The New Mexico House of Representatives recently conducted a hearing on H.B. 133, a bill proposing amendments to the state's existing Oil and Gas Act. The proposed changes sparked mixed reactions from citizens, with some expressing support while others voiced concerns. Carla Sonntag, President of the New Mexico Business Coalition, was among those who expressed apprehension about the potential impact of the bill on the oil and gas industry.
Sonntag stated, "Our overriding concern is that there continue to be burdensome regulations, fees and rules imposed on the industry that is currently providing about 40% to 50% of the state’s budget." She further added, "We’re seeing that the state is happy to take the money from this industry but it frequently is raising barriers and constraints that cause more harm to our operators."
The Oil and Gas Act in New Mexico, which serves as the primary regulatory framework for these industries in the state, was originally enacted in 1935 and last updated in the 1990s. According to Source NM, officials from the New Mexico Energy, Minerals and Natural Resources Department have suggested that this act is outdated. Despite several regulatory laws passed by Governor Michelle Lujan Grisham in 2021 and 2022 relating to oil and gas industry regulation, she faced criticism for not doing enough during the 2023 legislative session.
As reported by New Mexico In Depth, when SB 133 was under committee review, lawmakers attempted to strike a balance between environmental concerns and fears of overregulation potentially undermining profits from one of New Mexico's largest revenue sources. Provisions requiring oil and gas infrastructure to maintain certain distances from schools, health facilities, multifamily housing units, occupied homes and waterways were removed before presenting the bill to committee. However, provisions increasing bonds for wells required, legal penalties and fees remained intact along with incorporating a 98% gas capture target into law.
During the hearing on H.B. 133, representatives from oil and gas companies and pro-business advocates expressed concerns that updating the Oil and Gas Act could lead to businesses relocating out of the state, job losses, a decline in New Mexico's revenue, and disproportionately harsh impacts on smaller oil and gas companies compared to larger ones. The oil and gas industry is a significant contributor to New Mexico's general fund revenue, making its regulation a complex issue for all parties involved.
As per the New Mexico Political Report, H.B. 133 passed the House committee with a vote of 7-4. All Democrats voted in favor while all Republicans opposed it. The bill will now proceed to the House floor for voting.
Sonntag is not only the president but also the founder of the New Mexico Business Coalition as stated by ABQ Connect. This nonpartisan organization serves business owners, employees, and individuals in New Mexico.
