Senate Bill 149 Fiscal Impact Report May Not Paint A Complete Picture

This was published in the Rio Rancho Observer March 6, 2021 

the Bill is currently being obstructed by Senator Cervantes In Judiciary. He believes a biased.FIR.

Senate Bill 149 Fiscal Impact Report May Not Paint A Complete Picture

SB 149 passage through the Senate Conservation Committee on February 13th shows there is a growing call to action to address fracking’s climate impacts, as well as impacts and harms to New Mexican communities nearest to fracking sites. This critical bill asks for a necessary assessment of fracking’s impacts on our limited water resources, consequences to agriculture and other industries that could experience adverse long-term consequences caused by fracking. Currently, those long-term costs to our environment are not fully understood.

Questions about the impacts of fracking have not been answered or explored by New Mexico legislators, state agency, or even the Governor. For example, if fracking sites are close to schools, are the children safe? How much water is New Mexico actually making disappear because of fracking operations? What percent of our state’s water is lost, and what are the future water projections? Senate Bill 149 is the only reasonable solution to address our state's environmental and health crisis caused by fracking. 

According to the State Land Office 1,045 licenses have been stockpiled by the industry. The FIR also fails to consider these 1,045 existing fracking licenses, while claiming that SB 149 would result in a budget deficit of 2022 (1,424.6) to over 2025 $(3,126.1) over the next 4 years. This means that fracking will continue, even while new licenses are paused over the next 4 years.

Food & Water Watch, on the other hand, conducted an analysis of the New Mexico Environment Department (NMED)’s permit glut showing that SB 149 halts the issuance of new permits, but does not impact existing permits and leases on state and private lands. This analysis determined that the FIR based its revenue estimates on an assumption that volumes of oil and gas from existing wells would decline and would not be replaced.

Additionally, the LFC lists costs associated with this bill as “recurring” despite acknowledging that the bill is repealed in 2025. There’s no articulation of why the bill would cause declines in permitting or production after 2025 or why the stockpile of permits were not included.

Lastly, NNMED receives approximately $2.2 million annually in revenue from permit fees that would likely be affected.

In 2020 alone, the permit glut grew to more than 2,400 as state regulators approved 5 times as many permits as the number of wells drilled. 81 percent of unused permits are on federal lands (versus 13 percent on state and 5 percent private land).

While the vast majority of new wells in the Permian Basin are hydraulically fracked, this does not mean that all oil and gas production in the state requires hydraulic fracturing. It’s possible for producers to shift to conventionally accessible resources in the short-term.

The FIR SB149 lacks crucial information that sabotages a modest bill like SB 149. Votes in committee appear to be influenced by an FIR that does not contain a complete financial picture, and by oil and gas campaign contributions.