCD and NMED have historically been unable to thoroughly police. Furthermore, the production process leaves behind vast amounts of carbon that would need to be captured and sequestered underground, an expensive process that, historically, hasn’t met project goals.
After last year’s bills failed in the Legislature, Gov. Lujan Grisham resurrected the idea in partnership with Utah, Colorado and Wyoming, bypassing, at least temporarily, public comment and approval. “The Western Interstate Hydrogen Hub has a unique opportunity to address this through the development of a low carbon hydrogen economy,” Hayden says.
Bernal says, “That completely undermines our democratic process and undermines what the people want. … And it’s because it’s going to help ensure the hydrogen economy happens in New Mexico.” She says the governor didn’t support HB188 in the beginning, but is supporting HB12 now, which she says is “kind of icky.” (The Governor’s office says it has not yet taken a position on HB12.)
Jaramillo says, “We just learned about donors to [Gov. Lujan Grisham’s] inauguration. And you know, lo and behold, $89,000 in contributions from extractive industry groups and oil companies, including Chevron, ExxonMobil, ConocoPhillips.”
“It’s really disgusting,” she says. “Our decision makers are making decisions that are going to affect my generation for much longer. … It’s our futures on the line, and we absolutely deserve a livable future.”
HB12 is scheduled for its first committee hearing this Saturday.
