Fracking permit ban clears a hurdle; personal pot production limits debated

Opponents say bill would sink budget

SANTA FE — A proposal for New Mexico to stop issuing new fracking permits over the next four years began moving through the Senate on Saturday.

But the legislation, Senate Bill 149, still faces a long path to final approval.

It passed the Senate Conservation Committee on a 5-4 vote Saturday but must clear at least two more committees before reaching the full Senate for consideration, no easy task as the 60-day legislative session approaches its midpoint. The bill would also have to make it through the House before reaching the governor’s desk.

One supporter of the legislation — Democratic Sen. Liz Stefanics of Cerrillos, who cast the deciding vote — expressed mixed feelings about the proposal. She broached the idea of amending the bill in a future committee to require a study of fracking impacts rather than a halt to new permits, given the potential damage to state revenue.

The pause on new permits would cost New Mexico about $1.7 billion to $3.8 billion a year in lost revenue through 2025, according to an analysis by the Legislature’s chief economist. The estimates included impacts on both state and local governments.

Sen. Antoinette Sedillo Lopez, an Albuquerque Democrat and co-sponsor of the bill, disputed the financial analysis and urged her colleagues to support the fouryear halt to new permits.

“New Mexico should be open for business, not open for exploitation,” Sedillo Lopez said. “Unfortunately, with this industry, we’ve been exploited.”

The bill, she said, already calls for reporting requirements that would direct state agencies to evaluate the health and environmental impacts of hydraulic fracturing in oil and gas extraction. The pause on permits, Sedillo Lopez said, is necessary to add urgency to the effort.

The measure drew divided public testimony during a 90-minute hearing Saturday. Supporters described it as a key step toward addressing climate change and improving public health, especially in communities where wells are located.

Opposition centered on the financial impact to the state and how legislators would come up with the revenue to operate public schools and offer other state services during a moratorium. They estimated it would cost the state 25% to 33% of its annual revenue.

“I don’t know if you understand totally how much New Mexico depends on fracking, and the oil and gas industry,” Sen. David Gallegos, R-Eunice, said during the debate. “They do so much for our communities, our schools and our children.”

Sen. Joseph Cervantes, D-Las Cruces, joined the committee’s three Republicans in voting against the bill, which is similar to a 2019 proposal. It would be irresponsible, he said, to ignore the financial analysis without a plan to keep the budget balanced.

Cervantes said he supports some goals of the legislation — such as diversifying state revenue sources — but that it would be unfair to make another Senate committee do the “dirty work” of confronting the financial consequences.

“We all share those goals,” he said, “but ultimately, we’re the adults in the room.”

Opposition by Cervantes could be key, as he is chairman of the Senate Judiciary Committee, the next stop for the bill. If approved there, it would move to the Senate Finance Committee.

New Mexico is one of the top oilproducing states in the country, and more than 40% of the state’s general fund revenue comes from the oil and natural gas industries.