Speaking at an oil and gas conference in Santa Fe last week, a panel of state lawmakers expressed sympathy and appreciation for fossil fuel producers, but they also conveyed New Mexico’s political landscape was changing and the industry must adapt.

A clear signal of that change was when state Reps. Patty Lundstrom, D-Gallup, and Kelly Fajardo, R-Los Lunas, offered lobbying advice.

Both women emphasized the importance of bringing a concise and coherent request to lawmakers and their staffers, who all are unpaid and have limited time to respond to a hodgepodge of questions and concerns.

The state has a long history of not paying its legislators who, in turn, often are understaffed. What’s different is an industry that has been so highly esteemed because of the massive revenue it provides the state now having to improve its lobbying efforts.

“Absolutely. I would say so, yes,” Lundstrom said of the trend during a phone interview.

Many newer lawmakers are younger, care more about climate change and are better informed about it, which means they’ll ask tougher questions, Lundstrom said. “They’re not willing to say, ‘Give ’em a pass.’ ”

This reflects the unfamiliar territory the industry finds itself in as the changing climate causes an extended drought, lower river flows and shortened growing seasons, prompting environmentalists to push for reduced greenhouse gas emissions and voters to make climate a higher priority when electing political leaders.

Industry officials acknowledge a need to curb the release of methane — a potent greenhouse gas — and other toxic chemicals. They also agree a transition from fossil fuels to renewable energy is inevitable, but they believe the change should be gradual and take many years, even decades.

In the foreseeable future, oil and gas will remain in high demand and continue to be an important part of New Mexico’s economy while the industry works to become cleaner to counter climate change, said Leland Gould, interim executive director of the New Mexico Oil and Gas Association.

“There’s no doubt that the future of our industry is lower carbon and lower emissions,” Gould said. “But I know our members in New Mexico can play a big role in meeting the growing demands all over the world and continue to lower emissions.”

One environmental advocate said conservationists are taking advantage of the current political climate to push harder for stronger protections for the climate and public health.

“I think there is a moment right now where these climate and clean air issues are coming to the fore,” said Jon Goldstein, state policy director for the Environmental Defense Fund. “It has a lot to do with the public at large’s understanding of just how serious these problems are becoming.”

Increased regulation and production

State, federal and international reports forecasting the impacts of climate change are alarming. The consensus among climate scientists is that greenhouse gases, which trap heat in the atmosphere, must be slashed to head off the most disastrous effects.

The dire predictions have led to environmental advocates pressing for swifter measures such as government funding for renewable energy systems, incentives for switching to electric vehicles and more stringent rules on oil and gas operations.

A new generation of lawmakers at both the state and federal levels espouse everything from the Green New Deal to anti-fracking bills to carbon-cutting goals.

Gov. Michelle Lujan Grisham, a Democrat, issued an executive order in 2019 calling for the state to cut greenhouse gases by 45 percent by 2030.

In March, the state adopted methane regulations that restrict venting and flaring of natural gas to emergencies. Operators also are required to capture 98 percent of their methane by the end of 2026.

Meanwhile, the state Environment Department is proposing new rules for the fossil fuel industry to curtail ground-level ozone, a toxic gas that can cause respiratory problems. And the U.S. Environmental Protection Agency is expected to announce tougher methane rules in the coming weeks.

Gould said in the past two decades the industry has constantly faced new regulations, and this is just the latest.

His association has worked with state regulators on rules that reduce methane and ozone emissions but aren’t too cumbersome, he said. At the same time, the group works to shore up the industry, which puts about $2.8 billion a year into the state’s budget.

“I believe New Mexico is capable of doing both,” Gould said. “It is not an either-or.”

Many of the association’s oil and gas producers have outlined plans to decrease carbon emissions and develop new technologies that are more efficient and less polluting, he said.

The public should know petroleum production is cleaner and more environmentally sound than it has ever been, he said. “And progress continues on that every day.”

Five years ago, during a market slump, New Mexico’s oil production fell to 150 million barrels a year and has since rebounded to more than 370 million — a record output that puts the state second only to Texas, according to U.S. Energy Information Administration data.

“The remarkable growth we have seen in that time has enabled an unprecedented economic expansion for the state,” New Mexico Oil and Gas Association spokesman Robert McEntyre said. “We think that’s something we should take advantage of as we move into the low carbon future.”

The industry enjoyed more relaxed oversight under Republican Gov. Susana Martinez, who cut regulatory agencies’ budgets and staffing.

Is the industry waiting for the next Republican governor to roll back Lujan Grisham’s more stringent regulations?

McEntyre said that’s not the plan.

The group has worked with both political parties throughout its history with the aim of establishing reasonable, flexible regulations, he said.

“However, we fundamentally disagree with extreme approaches and rhetoric some groups employ to influence policy,” McEntyre said. “It has been difficult to find common ground with those who oppose our existence altogether or advocate for policies that would effectively dismantle oil and natural gas in New Mexico.”

Goldstein said it’s simplistic to cast activists as extremists for seeking more stringent regulations and a swifter transition to greener energy than the industry desires.

“Whenever you paint with as broad a brush as that, you’re going to gloss over a lot of differences of opinion,” Goldstein said.

Long, slow transition

During last week’s conference, a panel member, Republican state Sen. Steven Neville of Aztec, noted the U.S. has more than 270 million vehicles, and almost all of them use traditional fuels.

“I don’t see the oil and gas industry going away in the next 10 years,” Neville said. “That’s what some of our environmental friends in the Legislature are trying to propose. That’s not going to happen. Those cars and trucks and so forth are going to last a lot longer than 10 years.”

A Saudi Arabian study projects an increase in oil demand in the next 15 years, he said.

An economist said the sheer number of gas-powered vehicles combined with the state’s record-level production and rising oil prices are creating a healthy short-term outlook.

“In the short run, things look pretty good for the industry,” said Jim Peach, a New Mexico State University economics professor emeritus.

But major manufacturers such as GM, Ford, Volkswagen and Toyota are ramping up production of electric cars, Peach said. “In a few years, that’s going to affect demand.”

Peach said he’s not surprised some industry leaders are grumbling about tougher regulations and feeling under attack.

They felt under siege 20 years ago when the state began requiring operators to line the pits that hold contaminated wastewater to keep them from leaking into the ground, he said. Some operators threatened to move to Texas, but they didn’t, he added.

State Sen. George Muñoz, D-Gallup, said more liberal, forward-thinking Democrats have unseated some of the entrenched old guard. These younger progressives are stauncher about environmental oversight, which is good until they overlook the costs, he said.

“I think it’s changed for the better,” said Muñoz, who also sat on the conference panel. “I’m all for leaving the world a better place. While I agree with a lot of their stuff, when you struggle to fund stuff, it becomes an issue.”

These lawmakers need to be practical and consider how much New Mexico still depends on oil and gas revenues and federal funding, Muñoz said. He noted long-term planning is required to even partially phase out such an embedded industry.

Lundstrom said too much focus is put on oil and gas when discussing energy transition, but entire supply chains will have to change if the state shifts to a different energy source.

For instance, hydrogen-powered cars will need completely different engines and infrastructure, and workers will need new skill sets to repair them.

Lujan Grisham discussed a plan at the oil and gas conference to jump-start production of hydrogen fuel, which emits less carbon dioxide than fossil fuels. The selling point to executives was that natural gas — which they could supply — would be used to separate the hydrogen from water.

Gould said in the interview he needs to know more about the specifics of the plan, but he thinks natural gas is the most efficient way to produce hydrogen.

Environmentalists oppose this method because it emits more methane than burning natural gas for heating. They also say hydrogen, if used to drive turbines at electric plants, produces nitrogen oxide, a pollutant that helps form ground-level ozone.

Camilla Feibelman, director of the Sierra Club’s Rio Grande Chapter, said this is swapping one form of pollution for another and merely offers the industry a way to rescue its infrastructure as the world moves to renewable energy.

“This isn’t [about] getting to a little better,” Feibelman said. “This is getting to transformationally saving the future for our kids.”

Gould indicated he sees hydrogen as complementing rather than replacing fossil fuel. Again, he said, it doesn’t have to be one or the other.

Peach said there’s no denying the industry funnels colossal sums into state coffers, but he noted there’s a growing chorus of people who want to end the state’s reliance on these revenues tied to a volatile market with booms and busts. They instead want more stable revenue sources, which can be cultivated by diversifying the economy.

Still, weaning the state off its oil dependency will be a Herculean task, Lundstrom said, and it must be done gradually over a lengthy period to avoid displacing workers.

It’s easy for someone in Albuquerque or Santa Fe who doesn’t work in the industry to support an upheaval, she said.

“If you’re working in those oil fields, and you’re supporting your family,” Lundstrom said, “and all of a sudden, those [jobs] go away — what happens?”

(10) comments

joe martinez

Not familiar with an auto engine that would use hydrogen which is a dangerous gas for fuel. There are fuel cells which is essentially a battery with external fuel. The fuel would be something like methyl alcohol, a molecule of which contains a molecule of hydrogen and one carbon. The liquid is fed to the cell and the platinum catalyst that comes from China breaks up the alcohol into an electron and a hydrogen ion, proton. Theoretically, the hydrogen ion combines with oxygen and forms a water effluent and the electron powers an electric motor at the wheel. But no CO2 so be happy. Power a big farm machine with a fuel cell? Good luck. I'll settle for gasoline. Preferably without ethyl alcohol from corn.

joe martinez

What we have here is a failure to communicate. Diversify the economy so we don't rely on oil? Does anyone really think that a major employer from private industry would come to New Mexico when there is AZ, CO, and Texas? Our last two guvs tried with no results in 16 years. Read that China generates 1000 Gigawatts of electrical power from coal with over 100Gs in the pipeline. Energy crunch in Europe and Britain will be addressed with oil from Russia. And our legislators think we can reduce global warming in NM? As the tennis player screams out, THEY CAN'T BE SERIOUS.

Robert Fields

We had a big solar panel manufacturer here (Schott Solar) which could have been a big bonus for the state. The state had put something like $16 million in incentives into the company too. But foreign competition and a slump in demand forced the closure. A high tech energy company for NM that unfortunately got away thanks to foot dragging all over the country. We need solar investments which creates skilled and semi-skilled jobs. We don’t need mega corporations. In fact, it’s far better if NM is built with smaller companies. It’s a single point of failure thing. We don’t need a facebook or Exxon/Mobile. We just need skilled and semi-skilled jobs and wind and solar are great ways to do that.

As to your severely uninformed comments about global warming, the thing is that everyone needs to reduce emissions in earnest now. You people throw up your hands and yell how here in NM we can’t have any effect. Absolutely false. NM could be a big exporter of energy while reducing our own fossil fuel use. Everywhere that buys energy we produce would also emit less greenhouse gases. Our impact could be much larger than just what we use. We have the sun and wind. We could be training and employing New Mexicans while reducing our emissions and the emissions in neighboring states.

And lastly, even if we did none of the above, we still need to reduce our use of fossil fuels. Everybody does. The sooner anyone starts, the better. It buys us time - something we now have in very short supply. And before anyone chimes in with the infantile “but they don’t have to go to bed early” excuse, it doesn’t matter. We have to do it. They have to do it too. Everyone has to greatly reduce fossil fuel use ASAP or things are guaranteed to get bad. Only idiots look at increasing global temperatures that are increasing faster and don’t wonder when our food crops start dying in the fields before they can be harvested.

https://earthobservatory.nasa.gov/world-of-change/global-temperatures

https://www.un.org/en/academic-impact/worlds-food-supply-made-insecure-climate-change

So before you and others carry on about how we can’t do this, we have to. We don’t have a choice without betraying our children. We made a huge mess for future generations. We owe them. One oil and gas mouthpiece here explained he doesn’t have grandkids to worry about. But I do and lots of others do too.

I’m glad politicians are getting the message.

Kirk Holmes

Well said, and nice channeling of Cool Hand Luke. However, obviously we need to work towards a cleaner environment for planet sustainability - but it shouldn't be done via knee jerk reactions of the left.

Chris Mechels

Lujan Grisham discussed a plan at the oil and gas conference to jump-start production of hydrogen fuel, which emits less carbon dioxide than fossil fuels. Trust our Governor to further confuse this issue. She's dumber than a rock.

Perhaps we could bottle her ignorance and burn it. She seems to have an infinite supply.

Robert Fields

Oh yes! Don’t even mention other alternatives that already power cars and generate electricity. I guess you missed the article here about a LANL truck project.

https://www.santafenewmexican.com/news/local_news/los-alamos-lab-working-on-hydrogen-powered-truck-project/article_5bddb196-003b-11ec-8321-f787185f74b4.html

Hydrogen is an amazing fuel. Not appropriate for all uses but it’s a tool in the tool chest and is an appropriate fuel for many uses - especially when you need a lightweight but very energy dense fuel.

I’m not sure what you are complaining about with hydrogen emitting less carbon than fossil fuels. If you’re being sarcastic that burning hydrogen (electrochemically in fuel cells or conventionally with combustion in air) doesn’t emit any carbon and, snicker, MLG doesn’t know that, you’re the one who is actually wrong and don’t know what you’re talking about. Not MLG.

Why you ask? While the actual combining of hydrogen and oxygen releases zero carbon, the main manufacturing process used to generate hydrogen now uses natural gas as the feedstock. Carbon is released in the manufacture of hydrogen. Didn’t know that? Now that you do and you’re finally caught up with MLG on carbon releases with hydrogen fuels. How painless was that?

But to go a step further, with solar- and wind-generated electricity, the natural gas feedstock can be eliminated and you just split water into hydrogen and oxygen without carbon emissions.

There you go, Chris. Now you’re more intelligent than a rock too. Need a bottle?

Robert Fields

Reading the article now, the way to interpret what you said she said, which is actually also correct, is that if you take that hydrogen which is generated from natural gas and use it efficiently like in a fuel cell, it’s actually more efficient and you generate less carbon dioxide than if you burned the gas conventionally. What MLG is proposing, which I see the reasoning but disagree with, is it’s a political way to split the middle. She has political pressures to deal with but that’s what got us here. I don’t support it at all.

The whole fossil fuel industry line of decades not years is a delaying tactic that we don’t have time for. We’re having major weather disasters fairly frequently now while the climate is changing at an unprecedented rate. We don’t have decades. How long ago did we not have major fires every year and now we do. Many other examples. The oil and gas industry is just doing the same thing they always do - pretending we don’t need to do anything too fast so let’s all just relax and burn more fossils.

But any reductions help. Building out more production capacity and more uses would help but I’d much rather see the hydrogen use buildout while also building out solar and wind hydrogen production. No chicken and egg and you gradually push the fossil fuel industry out by replacing their production. But there’s a number of other issues with hydrogen that need better solutions IMO.

tao huhl

The fact is that nearly half of New Mexico's revenue is come from oil industry. These money are used to pay for children's education, salary of police, teacher, professor, government employee, etc. As a poorest state in the nation, it is not wise to restrict oil industry. Comparing the development of Arizona and New Mexico, we can easily learn the importance of pragmatism. Idealism will keep the state and the people poor.

Kirk Holmes

[thumbup]

Robert Fields

We have to do it sometime, tao. Would you rather be dead or have trouble paying your bills?

Sorry. That’s actually a false choice. You guys seem to think if we tell oil and gas to take a hike we have no alternatives and won’t have any income. That’s absolutely false but pretty effective for scaring people into continuing to cut away at the rope holding us up and out of the fire.

The false choice is that oil and gas money is a deal with the devil that actually does endanger our lives. Our ability to live on this planet is in danger. We have choices and one is to invest instead in building out alternatives. Many states have no oil or gas industries at all yet they somehow manage to make do. I’m pretty sure there’s no magic involved, either. What say you? Do they have magic? How can they do it?

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