A change in energy - Albuquerque Journal

A change in energy

The blue wave that swept November’s state elections is rapidly turning green as newly installed state officials prepare sweeping reforms in New Mexico’s energy industry.

Gov. Michelle Lujan Grisham promised to build an economy powered by renewable generation and aggressively pursue policies to protect the environment against adverse impacts from the state’s booming oil and gas industry. Her newly appointed Energy, Minerals and Natural Resources Department secretary-designate, Sarah Cottrell Propst, is working to turn those campaign promises into concrete action through legislative and administrative initiatives that could make New Mexico a national leader in clean energy development.

Stephanie Garcia Richard

Those efforts are backed by newly installed State Land Commissioner Stephanie Garcia Richard, and by Democratic legislators who are pushing numerous energy-related bills in the current legislative session.

“We’ve hit the ground running,” Cottrell Propst said. “We have many high-caliber, experienced professionals here who care about serving the people and protecting the environment. We’ll work to carry out the governor’s bold energy vision for the state.”

On the renewable energy front, state officials want new mandates to require utilities to derive 50 percent of their electricity from solar, wind and other clean resources by 2030, and possibly 80 percent by 2040. That’s up from 20 percent by 2020 under New Mexico’s current renewable portfolio standard.

Other initiatives include:

• Renewing a 10 percent tax credit for rooftop solar systems that expired in 2015.

• Mandates for solar installations on government buildings.

• Promotion of community solar projects and utility-scale wind and solar development on state and tribal lands.

• Incentives to adopt electric vehicles and build charging stations.

• Increased requirements for utilities to pursue energy efficiency.

As for oil and gas, Cottrell Propst’s department and the State Land Office are working on initiatives to increase environmental protection efforts and lower carbon emissions. Top priorities include:

• Bigger budgets for both agencies to improve industry oversight.

• New rules and regulations to lower methane emissions.

• Changes in state statute to allow the Oil Conservation Division to directly impose penalties on industry violators.

• Statutory reforms to raise royalty rates for oil and gas production on state lands.

The State Land Office pushed Texas-based Siana Operating LLC in 2016 to clean up this waste water disposal site near Eunice in southeastern New Mexico.

Immediately raising agency budgets is considered critical. Cuts under former Gov. Susana Martinez led to vacancy rates of about 20 percent at the Oil Conservation Division and the State Land Office, undercutting regulatory activities and generating criticism that the OCD has done little to curb environmental violations. It’s also slowed administrative processes, with a backlog of some 250 drilling applications.

“We need to get appropriately staffed to handle the workload,” Cottrell Propst said. “Industry is frustrated by hundreds of cases of backlogged applications. … But the OCD will also receive clear direction to take environmental protection seriously.”

PNM on board with new energy goals

Public Service Company of New Mexico and other utilities will likely support many of the clean energy goals, including the 50 percent renewable mandate, given the broad efforts already underway to move from fossil fuels to low- and non-carbon resources.

“For PNM, 50 percent is doable,” said Director of Planning and Resources Pat O’Connell. “…Prices have come down so much that renewables are not just an alternative anymore. They’re staple resources for the grid.”

The oil and gas industry, however, is concerned about some initiatives, particularly statutory reforms. But it’s willing to work with the state on realistic policies that don’t overburden operators or endanger an industry that’s generated an historic surplus in government revenue this year of more than $1 billion, said New Mexico Oil and Gas Association Executive Director Ryan Flynn.

“We pride ourselves on approaching issues from a practical perspective to get at what is technically feasible,” Flynn said . “We want a good relationship and to work together.”

Environmental organizations, meanwhile, are fired up after eight years under Martinez, who pursued an “all-of-the-above” energy strategy that de-emphasized special incentives for renewables, opposed new regulations to control carbon emissions and slashed agency budgets.

“For us, it’s a green tsunami, with Democratic officials and legislators sweeping into office on platforms that clearly reflect our top priorities,” said Sierra Club Rio Grande Chapter Director Camilla Feibelman. “…It’s now time to look at the architecture of those commitments, and the legislative session marks the beginning of that.”

Oil and gas industry on edge

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