A large amount of extra revenue awaits Eddy County government based on tax collections for May of 2024, according to the Eddy County Finance Department.

The County collected $7.2 million in oil and gas tax revenue collections in May based on business activity conducted by oil and gas operators in February, said Eddy County Finance Director Breanna Shields.

She said more than 23 million barrels of oil were produced in Eddy County and the West Texas Intermediate (WTI) Sweet Crude Oil price was around $75 a barrel.

WTI is considered the U.S. benchmark for oil prices, noted the Charles Schwab investment website.

When the 2024 fiscal year budget was written last year, Eddy County projected final oil and gas tax collections at $52 million.

Through May the County collected $97 million in oil and gas revenues for fiscal year 2024.

At the end of the 2023 fiscal year Eddy County collected $113 million in oil and gas taxes, read Eddy County Finance records.

June’s figures have yet to be released and will reflect March oil and gas production in Eddy County.

WTI prices in March varied from $78.53 to $84.39 per barrel, per information from the U.S. Energy Information Administration (EIA).

Fiscal years in Eddy County start on July 1 and end June 30.

Through May, the County’s unemployment rate was under 3%, according to data from the New Mexico Department of Workforce Solutions (NMDWS).

NMDWS defined oil and gas operations as part of mining extraction in New Mexico. Through March Eddy County had 284 fossil fuel operations with 5,903 employees, per state figures.

The average weekly wage for Eddy County’s mining industry was $1,977, noted NMDWS.

The EIA predicted crude oil production in the Permian Basin to average around 6.3 million barrels per day in 2024, an increase of nearly 8% from 2023, read a June 11 news release from the federal agency.

The Permian Basin accounts for nearly half of U.S. crude oil production and EIA expected increased production in the Permian and other regions to drive production to successive records in 2024 and 2025, according to the release.

EIA expanded its Short-Term Energy Outlook (STEO) forecasts to include regional trends in the primary oil and natural gas production regions in the United States—Appalachia, Bakken, Eagle Ford, Haynesville, and Permian.

“Incorporating regional forecasts of oil and natural gas production helps us tell a more comprehensive story of hydrocarbon production trends in the United States,” said EIA Administrator Joe DeCarolis in the news release. “Now our forecasts clearly show the important regional relationship of oil and natural gas production.”

Sales tax collections exceed 2023

Eddy County broke gross receipts tax (GRTs) collections from the previous fiscal through May, Shields said.

The County collected $5.8 million in GRTs for May of 2024 with a total of $62 million total in sales tax revenue, noted Eddy County Financial Department records.

Shields said May’s figures were more than $10 million collected for the same time frame in 2023. Eddy County budgeted $34 million in collected GRTs at the end of June 2024.

Tax collections varied throughout the year between $5 million and $6 million, read county financial statements.

More than half the oil and gas facilities recently inspected in the Permian Basin were likely in violation of state and federal air pollution rules after a joint operation by the New Mexico Environment Department (NMED) and the Environmental Protection Agency.

Seventy-five of the 114 sites inspected were likely in violation of volatile organic compound (VOC) regulations, the NMED said, and could face fines under the Clean Air and Air Quality Control acts.

Fourteen EPA inspectors and five from NMED used satellite imagery, regulatory reports and other data, along with onsite inspections at oil and gas sites throughout the region.

The study inspected Earthstone Energy, Franklin Mountain Energy, Kaiser Francis Oil Company, Marathon, Permian Resources, Tap Rock and XTO Energy Inc. About 112 of the facilities were in communities with “environmental justice” concerns, the report read, due to higher levels of ozone pollution.

President of the New Mexico Oil and Gas Association Missi Currier said the findings of the state and federal government did not represent the industry as a whole, which she said largely followed environmental policies.

“Our members make every effort to comply with federal and state regulations to help protect the communities in which we operate,” Currier said. “While we recognize the effort undertaken, the findings were based on a small sample of operations in the state. Our members are dedicated to correcting mistakes when they do occur and continuing to work with regulators.” VOCs create ground-level ozone, or smog, when interacting with sunlight. State action to limit air pollution began after reports the region was in violation of federal air quality standards.

Meanwhile, the EPA was considering listing the entire basin, in Texas and New Mexico, in violation or “non-attainment” of the National Ambient Air Quality Standard (NAAQS) for ozone, an act that could restrict further federal approvals for oil and gas activities.

New Mexico’s Environmental Crimes Task Force would investigate and potentially prosecute any criminal violations.

NMED Cabinet Secretary James Kenney said the State would likely increase fees and fines charged to the industry to make up for what he said the department lacked in enforcement resources. The agency had 30 permitting and five enforcement staff members, inadequate resources, Kenney said, for more than 55,000 oil and gas facilities in New Mexico.

“The results of our federal and state oil and gas investigations are cause for alarm, with a meager 40 percent compliance rate,” Kenney said. “With the impacts of climate change ravaging our state and air quality degrading, we have no choice but to increase sanctions on polluters until we see a commitment to change behavior.”

New Mexico looks to tighten rules, feds offer more funds

NMED in March submitted a proposed rulemaking to the Environmental Improvement Board looking to raise permitting fees oil and gas companies pay when building extraction sites in the state, hoping the adequate revenue would allow the State to hire more environmental staff.

The proposal stipulated an increase of annual criteria pollution fees from $38.47 per ton to $81 a ton. Filing fees for new construction permits would also be raised from $500 to $2,000 under the proposal, while permit fees would be anchored to the consumer price index to allow them to increase with inflation.

The agency estimated the updated fees would generate $35.8 million in added revenue for the Air Quality Bureau, compared to the about $8.8 million it presently receives from the present fee rates.

NMED held a public hearing March 20 to give more insight on the proposal, the EIB held a hearing June 27 with a final decision by the board expected soon after.

As the State looks to staff up its enforcement efforts, the EPA and U.S. Department of Justice will aid in resolving New Mexico’s enforcement issues, the release read. The U.S. Treasury will receive half the civil penalties instead of the New Mexico General Fund.

“Currently, six people are now managing over 114 active enforcement matters which take thousands of hours, so I welcome the resources provided to us by the EPA and DOJ to hold these polluters accountable,” said NMED Compliance and Enforcement Section Chief Cindy Hollenberg.

The EPA and Department of Energy in June said they were committing $850 million to cut methane pollution at il and gas facilities around the country, targeting specifically smaller operators to aid them in complying with the EPA’s recently published methane standards.

Funds appropriated through the Inflation Reduction Act will be offered to state, industry and tribal organizations throughout the country through a competitive grant process, read an EPA news release.

“These investments from President Biden’s Investing in America agenda will drive the deployment of available and advanced technologies to better understand where methane emissions are coming from,” said EPA Administrator Michael Regan. “That will help us more effectively reduce harmful pollution, tackle the climate crisis and create good-paying jobs.”

A coalition of mental health groups sided with Republicans in opposing policy proposals by Gov. Michelle Lujan Grisham for a special session the governor called for July 18.

The governor announced the session earlier this year as targeting “public safety” on the heels of the 2024 Legislative Session where several public safety bills failed to materialize by the February end date.

Democrats pushed two gun bills that did pass both chambers after being amended through negotiations with Republican lawmakers. A bill to institute a seven-day waiting period for firearms purchases was passed after the wait time was shortened from 14 days and an exemption was added for concealed carry holders. Lawmakers also added the exemption to another bill to ban firearms at polling places before it passed.

GOP members were likely to strongly oppose any additional gun bills from Democrats during the special session, instead calling for tightened border security measures and enhanced crime penalties. Rep. Jim Townsend (R-55) of Artesia suggested funding be allocated to businesses damaged by the South Fork and Salt fires in Ruidoso by. No such funding bill was introduced as of Tuesday.

Ahead of the session, Sen. Cliff Pirtle (R-32) announced a bill to increase penalties for looting, specifically from homes and businesses evacuated in areas where an emergency declaration is in place, as with the fires in Ruidoso.

The GOP also introduced a crime package to increase sentencing for human sex trafficking and “sexual exploitation of children,” by expanding the list of crimes that can be prosecuted under the state’s Racketeering Act.

Rep. Larry Scott (R-62) said if the GOP’s proposals are deemed germane by the governor, allowing them to be brought up in the session, lawmakers will “improve public safety.” He also supported New Mexico tapping into a camera system at the U.S.-Mexico border already put in place by the State of Arizona, “I’m not as optimistic about the governor’s bills,” Scott said. “If the GOP’s bills are deemed not germane, it will be a waste of time.”

Mental health groups want session halted

Despite the plans announced by legislators in the months ahead of the session, the ACLU and 40 other groups and nonprofits argued in a June 9 letter to Lujan Grisham that calling the session in less than two weeks would not allow enough time to develop policies adequately addressing New Mexico’s mental health issues.

The groups expressed concerns for several of the governor’s announced priorities for the session, including civil commitment legislation that would broaden the definition of “harm to self” or “harm to others,” effectively making it easier for the state to commit people to mental institutions or incarcerate repeat offenders for longer, the letter read.

Competency legislation could require involuntary commitment for those with mental health problems in criminal court, which the groups argued would remove authority from prosecutors and the courts themselves to make such decisions on a “case by case basis.”

And legislation framed as improving “median safety” could increase penalties to people who are unhoused, but would not address issues of homelessness in New Mexico, the letter read, or “meaningfully” mitigate danger to pedestrians. Such a bill could also lead to more criminal records and debt for the unhoused, read the letter, adding obstacles to them seeking work or shelter.

“As organizations who work for and with individuals and communities most impacted by these struggles, we share the urgent desire to bring these solutions to bear,” the letter read. “However, with less than two weeks to go before session is slated to begin and an obvious lack of consensus between lawmakers on the (continually shifting) legislative proposals, there is simply no way to achieve the solutions New Mexicans deserve.”

Scott said the state lacked the facilities and staff to hold repeat offenders or those with mental illness “against their will.”

“You order them into treatment, and what happens then?” Scott said. “What we are talking about is a statewide mental health hospital system. Absent a more comprehensive plan, we aren’t going to make any progress.”

Calling off session ‘not an option,’ governor says

Lujan Grisham said the special session was needed to add to public safety legislation passed during the regular 30-day session, arguing it would allow lawmakers to approve bills to make the state “safer.”

“The special session in July will enable us to deliver additional statutory changes that reduce the danger and risk New Mexico communities face every day,” Lujan Grisham said in a statement. “The best proposals for making our state safer will be under consideration, and I welcome input from my colleagues in the legislature.”

Press Secretary Michael Coleman said Tuesday New Mexico’s criminal justice system was in need of the reforms proposed by the governor. He said the governor also asked lawmakers to pass legislation that would increase penalties for convicted felons possessing guns.

Coleman said the median safety bill would address New Mexico’s status as having the highest rate of pedestrian deaths in the U.S., and another proposal would call on law enforcement to collect better crime data to inform state-wide strategies.

“While the governor appreciates input from mental health and social justice advocates, calling off the special session and doing nothing is not an option,” Coleman said. “The status quo is not working in New Mexico, and every day that the root causes of crime and other public safety challenges go unaddressed is another day that New Mexicans are placed at risk.”