FARMINGTON — Farmington City Council on Tuesday amended and unanimously approved a resolution supporting the oil and gas industry, but Mayor Tommy Roberts said a clause included in the document is problematic.
The resolution supports proposed state legislation that would cut oil and gas drilling royalties to cities and counties that pass laws or regulations banning or "severely" restricting the industry.
Those oil and gas royalties are severance tax bond proceeds. New Mexico collects taxes on oil, gas and other natural resources extracted from the earth. These are called "severance taxes," and they repay severance tax bonds, which are issued for state-wide projects.
"That 'severely restrict' standard is very subjective," Roberts said in the meeting, adding that he prefers that the resolution only target governments that enact prohibitions of oil and gas drilling.
But Roberts didn't lobby to remove the phrase because the purpose of the resolution is to send a message, he said. The details of the proposed legislation the resolution supports can be determined when those laws are drafted, he said.
"I don't think anybody who would look at this resolution and be supportive of it would take the position that reasonable regulation of the industry should be weakened," he said.
Opponents of the resolution have expressed concern with its wording, too. Eric Jantz, a New Mexico Environmental Law Center staff attorney, has said he thinks the document supports bills that would allow the state to cut royalties to counties that create any oil and gas regulations. Jantz is representing Mora County in federal court. The county late last year banned oil and gas development, and several lawsuits have been filed against it.
But, Roberts said, a community with oil and natural gas resources that bans or severely restricts the oil and gas industry should not receive money from a state fund fueled by the industry.
Communities can regulate the oil and gas industry, he said, but he suspects Mora County's ordinance banning the industry will ultimately be ruled illegal.
Environmentalists and Mora County officials say Farmington's resolution is overreaching, and Matt Dodson, Robert's mayoral opponent, agrees.
"It's blackmailing a county to do what the oil and gas corporations want you to do," he said. "Otherwise, you don't get any funding."
The resolution gives oil and gas corporations more power, he said.
Mora County has a good reason for banning oil and gas exploration, Dodson said. The chemicals included in hydraulic fracturing are proprietary information, and counties and cities do not know if they are hazardous, he said.
"Until we know exactly what's in the chemicals, I would not criticize these counties for (banning or restricting the oil and gas industry)," he said.