Senate committee advances bill to create long-term stewardship fund for carbon‑storage projects

The Senate Finance Committee advanced HB 4 58, a bipartisan bill that would establish a long‑term stewardship fund to cover monitoring and certain stewardship responsibilities for carbon dioxide storage projects in New Mexico.

The measure would require operators to pay fees of not less than $0.10 per metric ton of CO2 injected over the operating life of a project — typically described in testimony as roughly 30 years — and would allow the Energy, Minerals and Natural Resources Department to publish a schedule of fees to meet the fund’s projected needs.

Supporters told the committee the bill is designed to ensure long‑term monitoring and to avoid creating orphaned storage sites. Representative Dixon, the sponsor, said the fees would be deposited “for the sole purpose of ensuring the long term storage security of facilities” and described an amendment adopted in the House that lets the state assume stewardship without relieving operators of legal responsibility. Dr. Robert Balch of New Mexico Tech, one of two experts who accompanied the bill sponsor, explained technical aspects of storage and monitoring, describing storage formations as typically between about 5,000 and 20,000 feet deep and saying the sites become more secure over time. Ben Shelton, deputy secretary at the Energy, Minerals and Natural Resources Department (MNERD), told lawmakers the department would assess risk and that some stewardship responsibilities could transfer to the Oil Conservation Division (OCD) after a statutory minimum period.

Opponents said the bill risks extending the life of fossil fuel infrastructure and questioned whether carbon capture and sequestration (CCS) delivers net greenhouse‑gas reductions. Sofia Jenkins Nieto of Youth United for Climate Crisis Action urged rejection, saying the technology “will be disastrous for our communities as they will extend the life of the oil and gas industry” and calling CCS a “false solution.” Camilla Feibelman of the Sierra Club’s Rio Grande chapter questioned whether CCS proposals would lead to more facilities coming online and flagged safety, liability and bankruptcy concerns.

Committee members pressed witnesses on liability and the mechanics of long‑term stewardship. Senator Steinborn asked whether, after the statutory minimum five‑year post‑injection period, the state could be left holding unresolved obligations; Shelton and other witnesses said the statute and subsequent rule‑making would limit what transfers to the state and that operators retain certain liabilities. Witnesses said a House amendment removed the words “all legal” from a transfer clause so that stewardship — primarily monitoring obligations — would transfer, while many legal responsibilities would remain with the operator or revert to it if the fund were insufficient.

Witnesses described the federal permitting context: class 6 underground injection wells are currently permitted by the U.S. Environmental Protection Agency, and the bill’s supporters said state primacy (authority to implement the class 6 program) would let New Mexico add conditions such as tribal consultation and community benefit agreements. The bill’s sponsor cited a companion bill, HB 4 57, as the vehicle for some of those additional requirements.

Fiscal and economic details were discussed during testimony. Dr. Robert Balch and another technical witness sketched scenarios used to estimate a stewardship fund: assuming up to about 10 million tons per year of storage over roughly 35 years (operational period plus a five‑year pre‑transfer time) and a 5–6% return, the sponsor’s witness said the fee baseline would generate roughly $300 million in fund assets in that scenario; the bill also permits OCD to increase the fee if the fund’s receipts are insufficient. Supporters also said landowners and local communities could receive royalties or other economic benefits when storage is sited on or beneath private or state land.

After nearly three hours of testimony and questions, the committee voted to give the bill a do‑pass recommendation. The roll call showed 10 senators voting yes and one voting no.

Because the bill interacts with federal permitting (class 6 primacy), rulemaking and a companion bill that would address tribal consultation and financial assurances, witnesses repeatedly told the committee that statutory language would be supplemented by subsequent rule‑making and implementation steps.

The committee’s action sends the bill to the next stage of the legislative process with a recommendation to pass.