Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Oil And Gas Penalties topic
No spam. Unsubscribe anytime.
House committee advances bill raising oil-and-gas violation penalties, expanding fee uses
Summary
The House Energy, Environment & Natural Resources Committee voted to pass House Bill 259 as amended, raising statutory penalties and allowing the Oil Conservation Division to use fee revenues for IT and administrative needs; the measure drew opposition from oil-sector trade groups and some committee members.
Chair McQueen, chairing the House Energy, Environment & Natural Resources Committee, opened debate Thursday on House Bill 259, which would raise civil penalties and certain fees under the Oil and Gas Act and expand permissible uses of the Oil Conservation Division’s fee fund.
The bill’s sponsor told the committee the measure “simply raises existing penalties and fees to a more modern current rate,” arguing higher penalties are needed so violations are not treated “as just a cost of doing business.” Ben Shelton, general counsel for the Energy, Minerals and Natural Resources Department (EMNRD), told the committee the bill also would allow the division to adjust fees by rule in the future and expand the fee fund to pay for information-technology staff to improve data collection and public reporting.
Proponents said the current statutory penalty levels are outdated. Tanis Fox of Western Environmental Law Center said raising penalties would “bring penalties under the oil and gas act more in line with penalties in comparable environmental statutes in New Mexico,” noting examples cited to the committee such as the Water Quality Act’s $15,000 daily maximum versus the Oil and Gas Act’s current lower daily maximum. Charles Goodmacher of Earthworks said stronger penalties would deter violations and that the industry continues to thrive despite regulation.
Industry groups and business advocates opposed the bill. Jim Winchester of the Independent Petroleum Association said members worry enforcement has shifted toward punitive ticketing and said the proposed increases are “beyond excessive.” Ashley Wagner, vice president of government affairs for the New Mexico Oil and Gas Association, said it is “not clear how the increased amounts were determined” and called the proposed changes arbitrary. Several trade and business witnesses asked for the data and calculations used to set the new fee and penalty levels.
Committee members pressed EMNRD staff on how penalties are assessed and how often the division collects assessed amounts. The department said since administrative-penalty authority was restored in February 2019 the division has assessed about $29 million and collected a little over $8 million, and that most penalties are negotiated down in settlements. Department witnesses said increasing the statutory caps would reduce the administrative burden of aggregating many smaller penalties to reach a number that would compel compliance.
Several members expressed concern about indexing future increases to the Consumer Price Index and about delegating too much discretion to an agency to spend fee proceeds on staffing rather than seeking appropriations. Representative Murphy and Representative Montoya asked for more data on how many operators repeatedly violate rules, how quickly operators generally remediate after notice of violation, and how the department determines when to pursue larger penalty assessments. EMNRD officials said many violations are concentrated where most activity occurs and that the larger penalties are intended to target infrequent but potentially severe cases.
After debate and a friendly amendment that reduced the bill’s top escalator cap, the committee approved the measure by roll call. The committee’s report shows a committee vote of 7 to 4 to pass the bill as amended. The bill was referred to the Judiciary Committee and then Appropriations for further consideration.
Votes at a glance: House Bill 259 — committee action: pass as amended, 7–4.
Why it matters: Supporters say restored penalty authority and higher caps will give regulators a more effective, less administratively burdensome tool to compel compliance and protect groundwater, air and public health. Opponents say the increases are arbitrary, risk deterring investment and transfer future cost-setting authority to the agency.
What’s next: HB 259 was sent to Judiciary and then Appropriations for further review and possible floor action. Several committee members requested additional data from EMNRD that they said they would want before considering the measure in appropriations.
