Committee approves fund to finance long-term stewardship for geologic carbon storage as part of primacy push

The House Appropriations and Finance Committee voted to advance House Bill 458 as twice amended, approving language that creates a long-term stewardship fund to support state oversight of geologic carbon dioxide storage and authorizes the Oil Conservation Division (OCD) to set a fee schedule.

Why it matters: HB 458 is part of a pair of bills that supporters say are needed so New Mexico can assume primacy from the EPA for Class VI carbon-storage wells. Supporters and experts said primacy would allow the state to adopt rules that go beyond federal requirements, add tribal consultation and community-benefit provisions, and tailor oversight to New Mexico conditions. Opponents said carbon-capture-and-storage (CCS) risks lock in reliance on fossil fuels and that the state could inherit long-term liabilities.

Key provisions and amendment: The committee adopted an amendment (231707.2) that changes the fee language to require a fee “not less than 10¢ per metric ton” and directs the Oil Conservation Commission to “establish by rule a fee schedule sufficient to meet the projected needs of the fund.” The amendment also changed statutory language so that after five years the state may accept stewardship responsibilities (striking prior language that suggested the state assume legal responsibility at that time).

Technical and financial details: The sponsor and technical witnesses said the fee would be collected while a well operates; many projects would operate for decades, and the fund is intended to grow to cover long-term monitoring and stewardship costs. The sponsor and New Mexico Tech witnesses discussed storage capacity estimates (San Juan Basin and Permian Basin cited) and said the fund could grow substantially over time based on projected capacity. Experts explained 45Q tax credits and other federal incentives operate separately; 45Q values for captured CO2 have varied over time and depend on capture source and storage method.

Public comment: Opponents including the Sierra Club (Rio Grande chapter), the Western Environmental Law Center and the Center for Biological Diversity urged no pass on the bill, citing concerns about incentives to prolong fossil-fuel extraction, liability timelines and potential risks to water, public health and frontline communities. Supporters such as PNM and the New Mexico Federation of Labor said CCS could create high-wage jobs and that the state should be prepared if CCS projects become viable.

Regulatory and tribal outreach: Sponsors and agency staff said they would pursue EPA primacy through a detailed rulemaking process and that EPA has encouraged states to apply. Agency witnesses said the EPA has announced funding to help states seek primacy and that OCD plans a rulemaking process with enhanced public participation, tribal consultation and outreach beyond minimum federal notice requirements.

Committee action: After adopting the amendment, the committee approved a do-pass recommendation on HB 458 as twice amended. Representative Sanchez moved the do-pass; Vice Chair Chatfield seconded. Representatives Hernandez and Little recorded opposition in the committee voice tally.

Next steps: With committee approval, sponsors said the state would pursue primacy and that OCD would build rules and outreach, including tribal engagement and community-benefit agreement expectations as rulemaking proceeds.