By Brenna Goth | Bloomberg Law
New Mexico Gov.-elect Michelle Lujan Grisham (D) wants to make her state a leader in cutting methane emissions.
Producers in the busiest U.S. oil field may face new regulations under New Mexico’s Democratic Gov.-elect Michelle Lujan Grisham, who vowed to make the state a leader in reducing methane emissions.
Lujan Grisham joins incoming Land Commissioner Stephanie Garcia Richard as Democrats elected Nov. 6 who campaigned on shaking up environmental policy in the state. Garcia Richard, who will oversee state trust land leased for oil and gas extraction, beat the Republican candidate backed by oil and gas companies, including Chevron Corp.
New Mexico’s Permian Basin thrived under the administration of Gov. Susana Martinez, a Republican credited by some with reducing barriers for companies. The state’s oil production will probably have tripled over Martinez’s time in office, Robert McEntyre, spokesman for the New Mexico Oil and Gas Association, told Bloomberg Environment.
Environmental groups, though, criticized Martinez for favoring industry over the health of the state’s natural resources. The new leadership means new protections, Demis Foster, executive director of Conservation Voters New Mexico, told Bloomberg Environment.
“Michelle Lujan Grisham has made a promise to us that she will hold them accountable,” said Foster, whose group’s political-action arm donated to her campaign.
New Governor Wants ‘Strong’ Regulations
Oil and gas industry representatives are watching how campaign politics turn into policy proposals, said McEntyre, whose association doesn’t endorse candidates.
Garcia Richard will promote legislation to raise royalty rates on state trust land leased for extraction, according to her campaign website. She said the move will generate more revenue for schools.
Lujan Grisham’s methane mitigation plan said she favors “strong, sensible regulations” to capture the greenhouse gas emitted during oil and gas production. Some major companies are already addressing the pollution, she said, but the state needs consistent standards.
Methane emissions in the basin are already falling from industry innovation, McEntyre said. New Mexico shouldn’t implement rules solely “to claim that we’ve done something,” he said.
Oil and gas advocates want to work with new leadership next year to preserve the industry’s growth. The current boom is a boon for the state’s economy, McEntyre said.
“These regulations have impact on business and ultimately impact the state’s bottom line,” he said.
Chevron Corp, ExxonMobil, Apache Corp., and Concho Resources Inc. didn’t immediately respond to requests for comment by Bloomberg Environment. Occidental Petroleum Corp. referred Bloomberg Environment to the New Mexico Oil and Gas Association.
Clean Energy On Tap
Conservation groups said they’re poised to move forward next year with environmental policies that Martinez wouldn’t sign. The governor often sparred with the Democrat-led Legislature and vetoed its bills, such as a measure to restore a state solar energy tax credit.
Lujan Grisham, on the other hand, committed more than a year ago to push legislation requiring utilities to produce 50 percent of their power from renewable resources by 2030, Foster said. Lujan Grisham said she may also support raising that standard to 80 percent by 2040.
Environmental organizations say promoting renewable energy could help lessen New Mexico’s reliance on the oil and gas industry. The unreliable revenue is a challenge to the state’s budget.
“It is a roller coaster every year,” Foster said.
To contact the reporter on this story: Brenna Goth in Phoenix at bgoth@bloomberglaw.com
