2022 Oil and Gas Tab

State landmen’s association works on behalf of industry

By Lisa Dunlap Roswell Daily Record

The New Mexico Landmen’s As sociation represents the state’s professionals and has histori cally drawn a great number of its board members from the Roswell area, said Stephen Neria, an inde pendent contractor and a member sinceNeria2015.isserving now as the presi dent of the board.

The local association has about 250 members from New Mexico, Texas, Colorado and Oklahoma, according to its website, and Neria said that a number of board mem bers are from the Roswell area.

The presence of landmen here, he said, has a lot to do with the his tory of the industry in the area. From the 1940s to the 1970s, Ro swell was the base for 20 major oil companies, according to volume 2 of the book “The Permian Basin: Petroleum Empire of the South west,” published in 1977. In ad dition to national companies such as Humble Oil, ARCO, Texaco and Gulf, numerous independent ex ploration businesses an operators were based here, some of whom are familiar names. They include Yates Petroleum Co., Hanagan Petroleum Corp., Read and Stevens, Lawrence C. Harris, Jack McClelland and Douglas L. McBride.

The Landmen’s Association and the American Association of Petro leum Landmen, which has 40 affili ates, primarily focus on establish ing industry standards and forms, advancing their profession through training and certifications, and ad vocating on behalf of the oil and gas industry with the U.S. Congress and state legislatures, state regula tors and courts.

Neria describes the landman’s job as investigating the legal ownership of the mineral and development rights for private and government parcels.

“Our job as the landmen is to find

out who owns these rights and then if we can take a lease from them so that the company that wants to ex plore and produce those land can have those rights, either through directly purchasing them or leasing them,” Neria said.

The AAPL indicates that they are 12,068 members nationwide, about the same number as in 2011, down from recent peaks in 2013 to 2015 when the count was as high as 21,537. The largest group is in Texas, which had about 48% of the membership in 2021-22 with about 5,483 members. While the group aims to increase its diversity, the vast majority, more than 64% are men.Neria said the recent increases in oil and gas prices and produc tion have increased activity in the Permian Basin in southeast New Mexico and West Texas.

“Currently anyone who can work in the industry is currently work ing,” Neria said. “I think we are do ingNeriawell.”reiterates a sentiment often expressed by people affiliated with the state’s oil and gas industry, that every resident of New Mexico “works for the industry.” That reflects the size of its economic impact. State Sen. William Sharer (R-Farming ton) told a legislative committee in May that the state’s industry was generating about $600,000 a day at that time. Although recent state administrations have worked to di versify the state’s economy, the in come the industry earns and taxes it generates remain essential to the labor market, other businesses, state government and many county and municipal governments.

Neria said the group also looks for other ways to contribute to the com munity such as providing scholar ships for students wanting to pur sue land management or mineral management degrees at colleges or universities. Neria indicated that only about 10 schools have such programs and that students en

rolled at any of those schools are eligible for the funding.

In the past five years, the group has provided about $50,000 in scholarships, according to infor mation provided by an association member in April.

The New Mexico association also hosts an annual golf tourna ment each year to raise scholar ship funds. This year’s tournament occurred May 19 at the Roswell County Club and was called the EJ “Gene” Wentworth Memorial Golf Tournament.In2021and 2022, the associa tion also has served as a corpo rate sponsor of the ENMU-Roswell Foundation golf tournament, do nating $600 a year, which went for college scholarships.

The association also host speak ers at its monthly meetings, usu ally held at Roswell venues. Neria said the speeches are intended to

allow landmen to earn continuing education credits, so they usually cover highly technical subjects.

Lisa Dunlap can be reached at 575-622-7710, ext. 351, or at re porter02@rdrnews.com.

State lease sales still going strong

Permian Basin is already leased (and leases are held by companies as long as they are producing),” KeefeKeefewrote.said that Commissioner of Public Lands Stephanie Garcia Richard has made some changes to the leasing process since taking of fice in 2018.

That includes “setting more ap propriate minimum bids,” requir ing appropriate bonding to cover possible surface damage as a re quirement for leases and conduct ing environmental checks with the agency’s Surface Resources Divi sion before putting a tract up for leasing, Keefe said.

in three weeks what we were doing in a year.”

By contrast, the U.S. Bureau of Land Management has held only one oil and gas lease sale in New Mexico in 2022, with no other planned at this time.

sued, and a judge with the U.S. District Court in Western Louisiana issued an injunction in June 2021 to stay the moratorium, which led to the June 30 lease sale.

By Lisa Dunlap Roswell Daily Record

When it came to oil and gas lease sales in New Mexico in 2022, the action involved state lands, as fed eral lease auctions were slowed by changes in federal priorities and the legal maneuvering that followed.

“The national discussion about federal lease sales hasn’t had a big impact on our lease sales,” Joey Keefe, assistant commissioner of communications for the New Mex ico State Land Office, indicated in anFiscalemail.year

2022 State Land Of fice lease sales from July 1, 2021, to June 30, 2022, totaled $20.73 million. Of that, $94,235 came from Chaves County parcels.

That compares to $12.7 million in rents and bonuses on 132 leases statewide covering 24,099 acres for fiscal year 2021.

The 2022 and 2021 totals are far below what lease sales brought in for fiscal years 2018 and 2019, when rents and bonuses exceeded $108 million each year.

Part of that has to do with fewer tracts available now.

“The reality is that we have less premium leases available to put up because 98% of our land in the

Still, as Assistant Commissioner for Mineral Resources Greg Bloom told state legislators during a Sept. 14 committee meeting in Hobbs, the State Land Office seeks to include as many tracts as possible that are nominated by industry members in their lease sales, as well as putting up tracts selected by staff.

Royalty rates on statewide oil and gas production are at record highs. About 10 years ago, they were capped at 13%. Now a num ber of new leases have the 20% royalty rate, the maximum allowed by the New Mexico State Legisla ture. Richard advocated for raising the maximum royalty rate to 25%, which is the cap in Texas, but that legislation was not passed.

The combination of current roy alty rates, high oil and gas prices, and strong oil production in the basin — now the most productive petroleum field in the United States — has led to soaring royalties. They are estimated for fiscal year 2022 at $2.3 billion, with June royalties ex pected to come in later this month.

That compares to $1.18 billion in fiscal year 2021 and $500 million in fiscal year 2017.

“We have earned $2 billion over the past two years in oil and gas revenue,” Bloom told legislators. “Back in 2000 a $200 million year was a dream. … Now we are doing

“The BLM is continuing to accept expressions of interest but does not have any updates as to future com petitive sales,” BLM Public Affairs Specialist Darren Scott wrote in an email.The June 30 lease sale involved six tracts of almost 536 acres — four in Lea County; one in Dewey County, Oklahoma; and a 321-acre parcel in Chaves County not far from Lake Arthur. The sale earned $632,385.Marshall

& Winston Inc., based in Midland, purchased the Chaves County tract for $610,221.

The slowdown in federal auctions occurred after the Biden Admin istration issued a moratorium in January 2021 on new oil and gas leases on federal property as part of its climate change and environ mental policies. The “pause” was intended to allow the Interior De partment and the Bureau of Land Management to do a comprehensive review of the existing oil and gas leasing program, including assess ing the impact of current activities on the environment and determin ing whether lease and royalty rates wereThirteenappropriate.oil-producing states

When the Interior Department announced that it would allow the New Mexico-Oklahoma lease sale in April 2021, officials said that the parcels had been chosen using new priorities. Tracts were chosen to balance expected oil and gas yields, benefits to U.S. taxpayers and the need to protect natural resources. The sale also was the first to re quire successful bidders to pay a minimum of 18.75% royalties, a rate that in practice had been paid for a while but was not required by federal law.

Now the Biden Administration faces lawsuits from a few directions concerning federal lease sales. In June, two lawsuits filed by envi ronmental groups challenged the resumption of lease auctions. The original lawsuit filed by 13 states also continues in federal court, although the U.S. 5th District Ap peals Court vacated the ruling con cerning the injunction in August.

Lisa Dunlap can be reached at 575-622-7710, ext. 351, or at re porter02@rdrnews.com.

Submitted Photo

Greg Bloom, assistant commissioner for mineral re sources for the New Mexico State Land Office.

Nibert: Midterm elections could be key on energy legislation

By Alex Ross Roswell Daily Record

New Mexico lawmakers will con vene in Santa Fe in January for the 60-day legislative session, and as always energy will be among the topics that will be taken up.

In the state of New Mexico, law makers meet every January — 60 days in odd-numbered years and 30 days in even-numbered years — to authorize spending and craft and debate new laws.

The 2023 Legislative session be gins Jan. 23.

House District 59 state Rep. Greg Nibert, R-Roswell, said what the agenda on energy and the environ ment looks like will hinge on the outcome of the 2021 midterm elec

tions.“Alot

of it may depend on what happens in November,” Nibert said.

Aside from congressional elec tions, all state-wide constitutional offices and each of the 70 seats in the New Mexico House of Represen tatives will be on the ballot.

Currently Democrats have full control of the state government.

Among one of the biggest determi nants will be whether Gov. Michelle Lujan Grisham will be re-elected. Lujan Grisham, a Democrat, faces Republican Mark Ronchetti and Libertarian Karen Bedonie.

Likewise, Democrats hold a 45-24 majority in the House, with Roswell state Rep. Phelps Anderson not cau cusing with either party.

Democrats in recent years in both the executive and legislative branches have placed a high prior ity on curbing emissions, combating climate change and transitioning the state to more renewable sources of energy production.

Nibert said how many seats Re publicans capture will have an ef fect on what committees look like and how far some proposals get.

“If we have more members it will be easier for us to derail it sometime during the process,” said Nibert, who like most Republicans has lined up against the Democratic propos

als on climate change and energy.

One of the big questions will be what to do with the surplus revenue that has come into the state amid record oil and natural gas produc tion.He estimates the state will take in about $2.7 billion more than expect ed and much of lawmakers’ time in the Roundhouse will go toward de ciding what to do with that money.

“There will be the continuing struggle: Do we put it towards in frastructure, do we build new pro grams that have reoccurring obliga tions, do we pass on raises to state employees or whatever. Do we give tax breaks to citizens, what have you — do we do all of the above?” Nibert said.

And while it is still early there are some indictions of what might be on the energy agenda.

In recent years, state Sen. Antoi nette Sedillo Lopez, D-Albuquerque, has introduced a legislation that would pause all fracking operations within New Mexico.

The legislation, known as SB 149, narrowly passed out of the Senate Conservation Committee on a 5-4 vote. However it ultimately did not make it to the floor by the end of the Legislative session.

The proposal would halt the issu ance of all oil and gas licenses for four years that involve hydraulic fracturing, a process meant to ex tract oil and natural gas from shale.

Sedillo Lopez in 2021 said the pause would allow lawmakers and the state to study the potential neg ative impacts fracking could have on the state’s water, land and air. When that pause expires, recom mendations could be made on rules related to fracking.

The temporary ban would effect permits for new oil and gas wells created through hydraulic fracking, and not impact existing permits. It would also allow for oil and gas de velopment overall to continue.

Opponents of fracking say it can have adverse effects on water and air quality and even cause earth quakes.

But Nibert and other critics of a fracking ban say it would have dire consequences for oil and gas pro duction.Henoted that production from shale formations without fracking would be impossible.

“It’s a very tight rock. It does not yield its contents easily whether it be oil, water or gas,” Nibert said.

The fiscal impact report that ac companied Sedillo Lopez’s legisla tion — that in its form at the time would have banned new fracking permits between 2021-2025 — stated that by 2025 oil production would drop by 70% from 2021 levels and natural gas production by 45% below current levels, if no new wells involving fracking were brought on line.Nibert states that oil and gas production makes up 40% of state revenue, so any drop in production would have dramatic consequences for the state’s budget.

“That’s the lifeline for New Mexi co,” he said.

For that reason, Nibert said he does not believe that such a bill will pass.“Idon’t realistically see that cross ing the finish line,” he said.

Nibert said some lawmakers might also want to take action regarding a new state rule meant to curb meth ane emissions.

In April, the New Mexico Envi ronmental Improvement Board ap proved a rule impacting equipment from oil and gas production opera tions to prevent the escape of emis sions from pipelines, valves and otherWhenequipment.therule was approved, a press release from the New Mexico Environmental Department esti mated the new requirements would reduce ozone emissions in New Mex ico each year by 250 million pounds and methane emissions annually by more than 851 million pounds.

The requirements are stricter than those at the federal level and were touted by rule proponents as a way to improve New Mexico’s public health and environment.

Nibert said some operators of wells that produce fewer barrels of oil might end up abandoning the wells because of the high cost of meeting the“Therequirements.problemin New Mexico is we have so many existing wells that have so little production it costs tens of thousands of dollars, maybe $100,000, to retrofit that equipment so that it does not leak methane,” Nibert said.

The industry, he said, does not have a problem with those standards for new wells, but is concerned with the older wells that yield less oil. That could lead to operators prema turely abandoning wells and oil and gas that could be extracted instead being

“Thatwasted.isthe concern from this in dustry that this methane rule had no grandfather clause in for existing wells,” Nibert said.

Other energy-related priorities, he said, could include changing bond requirements, so the state can plug additional abandoned or orphaned wells.

Breaking news reporter Alex Ross can be reached at 575-622-7710, ext. 301, or at breakingnews@rdrnews. com.

Juno Ogle Photo District 59 Rep. Greg Nibert, R-Roswell, speaks at a recent luncheon of the Chaves County Federated Republican Women.

Desk and Derrick Club adapts to changing times

The group also gives out petro leum engineering scholarships each year to students attending New Mexico Tech in Socorro and to Eastern New Mexico UniversityRoswell for students in certifica tion or degree programs that could have applications to the oil and gas industry, such as welding, me chanics, aviation maintenance and commercial driver’s training.

Stacy indicated that the group is likely to consider funding scholar ships for new disciplines related to green energy technologies as the industry as a whole changes.

also receive professional education at regional and national conferenc es. In 2023, the annual conven tion is planned for Albuquerque, with the Roswell club expecting to be one of several clubs to host the event.Inaddition to what the club has provided the community, Stacy said, its members also benefit in several ways by participating.

By Lisa Dunlap Roswell Daily Record

Desk and Derrick Clubs have changed quite a bit since they were created in 1949 with the idea of providing a networking and train ing forum for women in support staff roles in the oil and gas indus try.Now the groups include retired and current professionals in vari ous occupations within the petro leum, energy and allied industries, as well as other interested people, according to Patti Stacy, the sec retary for the Roswell club and a member since 1990.

The nonprofit organizations also consider it important to educate the public as well as their mem bers, she said.

The Association of Desk and Der rick Clubs consists of 42 nonprof it clubs in four different regions across the United States and Can ada. Roswell is one of nine clubs in the West region.

The Roswell club started in 1952, and they now have about 20 mem bers.“We are just an educational club, so we have a lot of educational meetings, seminars, field trips and

things like that to learn about in dustry,” Stacy said. “We have been around a long time. We have a lot of educational opportunities.”

The oil and gas industry presence in Roswell — which once had of fices for some of the major U.S. oil and gas exploration companies — has decreased in recent decades, Stacy said. Club membership has decreased significantly during the past 30 years, she acknowledged, due not only to changes in the in dustry but to the coronavirus pan demic and the retirements, reloca tions and job changes that caused.

Still, Stacy described an active membership that works on its ed ucational mission in several ways.

The Roswell club meets monthly, the second Tuesday every month at the office of a local oil and gas company, with guest speakers on various topics from “drilling wells to the office accounting and things like that.” Members of the general public can attend, Stacy said.

The group also invites speakers to talk about industry-related top ics for an industry appreciation banquet for local members. The banquet hasn’t occurred for a few years, with the next one expected in 2023.

In 2021, the club donated three scholarships for $1,000 each to New Mexico Tech, Stacy said. At ENMU-Roswell, the club donat ed $21,778 in 2017 and $500 in 2018, according to ENMU-Roswell officials.

Desk and Derrick Club members

“I’ve learned a lot about the oil and gas industry itself,” Stacy said. “Just having that leader ship and that confidence and that knowledge and the camaraderie of everybody in the industry has just helped me tremendously over the years.”

Lisa Dunlap can be reached at 575-622-7710, ext. 351, or at re porter02@rdrnews.com.

Submitted Photo

Members of the 2022 board of directors of the Roswell Desk and Derrick Club are, from left, Cynthia Garrison, director; Jane Andrus, director; Jan Starnes, vice president; Patti Stacy, secretary; Lori Gomez, president; Ellie Gallagher, immediate past-president; Anna Carreon, treasurer; and Lydia Lara, director.

Shell CEO to step down as oil giant looks to climate goals

The Associated Press

LONDON (AP) — Shell CEO Ben van Beurden is stepping down at the end of 2022 after nine years in charge, the energy giant said Thursday, a change that comes as oil and natu ral gas companies are under pressure to shift away from fossil fuels even as they see soaring profits from energy prices driven up by Rus sia’s war in Ukraine.

Taking over Jan. 1 is Wael Sawan, a LebaneseCanadian who has worked for Shell for 25 years and is now director of integrated gas, renewables and energy solutions. The choice sig nals the focus of the Lon don-based company to take what it calls a leading role in the energy transition de spite facing criticism that it’s been slow to reduce cli mate-changing emissions.

“I’m looking forward to channeling the pioneering spirit and passion of our incredible people to rise to the immense challenges, and grasp the opportuni ties presented by the ener gy transition,” said Sawan, who has been a member of Shell’s executive committee for three years.

He takes over at a tumul tuous time for Shell and other oil and gas giants. While the world is looking to transition to renewable sources like wind and so lar, the war in Ukraine has created volatility that has driven up energy prices and fueled inflation.

Natural gas prices have soared as Russia has curbed supplies to Eu

rope, where an energy cri sis is forcing governments to institute conservation measures and go back to coal and oil despite climate goals to ensure the lights stay on this winter.

Volatile oil prices soared above $120 per barrel in June, pushing gasoline prices at the pump to re cord highs in the United States. Crude has since fallen below $90.

That has translated to record profits for energy companies at a time when households and businesses are getting stung by rising costs. Some European gov ernments have approved taxes on excess profits of energy companies to help households and busi nesses, and the European Union’s executive Commis sion proposed Wednesday a similar levy on electric ity producers across the 27-nation bloc.

In late July, Shell posted record profits of $11.5 bil lion for a second straight quarter. That was up from $5.5 billion in the same three-month period last year, despite a hit worth billions from pulling out of Russia over the invasion of Ukraine.EllenWald, the founder of energy consulting firm Transversal Consulting, notes that prior to head ing natural gas and renew ables, the incoming CEO was involved in the compa ny’s upstream operations.

Despite efforts by Shell to shift toward more renew ables, the company still makes most of its money

selling and trading crude oil, Wald said.

“It’s not like he’s just a renewable guy,” Wald said. “He’s still an oil and gas person, but I do think the fact that he was in this (re newables) division before moving to CEO shows how integral they see this to the future of the company.”

Shell Chairman, Sir An drew Mackenzie, called Sawan “an exceptional leader, with all the qualities needed to drive Shell safely and profitably through its next phase of transition andSophiegrowth.”Lund-Yates, a lead equity analyst at Har greaves Lansdown, an in vestment services firm, called Sawan’s appoint ment “a clear marker” that Shell intends to make its renewable strategy clearer,

even if “change won’t hap pen overnight.” He “won’t be ignorant to the fact oil prices can collapse at short notice” and that is “all but guaranteed to be something he’ll have to navigate,” Lund-Yates added.

Formerly known as Dutch Royal Shell, the company late last year left the Neth erlands and consolidated its headquarters in Lon don as it simplified its ar chaic corporate structure. Shell has resisted pressure to break itself up, with one company focused on re newable energy and the other on legacy fossil fuels, as other firms have done.

It has a goal of reaching net-zero carbon emissions by 2050 by investing in re newable energy, restoring forests and taking other steps but has been accused

of moving too slowly.

Last year, the Hague Dis trict Court ordered Shell to cut carbon emissions 45% by 2030, saying the compa ny’s net-zero target “is not concrete, has many caveats and is based on monitoring social developments rather than the company’s own re sponsibility for achieving a CO2

“It’sreduction.”atrickyposition for these European legacy en ergy companies because they face an immense amount of pressure to ba sically get out of their core business, and yet there’s still demand for their core products—a lot of demand for it,” Wald said.

AP Photo

CEO of Royal Dutch Shell Ben van Beurden is stepping down at the end of the year after nine years in charge and will be replaced by Wael Sawan, the company announced Sept. 15.

Group supports US energy workers

By Alex Ross Roswell Daily Record

As the extractive industries and energy development have become more politically charged, one organi zation is working to ensure the con cerns of the fossil fuel producers and the workers they employ are heard.

“Anywhere there is the influence of the American energy worker, we are there to work on the conversation the best we can,” said Larry Beh rens, western Regional director for Power the Future.

Based in Virginia, Power the Fu ture is an issue advocacy organiza tion that seeks to influence the nar rative on the debates over regulation and energy development, while de bunking what it considers the de monization of the industry, and pointing out what it believes are the consequences of an over-reliance on green energy.

“We share facts, we work with me dia, we work with policy holders to bring light to energy issues at the state level, the national level, and if I am being honest, increasingly at the international level,” Behrens said.

In recent years Power the Future and its spokespeople have sought to accomplish this through a consis tent online presence with its website and social media channels.

They have compiled data to high light the contributions of the oil, coal and natural gas industries and push back against what it sees as heavy government regulation and the vili fication of the fossil fuel and extrac tive industries.

The message has been amplified through appearances on Fox News and other media as well as opinion pieces in print and web-based me dia.Power the Future also tries to high light the contributions the extractive and fossil fuels industries make — to state and local economies and a steady energy supply — as well as the workers who make a living in those sectors.

“I would like to think we are a voice that is appreciated by those

who are, you know, sustaining New Mexico. I am talking about the oil, natural gas and coal workers in our state,” Behrens said.

According to its website, Power the Future is financed through dona tions from private citizens and not corporations or businesses. Howev er the group does not have to legally disclose the names of its donors to thePowerpublic.the Future was founded in 2018 by Daniel Turner. Turner, the group’s executive director, had worked in government as well as on a number of Republican political campaigns and for several conserva tive nonprofit groups.

Behrens said Turner was inspired to launch the organization during the debate over construction of the controversial Key Stone XL Pipeline, where Turner felt national environ mental groups opposed to the pipe line were overshadowing the voices of the people who worked on those projects, the energy industry and the communities that would ben efit from the jobs and tax revenue pipeline proponents said the project would have created.

“So we looked at that paradigm that seemed to happen in the media an awful lot and said, how can we change that,” Behrens said.

On the group’s website there are posts that decry the Green New Deal, a document crafted by some progressive members of Congress that seeks to eventually transition the nation away from a fossil fuel economy to one that relies on green energy.Other posts criticize subsidies for electric cars, and claim that an over reliance on renewables and strin gent regulations of the oil and gas industry could lead to spikes in en ergy prices and rolling blackouts.

“There is a war on dependable en ergy,” he said.

Power the Future on its website blames what it sees as burdensome environmental regulations for ev erything from high gas prices to the prospect of resource scarcity.

And in its messaging it paints

the renewable energy industry as out of touch, ineffective and politi cally driven, and the move toward it as something that will have conse quences for consumers and energy workers.Inaddition to it emphasis on na tional issues, Power the Future also seeks to weigh in on energy debates within individual states with either large natural resource reserves or tough regulations placed on energy development.NewMexico is one of those states, a microcosm of all the debates and issues related to energy.

According to the New Mexico Oil and Gas Association, the Land of Enchantment is the second larg est oil producing state, trailing only neighboring Texas, and is seventh in natural gas production.

The New Mexico Department of Workforce Solutions reported in De cember 2021 New Mexico produced nearly 1.4 million barrels of crude oil a day, an amount equivalent to 11.8% of all crude oil in the United States, and also produced 5.8% of the country’s natural gas.

For the state that capacity has been a valuable source of jobs and government revenue.

According to the Department of Workforce Solutions in 2020, those

in the oil and gas extraction indus tries earned an average weekly sal ary of $2,233 a week. For those in industries that support mining it was $1,361 a week.

That is more than twice the state wide weekly average salary in New Mexico of $968 in all other indus tries.New Mexico’s vast stretches of public lands have also been a draw for the extractive industry.

But like so many other states and countries, New Mexico has sought to move toward getting more electricity and energy from renewable sources, including wind and solar.

According to the U.S. Energy In formation Administration in 2021, renewables provided the largest share of electricity generated in the state, about 37%, more than double the amount provided in 2017.

The transition is aided by the state’s steady supply of sunshine, wind and geothermal potential, along with government spending andOneregulation.ofthosemoves toward renew able energy is the plan to shutter coal-fired power plants. One of those is the San Juan Generating Station located between Farmington and Shiprock.

The plant was slated to go offline

AP Photo/Charlie Riedel, File

In this April 24, 2015, photo, pumpjacks work in a field near Lovington.

in this summer, as part of the En ergy Transition Act. That deadline though was pushed back.

The Energy Transition Act was signed into law by Gov. Michelle Lujan Grisham in 2019. It seeks to move New Mexico toward having 100% of its electricity generation come from carbon-free sources.

Lujan Grisham and proponents of the act say it is an ambitious plan that will reduce the state’s carbon footprint and make it a leader in the arena of renewable energy.

Behrens though says it is a move that will lead to higher energy prices and retire a plant that for decades has been a dependable source of affordable electricity for many New Mexicans. And he said it will mean the loss of jobs.

“These are good jobs, these are people who live on the land where they work, so they take care of the land and yet they are under as sault,” Behrens said.

According to the fiscal impact statement attached to the Energy Transition Act, the legislation cre ates state funds for job retraining and to address other negative im pacts of coal power plant closures.

Behrens said the situation is a clear example of what his group is attempting to highlight.

“It’s those workers we stand up for because they are political footballs to Santa Fe. They are not seen as people, they are not seen as some one providing a critical service,” he said.Power the Future has criticized rules meant to curb emissions and limit the output of carbon as some thing enforced by government on people.Those include the state Environ mental Improvement Board’s vote in May to adopt California’s Clean Car Rule on stricter emission standards for New AccordingMexico.toa press release from the New Mexico Environment De partment, the rule will reduce green house gas emissions and smog from new passenger cars, trucks and SUVs beginning in model year 2026.

The release states the rule will eliminate 130,000 tons of green house gases and 1,700 tons of ozone pollution by 2050.

Other states have also adopted the rule. Up until last year, state law did not allow New Mexico to adopt emis sion standards that are more strin gent than those set by the federal government.Behrensportrays the rule as what he describes as, “a larger attack on the way of life of New Mexicans.”

“What we see is another state mak ing rules for New Mexico, which may not fit New Mexico,” he said.

He argues that standards should be driven not by government, but by the industries that must abide by them and human behavior.

Behrens also says the rule was en acted not by elected lawmakers, but by the Environmental Improvement Board, an unelected body.

Should the standards be adopted at all, it’s a decision, Behrens said, that should be made by the Legis lature.Power the Future does not offer on its website a definitive, clear posi tion on climate change, but Behrens argues the industry can police it self when it comes to environmental standards and has the motivation to do“Theyso. live in New Mexico, they work in New Mexico, their children go to school in New Mexico, so they are heavily invested in the future of New Mexico,” he said.

Private industry through volun tary actions and advances in tech nology should be the driving force on solutions related to climate change, not government acts, he said.

However, Behrens said he believes that government can play a role in preserving the environment, as long as it does so in partnership with in dustry rather than imposing rules that burden it.

“There is an opportunity that the state often overlooks of reaching out to these workers, these men and women who do the job and say, ‘you know what? We share this common goal, what would be the best way to go about it,’” he said.

Breaking news reporter Alex Ross can be reached at 575-622-7710, ext. 301, or at breakingnews@rdrnews. com.

IPANM executive director describes group’s role

vocated for the change, said that it would reduce ozone-precursor pollutants by about 260 million pounds a year and methane emis sions by 851 pounds annually.

Winchester said in a statement announcing the appeal that the ad opted version of the rule will “force operators to plug still-productive wells and will inflict economic hard ship on New Mexicans with little to no gain for the environment.”

In a recent email, he wrote that fighting the precursor rule is part of the association’s work to “de fend industry against shortsighted and overly burdensome regulatory policies, including new rules that disproportionately impact small producers who are the backbone of New Mexico’s oil and gas industry.“

fund public safety departments and programs. He also said that pro tecting the industry’s future means protecting the air, landscapes and wildlife in New Mexico.

He noted that the association and its stakeholders are working now ahead of the 2023 state legislative session to determine “potential leg islation that will encourage more safe, responsible production in New Mexico and eliminate duplicative, unnecessary regulations currently in place at the state level.”

The association also works to en courage students to pursue careers in the oil and gas industry. That effort includes an annual event at New Mexico Tech in Socorro.

By Lisa Dunlap Roswell Daily Record

A strong advocate for the oil and gas industry in New Mexico, the In dependent Petroleum Association of New Mexico (IPANM) has its ad ministrative offices in Roswell.

The membership and efforts of the group, however, are statewide.

Executive Director Jim Win chester said that group, which was formed in 1978, represents about 350 independent oil and gas pro ducers in the state and that it works in a number of ways to “promote, protect and defend” their work “so that safe, responsible oil and gas production leads to cheap, afford able energy while providing record state revenue to improve all walks of life in New Mexico.”

Winchester indicated that the state is now the second largest oil producer in the U.S., after Texas, and that independent producers and the association play a critical role in protecting “growing produc tion to ensure domestic security, which will help lower gas prices and reel in the rampant inflation that is hurting everyday Americans.”

Two major efforts of the group at the current time are to push for

a resumption of oil and gas lease sales on federal property and to continue its legal appeal of the New Mexico’s new ozone precursor rule.

The Biden Administration placed a moratorium on new lease sales on federal lands and water in Janu ary 2021, with the intent of exam ining the federal oil and gas lease program, including current oil and gas effects on the environment and public health and whether lease rates and royalties are appropriate. Several lawsuits have been filed by both environmental groups want ing the moratorium to continue and 13 oil-producing states want ing lease sales to resume. Only one federal lease sale has occurred in 2022 in New Mexico. Most recently a U.S. 5th District Court of Appeals vacated a lower court’s injunction against the Winchestermoratorium.characterized the moratorium on lease auctions as illegal and said it is part of the fed eral government’s “overall war on domestic oil and gas.”

The Ozone Precursor Pollutants Rule took effect in New Mexico on Aug. 5, with IPANM filing its appeal in the New Mexico Court of Appeals thatGov.night.Michelle Lujan, who had ad

Winchester wrote that the indus try is an essential source of reve nues for the state, providing funds to hire and pay teachers, support schools and higher education and

Lisa Dunlap can be reached at 575-622-7710, ext. 351, or at re porter02@rdrnews.com.

Submitted Photo

Jim Winchester, executive director of the Independent Petroleum Association of New Mexico, speaks March 10 at a Roswell Rotary Club event.

Climate bill’s unlikely beneficiary: US oil and gas industry

By MATTHEW BROWN and MICHAEL PHILLIS The Associated Press

BILLINGS, Mont. (AP) — The U.S. oil industry hit a legal roadblock in January when a judge struck down a $192 million oil and natural gas lease sale in the Gulf of Mexico over future global warming emissions from burning the fuels. It came at a pivotal time for Chevron, Exxon and other industry players: the Biden administration had curtailed opportunities for new offshore drill ing, while raising climate change concerns.Theindustry’s setback was shortlived, however. The climate measure President Joe Biden signed Aug. 16 bypasses the administration’s con cerns about emissions and guar antees new drilling opportunities in the Gulf of Mexico and Alaska. The legislation was crafted to se cure backing from a top recipient of oil and gas donations, Democratic Sen. Joe Manchin, and was shaped in part by industry lobbyists.

While the Inflation Reduction Act concentrates on clean energy in centives that could drastically re duce overall U.S. emissions, it also buoys oil and gas interests by man dating leasing of vast areas of pub lic lands and off the nation’s coasts. And it locks renewables and fossil fuels together: If the Biden admin istration wants solar and wind on public lands, it must offer new oil and gas leases first.

As a result, U.S. oil and gas pro duction and emissions from burn ing fuels could keep growing, ac cording to some industry analysts and climate experts. With domestic demand sliding, that means more fossil fuels exported to growing for eign markets, including from the Gulf where pollution from oil and gas activity plagues many poor and minority communities.

To the industry, the new law sig nals Democrats are willing to work with them and to abandon the no tion fossil fuels could soon be ren dered obsolete, said Andrew Gillick

with Enverus, an energy analytics company whose data is used by in dustry and government agencies.

“The folks that think oil and gas will be gone in 10 years may not be thinking through what this means,” Gillick said. “Both supply and demand will increase over the nextThedecade.”resultwould be more planetwarming carbon dioxide — up to 110 million tons (100 million met ric tons) annually — from U.S.produced oil and gas by 2030, with most coming from fuel burned after export, according to some econo mists and analysts.

A Department of Energy analysis obtained by The Associated Press Thursday said the law’s leasing provisions “may lead to some in crease” in carbon pollution, but that other provisions would cut 35 tons of greenhouse gas for every new ton of fossil fuel pollution.

The law reinstates within 30 days the 2,700-square miles (6,950-square kilometers) of Gulf leases that had been withheld. It ensures companies like Chevron will have the chance to expand and

overrides the concerns of U.S. Dis trict Judge Rudolph Contreras that the government was “barreling fullsteam ahead” without adequately considering global emission in creases.Themeasure’s importance was underscored by Chevron executives during a recent earnings call, where they predicted continued growth in the Gulf and tied that directly to being able “to lease and acquire ad ditional acreage.”

The fossil fuel industry’s ambi tions are now directly linked to wind

and solar development: The bill prohibits leasing of federal lands and waters for renewable energy unless the government has offered at least 2 million acres (810,000 hectares) of public land and 60 mil lion acres (24 million hectares) in federal waters for oil and gas leas ing during the prior year. The law does not require leases to be sold, only offered for sale.

The measure’s critics say that’s holding renewables hostage unless the fossil fuel industry gets its way. Some accuse Biden and Democrats

AP Photo/Eric Gay, File

A man wears a face mark as he fishes near docked oil drilling platforms, on May 8, 2020, in Port Aransas, Texas.

of abandoning pledges to confront the“It’sindustry.10more years of mandatory leases,” said Brett Hartl with the Center for Biological Diversity. “We will do our damnedest but it’s hard to fight them all.”

Communities near polluting in dustrial plants will continue to suf fer if the oil and gas industry re mains vibrant, said Beverly Wright, executive director of the Deep South Center for Environmental Justice and a member of the White House Environmental Justice Advi sory Council. She worries that in centives in the law for technology that captures carbon from indus trial processes could also perpetu ate harm to these poor, mostly mi nority residents.

In Louisiana’s St. James Parish, where petrochemical plants domi nate the landscape, environmental justice activist Sharon Lavigne said the legislation will allow pollution from fossil fuels to keep harming her“That’scommunity.justlike saying they’re go ing to continue to poison us, going to continue to cause us cancer,” said Lavigne, a former high school teacher who founded the group Ris ing St. James.

The leasing provisions mark a fail ure in efforts by environmentalists and social justice advocates to im pose a nationwide leasing ban. The movement’s high point came when Biden followed campaign pledges to end new drilling on federal lands with an order his first week in of fice suspending lease sales.

U.S. District Judge Terry Doughty in Lake Charles, Louisiana blocked

2022 Oil & Gas

Biden’s order nationwide last year.

A federal appeals court Wednes day struck down Doughty’s ruling, then Thursday he issued a new in junction saying lease sales can’t be stopped in the 13 states that op posed Biden’s policy.

A stream of potential drilling sites is crucial for companies to main tain future production because wells can take years to develop and some yield nothing, said Jim Noe, an industry lobbyist who worked with Senate staff on the climate bill’s leasing provisions.

“The industry is in constant need — almost like a treadmill — of lease sales,” said Noe, an attorney at Hol land & Knight who represented off shore oil and gas companies. Noe said demand for oil and gas won’t decline immediately and Gulf drill ing brings jobs and more energy se curity.AUnited

Nations report before Biden took office warned that the U.S. and other nations need to sharply decrease investments in oil, gas and coal to keep tempera tures from rising more than 1.5 de grees Celsius (2.7 degrees Fahren heit) since pre-industrial times.

Other bill provisions that focus on renewable energy and captur ing carbon dioxide from industrial plants would result in net emission reductions 10 to 50 times greater than emission increases from burn ing more oil and gas, analysts say.

The increase in oil and gas emis sions still could be substantial — as much as 77 million to 110 mil lion tons (70 to 100 million metric tons) of additional carbon dioxide annually by 2030 from new leasing,

according to economist Brian Prest with the research group Resources for the OtherFuture.experts had lower projec tions: The San Francisco-based climate research group Energy In novation predicted up to 55 million tons (50 million metric tons) of ad ditional carbon dioxide annually from new leasing. Researchers from Princeton and Dartmouth said the impact could be negligible or as much as 22 million tons (20 million metric tons) in the U.S., plus much more abroad.

Any increase hinges on global oil and natural gas prices staying high — and that in turn depends on a range of factors including the on going war in Ukraine, said Robbie Orvis with Energy Innovation.

“It may increase oil and gas pro duction somewhat, but that is very much offset by all of the other piec es of the bill,” Orvis said.

Yet there’s uncertainty about how quickly other pieces of the bill could bring emission cuts. Wind and so lar construction could run into the supply chain problems hindering

many economic sectors. And tech nology to capture and store carbon dioxide is still being refined and is in limited use.

Other provisions could make it potentially more expensive to drill on public lands and waters. There are modest increases in royalty and rental rates and a new $5-per-acre fee when companies want particu lar parcels offered for lease. An other fee would require companies to pay for natural gas, or methane, that enters the atmosphere as a po tent greenhouse gas.

The higher costs could dampen interest among companies, said Mark Squillace, a natural resourc es law professor at University of Colorado Law School.

“Even though the industry is go ing to be getting more oil and gas leasing if they want it, it’s an inter esting question: Do they want it?” Squillace asked.