2015-2016

CVNM Conservation Scorecard – Conservation Voters New Mexico

What is “pre-emption,” and why should I worry?

Pre-emption: you and your friends are playing ball, and bigger kids say they get to make the rules.

In legislative terms, pre-emption means bigger government excluding counties and cities from having any say about an issue. In 2015, five bills proposed state oil and gas pre-emption, and would have forbidden any local ordinance that limited drilling. Thanks to CVNM, our allies and strong citizen activism, all five were defeated — but they will most likely be back in future legislative sessions.

Pre-emption isn’t always bad, if it benefits all citizens: federal statutes pre-empt local racial segregation laws, for example. But in NM and several other states, pre-emption is being pushed for the benefit of oil and other polluting industries, at the expense of citizens. This push is a priority of the “bill-mill” American Legislative Exchange Council, or ALEC, to which the majority of NM legislators introducing or supporting pre-emption in 2015 belong.

At least 25 New Mexico cities and counties, including oil and gas producers, have found local drilling rules necessary to protect citizens, because state rules fail to. The state scarcely bothers with setbacks from homes, schools or hospitals, for example. Nor does New Mexico, unlike some states, make drillers compensate surface owners for damage or property loss. The state is focused on the rights of oil and gas owners, and on tax revenue. It is largely up to counties and cities to guard surface owners’ rights.

To understand what’s at stake, remember an economic concept called “externalization of costs.” This means getting somebody else to pay for your true costs of doing business. Expecting taxpayers to foot the bill to upgrade roads for oil tankers is a common example. Externalization can also be hidden – when a rogue driller walks away from contaminated soil and water, the costs fall on the citizens. The costs go beyond dollars: because of tankers on unimproved roads, Lea County has seen a recent rash of tanker/car fatalities.

When locals refuse to subsidize externalization, industry lobbyists claim local ordinances “increase drilling costs.” That’s like saying if renters trash an apartment, making them pay for damages “increases” their costs unfairly.

Industry claims local regulations create “a patchwork” of rules, and they want “consistency.” Consistently strong protections would be great, but in fact, pre-emption would weaken regulation. NM oil and gas laws are outdated, with penalties unchanged since the 1930s, overstretched inspection, and enforcement in the hands of political agencies charged with maximizing production. “Consistent rules” in NM means watered-down rules.

Two basic types of pre-emption bills have been introduced in the past few years. Straight pre-emption would ban local laws: HB 366 (Rep. Gentry), HB 199 (Rep. Bandy) and SB 421 (Sen. Ingle) were 2015 examples. A variation would require one-size-fits-all laws state-wide; SB 601 (Sen. Griggs) attacked state rules that protect Otero and Sierra counties, and the Galisteo Basin.

De-funding is an underhanded type of pre-emption: “if you won’t let us drill, we won’t give you any taxes from drilling.” Bills like SB 184 (Rep. Sharer) really say “If you won’t let us externalize costs and ignore regulation, we will give you even less revenue to offset the damage done.” No NM jurisdiction has actually “not allowed drilling;” Mora County tried, but its ordinance was overturned in court. De-funding pits county against county, each hoping to benefit from funds taken away from the other.

Industry lobbyists also accuse local regulations of “killing jobs” and “driving drilling out of state.” In fact, regardless of regulations imposed, most well-paid drilling jobs, and most profits, go to out-of-state specialists. Oil and gas, even counting incidental jobs, provide a maximum of 3% of real income in New Mexico, while threatening businesses and institutions that provide the other 97%. Drilling activity is entirely controlled by geology and the global price of crude; its boom/bust cycle actively damages economic diversity and stability.

Today about seven out of the ten top oil- and gas-producing Western states allow local regulations for surface protection, while the state controls below-ground technical matters. This is the de facto situation in NM. State pre-emption would greatly diminish citizen protection, increasing the power of corporate interests with no ties to the land or to New Mexico. Unless the state steps up its game, oil and gas pre-emption battles await us every legislative session. If local citizens bear the costs, they should have a say about what happens in their own communities.