Home New mexico tax Oil boom fuels NM budget, but environmental agencies leave something to be desired

Oil boom fuels NM budget, but environmental agencies leave something to be desired


A boom in the oil and gas industry helped deliver a record $8.5 billion to New Mexico this year. Despite the windfall, lawmakers have refused to give needed funds to agencies responsible for regulating the increase in pollution created by these booms.

The state’s two main environmental agencies, the New Mexico Department of the Environment and the Department of Energy, Minerals and Natural Resources, will both receive modest increases to their budgets from the general fund of the State. state, but these will still be about $9 million less than the amounts the agencies and the governor requested in the executive’s budget recommendation.

The two environmental agencies are responsible for an increasing amount of oversight, from enforcing pollution restrictions and food safety to mitigating wildfires and reducing the impacts of climate change. Despite the increased fees, the proposed spending plan for FY 2023 calls for NMED’s budget to be nearly 5% lower when adjusted for inflation compared to 2008; The REMDR’s budget is almost 13 percent lower.

“New Mexicans won’t see us making as much progress on climate as we’d hoped,” NMED Secretary James Kenney said. “I am extremely tired and frustrated after the session.”

In recent years, legislators have consistently refused to use excess cash brought in during oil booms to enforce environmental regulations and mitigate the environmental impacts of industry. Even as the second-largest oil-producing state, New Mexico has far fewer inspectors on the ground than other extractive states.

The new budget does little to address this disparity. The Petroleum Conservation Division, an office within the REMDR that monitors oil and gas activity, will only be able to hire five new staff. It had requested funding for 25 people, primarily for compliance and remediation.

Profit and pollution

While oil and gas revenues can bring windfall benefits to New Mexico’s budget, production increases come with a number of costs. Industry is the biggest source of greenhouse gases in the state, and industry leaders regularly lobby against regulations and pollution controls. A lobbyist for the New Mexico Oil and Gas Association, for example, spent $256,500 on ads during the 2022 legislative session to help defeat the Clean Future Act, a bill that would have imposed statutory limits on carbon emissions. greenhouse gases, forcing industries to reduce their emissions. 50% of 2005 levels by 2030 and achieve net zero emissions by 2050.

“They contribute to the economy, but they also benefit from public goods, while externalizing their harm to all of us,” said Camilla Fiebelman, manager of the Sierra Club’s Rio Grande chapter, of oil and gas. producers.

Budget shortfalls could also threaten work within NMED and the Petroleum Conservation Division to introduce regulations. Even as the number of wells to monitor increases, agencies are rolling out new rules that will increase the amount of data to monitor and eventually force oil and gas operations to reduce emissions. Data will be self-reported by industry. Although the data needs to be verifiable, it is unclear to what extent these rules can be enforced without regular inspections.

A story of lack

State environment departments in particular hoped to see increased funding for the coming fiscal year, after suffering severe budget shortfalls for more than a decade. The first modest cuts came in 2009 during the recession, then deepened under Governor Susana Martinez, who slashed environmental budgets by 20-30%. Governor Michelle Lujan Grisham tried to restore funding to departments, but her budget recommendations were repeatedly reduced by the legislature.

The latest budget shortfall comes as the state government grapples with its strong associations with the oil and gas industry while trying to tackle climate change. According to an analysis by the New Mexico Tax Research Institute, tax revenue from the oil and gas industry accounted for 33% of state revenue in the last fiscal year. The group’s reports reveal a growing reliance on oil and gas funds in recent years, a trend that began more than a decade ago after changes to the tax structure.

Adrienne Sandoval, director of the Petroleum Conservation Division, said the office will do its best to handle the increased workload, despite having 20 fewer staff than requested. “We’ve reorganized the division to help us make the most of the staff we have,” she said.

Both Sandoval and Kenney said they hope to use new technologies to make up for staffing shortages. Things like remote monitoring and online reporting can allow agencies to do more with less. But technology can’t solve everything.

Kenney said his agency sometimes struggles to equip staff with computers. In recent years, his agency has closed field offices after being unable to staff them and canceled fieldwork in remote parts of the state due to an inability to pay for a stay in the state. ‘hotel.

“It has a chronic impact on our ability to hold polluters accountable,” Kenney said of the budget. “We can’t protect every community in New Mexico with our budget, so there’s an inequity built into that.”

Searchlight New Mexico is a nonpartisan, nonprofit news organization dedicated to investigative journalism in New Mexico.