New Mexico faces a seminal moment in its relationship with the oil and gas industry as President Donald Trump vows to slash federal regulation, enforcement and funding. That leaves the state to grapple with a fraught and expensive question: Will New Mexico pick up the slack in policing an industry that generates more than a third of the state budget, but also more than of its climate-warming pollution?
In addition, the state鈥檚 current 60-day legislative session may well mark the final time legislators will debate these weighty issues during Democratic Gov. Michelle Lujan Grisham鈥檚 final term as governor. Next year鈥檚 one-month session is devoted to the state budget, and later that year, voters will elect a new governor.
Lujan Grisham kickstarted the state鈥檚 current fight against climate-warming greenhouse gas emissions when she took office in 2019, and a set of bills to turn those goals into law is again back at the Legislature.
This session could be the last chance to get those laws passed for the foreseeable future for another reason: Since 1986, New Mexicans have new governors from the opposing party. With that history as a guide, the next resident of the governor鈥檚 mansion could well be a Republican, and the state鈥檚 conservative party has wholeheartedly thrown itself behind Trump鈥檚 鈥淒rill, baby, drill!鈥� agenda.
New Mexico rose to become the second-largest oil producer and fourth-biggest natural gas producer in the country during Lujan Grisham鈥檚 tenure. But as oil production leapt more than 560% in the past , funding for the agencies that monitor and regulate the industry hasn鈥檛 kept pace. For the past few years, the New Mexico Environment Department has partnered with the U.S. Environmental Protection Agency on sweeps and with the U.S. Department of Justice on handing down . Both efforts are likely to end in the second Trump administration.
鈥淲e will not be able to rely on EPA鈥檚 support to protect air quality and public health,鈥� said Erik Schlenker-Goodrich, the executive director of the Western Environmental Law Center. 鈥淭he Legislature will certainly need to step up.鈥�
This session, New Mexico鈥檚 legislators have lined up a raft of bills to clamp down on the industry. But history , those bills will likely have a hard time passing the Democratic-controlled Legislature. Part of the timidity is driven by money: Oil and gas revenues will comprise about 35% of the general fund budget for the upcoming year, according to the Legislative Finance Committee. In addition, New Mexico鈥檚 political landscape is one of the few in the country where from the oil and gas industry are spread broadly between political parties.
So far, legislators have proposed bills that will reinforce and expand what has already been done to reduce the state鈥檚 climate footprint and protect air quality and health in the state. Some of the bills are returning for second or third attempts at passage; others are brand new.
Mimi Stewart, president pro tem of the state Senate, filed the 鈥淐lear Horizons and Greenhouse Gas Emissions鈥� to codify Gov. Lujan Grisham鈥檚 goal of a 45% reduction in greenhouse gas emissions by 2030 compared to 2005 levels 鈥� part of the governor鈥檚 upon taking office in 2019.
The bill, an update to the state鈥檚 , would establish statewide greenhouse gas emission limits and create mechanisms to monitor and inventory those emissions. The bill places the power to regulate emissions with the state鈥檚 Environmental Improvement Board and sets aside $3 million annually for the New Mexico Environment Department to administer the new program. It singles out methane emissions from the oil and gas industry because of their particularly powerful climate warming potential.
The bill passed its first hearing Jan. 28, but not before coming under heavy fire from industry lobbyists and Republican senators on the committee. Jim Winchester, the executive director of the Independent Petroleum Association of New Mexico, said the bill would harm 鈥渢he basic necessities of life.鈥� A lobbyist from the Permian Basin Petroleum Association made an unexpected argument, calling the bill both 鈥渦nderfunded and overly ambitious.鈥� And Republican Sen. Larry Scott said the bill 鈥渨ill make us a Third World.鈥�
Stewart batted away the criticisms. At one point, during a discursive question about the bill鈥檚 fiscal impact, Scott asked her to define gross domestic product. 鈥淣o,鈥� she said. 鈥淚鈥檓 sure you know what it is.鈥�
鈥淵ou cannot watch the fires and floods in Roswell and Ruidoso and L.A. and not know something is seriously wrong.鈥� Camilla Feibelman, director of the Sierra Club Rio Grande ChapterIn earlier comments, Stewart said the bill sets goals that some oil and gas producers in the state have already pledged to reach. 鈥淣ew Mexico has fallen behind in achieving our emissions goals,鈥� she said. 鈥淎n updated, enforceable plan is needed to address this gap.鈥� Two supporting bills would provide mechanisms and community investments to support the act, she said.
Rep. Debra Sari帽ana of Albuquerque has filed three bills to regulate how oil and gas producers can operate in New Mexico. 鈥淲e have an industry that鈥檚 just not doing what they鈥檙e supposed to,鈥� she said. 鈥淪o we need to do something to help them figure out how to follow the rules.鈥�
One bill would create one-mile around schools where new wells cannot be drilled. A similar bill proposed in the last session was shot down before it even left the gate, of a legislative requirement that bills proposed during the short, 30-day sessions of even-numbered years deal, in some way, with the state budget.
Sari帽ana鈥檚 second bill would the Oil Conservation Division鈥檚 mission statement to require consideration of human health and the environment in all of its work. Currently its mission is to conserve oil and gas, reduce waste in the production stream, protect the rights of oil and gas owners and regulate waste disposal from production. It passed its first committee hearing 6-3 on Jan. 30.
The bill 鈥� prompted in part by in 鈥� would limit the number of new facilities in counties that exceed national clean air standards. The bill is squarely aimed at pollution in Eddy and Lea counties, both in the Permian Basin and home to some of the state鈥檚 worst . For years, air in that corner of the state has exceeded national ozone standards, but the EPA hasn鈥檛 acted to reduce it. If it had, the result could have throttled new production.
But after Trump鈥檚 election and promise to deregulate the oil and gas industry, that possibility likely died.
鈥淲e have to dig in and tell the industry, 鈥榊ou can鈥檛 keep doing this to New Mexicans,鈥欌�� Sari帽ana said. 鈥淎nd if it means we have to stop or pause new wells, that鈥檚 what we have to do.鈥�
Gov. Lujan Grisham鈥檚 office said she is working with the Energy, Minerals and Natural Resources Department on an update to the 1935 Oil and Gas Act. It will be the third session in a row that a version has been floated to update the state鈥檚 bedrock Oil and Gas Act, which covers most aspects of how the two fossil fuels are produced in the state and hasn鈥檛 had major facelifts , when the industry looked far different than today. Sidney Hill, public information officer for the Energy, Minerals and Natural Resources Department, said the bill will be similar to proposed in the last session, but will not include setback requirements (like those in Sari帽ana鈥檚 bill), freshwater use limitations or bonding increases to cover the costs of plugging wells abandoned by their owners.
In addition, Lujan Grisham is pushing to get her initiative funded and running. Rep. Susan Herrera has agreed to carry .
The project would buy treated water pulled from deep brackish aquifers or wastewater from oil and gas production and sell it to commercial users such as solar panel manufacturers or hydrogen producers.
One red flag for environmental groups is that the plan proposal is heavy on oil and gas wastewater treatment, which could end up with the state indirectly paying the oil and gas industry for their highly toxic effluent. Currently, oil and gas companies generally pay to have the waste reinjected in deep wells, but that has led to a rising number of across the Permian Basin.
Last session, Lujan Grisham unsuccessfully asked for $200 million for the project. This year鈥檚 , and a 5-cent fee for every barrel of produced water created during oil and gas production. Schlenker-Goodrich, the Western Environmental Law Center executive director, echoed other environmentalists鈥� concerns when he called the program a 鈥渂oondoggle fossil fuel project.鈥�
On the revenues front, Rep. Matthew McQueen has a bill to increase the royalties paid by producers on state lands to match those paid on private lands. Co-sponsors include Sen. Liz Stefanics and the powerful head of the Legislative Finance Committee, Sen. George Mu帽oz. Last year McQueen called it 鈥溾�� that the state charges less than neighboring private landowners do for extracted oil and gas. The bill failed to advance in the final days of the session.
McQueen also filed a to amend the state constitution to replace the annual rotating one-month, two-month legislative schedule with annual 45-day sessions, an effort to smooth out a legislative process that stifles debate every other year. In addition, it would remove the restriction on even-year sessions to consider only budget matters. Those two updates would allow major regulations 鈥� for example, on the oil and gas industry 鈥� to be debated annually instead of biannually. If passed, the measure would have to be ratified by voters in the next election. It passed its first committee hearing Jan 29.
Asked about the array of possible new regulations lining up at the Legislature, Missi Currier, president and CEO of the New Mexico Oil and Gas Association, the largest industry association in the state, said her group supports Lujan Grisham鈥檚 Strategic Water Supply plan and reform of the reclamation fund that pays to plug abandoned wells, but didn鈥檛 directly address the other bills.
鈥淥ur industry has made significant strides in reducing emissions through advanced technologies and science-forward practices,鈥� Currier said. 鈥淲e support efforts that build on these successes.鈥� She said that any new laws or rules 鈥渟hould be balanced and consider the economic impact to the state and environment鈥� and 鈥渆nsure business is able to grow and succeed in New Mexico鈥檚 political and regulatory environments.鈥�
Sari帽ana said that in her position with the House finance committee, she sits between two representatives who echo Trump鈥檚 鈥淒rill, baby, drill!鈥� mantra. And she said another reminds her, 鈥淵ou don鈥檛 complain about spending the money鈥� from oil and gas revenues. But, she said, those legislators 鈥渄on鈥檛 see the big picture on what it鈥檚 doing to the country, and the world, and the communities, and the kids.鈥�
Lujan Grisham鈥檚 2019 executive order to reduce the state鈥檚 greenhouse gas emissions lies behind much of this legislation and the reasons for the order couldn鈥檛 be clearer. Again in 2024, climate change 鈥� fed by burning fossil fuels 鈥� warmed and dried the state while making rainstorms less frequent but more powerful. In June, lightning ignited drought-withered forests surrounding Ruidoso, New Mexico, and the torched thousands of acres and chunks of the town. A few weeks later, torrential rains on the burn scars fed that wiped out more of the town. Then, over a few hours on Oct. 19, a record 6 inches of rain fell 74 miles away on Roswell, New Mexico, triggering deadly .
鈥淵ou cannot watch the fires and floods in Roswell and Ruidoso and L.A. and not know something is seriously wrong,鈥� said Camilla Feibelman, director of the Sierra Club Rio Grande Chapter.