Monday, October 11, 2010

Energy, environment rules may roll back with new governor

Neither of New Mexico's gubernatorial candidates — Democrat Diane Denish and Republican Susana Martinez — are likely to put environmental issues quite as high on their agenda as Gov. Bill Richardson.

They've already indicated they might overturn or weaken some environmental rules Richardson's administration has put in place, such as the pit rule for wastes from oil and gas production and the greenhouse gas emissions cap.

A governor can do a lot to upend or change environmental rules and orders approved under a predecessor. She can appoint her own people to commissions, direct those commissions to revisit rules and direct staff to ignore existing rules.

"There could be rollbacks of environmental regulations after the elections happen," said Jim Norton, director of the environmental protection division at the New Mexico Environment Department.

Denish at least has environment and energy listed as issues on her campaign website and provides a list of "six environmental principles to lead by" on her site and promotes the creation of "sustainable jobs."

Environment, water and energy were not "issues" topics listed on Martinez's official campaign website.

Follow the money

Thus far, oil and gas companies have been top industry donors to the Martinez campaign, giving her $481,125. Also among her major financial supporters are homebuilders ($462,801) and conservative issue groups ($250,000), according to Texas homebuilder Bob J. Perry, who funded the Swiftboat ad campaign against unsuccessful Democratic presidential candidate John Kerry, gave her $350,000 in May.

Denish also has received money from the oil and gas industry ($71,400), much of it from companies in her hometown of Hobbs, in an area sometimes referred to as "Little Texas." Her biggest financial support has come from lawyers and lobbyists ($444,651) including labor unions, followed by real estate donors ($340,185).

Greenhouse gas cap

On some environmental issues, such as a proposed cap on greenhouse gas emissions, Martinez and Denish appear to have a similar stance at first glance. But while both oppose a state greenhouse gas cap and trade rule — they do so for different reasons.

Denish believes climate change is occurring, but that any effort to reduce greenhouse gas emissions must be global and national, not state-by-state.

Martinez adheres to the climate change naysayer line, saying an emissions cap is anti-business, would increase taxes and isn't based on sound science.

The New Mexico Environmental Improvement Board held two weeks of heated hearings regarding a controversial greenhouse gas emissions rule. The New Mexico Environment Department and the nonprofit New Energy Economy have proposed separate regulations that would cap and reduce greenhouse gas emissions. Any rule, if approved, would take effect in 2012. The EIB is scheduled to vote on the Environment Department petition on Election Day, Nov. 2.

The state petition seeks to require power plants, oil refineries and gas treatment facilities that produce more than 25,000 metric tons of carbon dioxide gas annually to reduce emissions by 2 percent a year from 2012 levels and allow industries to trade carbon credits within a Western states exchange.

Pit rule

In 2008, the state Oil Conservation Commission approved a rule to intended to reduce contamination of shallow groundwater aquifers from unlined pits that hold waste from oil and gas production.

The rule — proposed by a task force of oil and gas representatives, environmentalists, ranchers and local government representatives — requires producers to line pits used for temporarily storing production waste and later to haul the waste to a licensed disposal center.

Denish says "one size doesn't fit all" when it come to governmental rules and thinks the rule should be "revisited." In addition, she wants to adopt a process to make rulemaking more predictable and fair.

Martinez claims the pit rule has driven the cost per well up by "as much as" $250,000. But according to testimony by well producers during the pit rule hearing, the costs under the new rule run an extra $35,000 and $150,000, depending on the depth of the well. The $250,000 figure is the cost of cleaning up old "legacy pits" constructed before the pit rule.

Martinez also says New Mexico was the only state to see a drop in gas production in 2009 because the pit rule chased away producers. But Kansas also saw a decline in gas production. And the sharp drop in oil and gas prices was the major cause of reduced production in 2008 and 2009, according to a report on the Economic Impact of the Oil and Gas Industry by New Mexico State University economist C. Meghan Starbuck.

Oil and gas prices dropped by 70 percent or more in the last half of 2008 and remained depressed into 2009. Oil production in New Mexico actually increased in 2008 while natural gas production has seen a decline since two years before the pit rule.

This year, oil and gas leases in New Mexico brought in a record amount of money, according to the federal Bureau of Land Management.

"The idea that we're running industry out doesn't hold water," said petroleum engineer and attorney Mark Fesmire, head of the state's Oil Conservation Division.

Before the rule, field staff from the Oil Conservation Division found 800 cases of groundwater contamination due to oil and gas wastes. Since the final version of the rule was adopted, staff have found no contamination at pit sites.

Water realities

Neither candidate, in answering a specific question about the slow progress of adjudicating water rights, proposed a specific idea to help move those cases through the courts faster.

The snail's pace of water adjudications in the last century — establishing who owns what legal rights to water resources — remains a weak link in the New Mexico's ability to manage its water for the future while protecting senior water rights.

State Engineer John D'Antonio said additional funding and the lifting of a hiring freeze would help finish adjudications more quickly. But he doesn't expect that to happen during the state's current economic doldrums.

His office is involved in a dozen active adjudications involving 72,000 water-rights holders. He said his office has 50 vacancies and the litigation division has seen a 30 percent reduction in staff. "We have a bare-bones staff for adjudications," D'Antonio said. "Our goal is to finish these adjudications before starting new ones."

The largest, potentially most volatile water rights adjudication — the Middle Rio Grande area including Albuquerque — has yet to go to court.

The Republican candidate was targeted by an unattributed video posted on YouTube that accused the El Paso native of wanting to "send New Mexico's water to Texas." The video was taken down shortly after a few newspapers and bloggers wrote about it.

Martinez would have no power to send extra water to Texas if she became New Mexico's governor, even if that was her desire. Water shares from both the Pecos and Rio Grande rivers that flow through New Mexico into Texas are governed by interstate stream compacts and multi-state commissions.

Contact Staci Matlock at 986-3055 or

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