New Mexico senators' proposed bill could increase fines on oil and gas companies
Bill gives more power to regulator department when assessing penalties, calls for annual reports
State lawmakers are looking to crack down on oil and gas operators in violation of state law, after 2018 brought a $2 billion surplus in state funding mostly from oil and gas tax revenue.
Senate Bill 186, sponsored by Sen. Richard Martinez (D-5) and Rep. Matthew McQueen (D-50), was intended to increase penalties assessed by the Oil Conservation Division (OCD) – an arm of the State’s Energy, Minerals and Natural Resources Department (EMNRD) – against operators in violation of the law.
The law provides for higher civil and criminal penalties under the Oil and Gas Act.
SB 186 was referred to the Senate Conservation Committee at the start of the ongoing 60-day legislative session.
If enacted, the bill would go into effect on July 1, 2019.
Here are three main takeaways from SB 186.
When it is found that an operator or any person is violating state law or any provision in the Oil and Gas Act, or a permit issued by EMNRD, the Department, under SB 186, can file a lawsuit against the violators for penalties.
The bill proposes raising the cap on penalties from $1,000 to $15,000 for each day of violation.
Failure to comply with such an order could result in a civil penalty up to $25,000.
A civil suit can also be used to recover the previous penalties.
Anyone who knowingly violates the Oil and Gas Act is guilty of a third-degree felony, read the bill.
Each day a facility is in violation constitutes a separate offense.
The Department would issue a notice to the alleged violators, call a public hearing and issue a compliance order, specifying the nature of the violation and how compliance is to be achieved.
A compliance order could also suspend or terminate a violated permit.
The bill would establish an Oct. 1 annual deadline for EMNRD to file a report to the Legislature and governor on the number of violations investigated, the total amount of penalties imposed, information on the violators themselves and the reasons for penalties.
Such a report would also be made available to the public.
Oil Conservation Commission
If passed, the bill would give more power to the “Oil Conservation Commission” made up of designees of the commissioner of public lands, cabinet secretary of EMNRD, and director of the OCD.
The commission is vested with powers allowing it to investigate any potential violations of the Oil and Gas Act or any other state laws related to oil and gas conservation.
The New Mexico attorney general serves as the commission’s attorney.
Terms on the commission run concurrent with the members’ terms of office.
“The designees of the commissioner of public lands and the secretary of energy, minerals and natural resources shall be persons who have expertise in the regulation of petroleum production by virtue of education or training,” read the bill.
Adrian Hedden can be reached at 575-628-5516, firstname.lastname@example.org or @AdrianHedden on Twitter.