New Mexico lawmakers started prefiling bills last week ahead of the 2024 Legislative Session that starts Jan. 16, with many seeking to amend how the state regulates its leading industry oil and gas.

The 30-day budget-focused session will see legislators debating how to spend a $3.5 billion infusion of “new money” largely from oil and gas, but several of the bills already filed would change state laws governing how the industry operates in New Mexico.

Here are the top oil and gas bills to watch during the 2024 New Mexico Legislative Session.

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New Mexico House Bill 30 – water use in oil and gas drilling

HB 30, sponsored by Rep. Debra Sarinana (D-21), would amend the state’s Oil and Gas Act to prohibit the use of freshwater in oil and gas drilling at depths lower than freshwater tables. This bill also would require operators to use treated or recycled produced water instead.

Produced water is a combination of flowback from hydraulic fracturing operations, known as “fracking” and formation water brought to the surface with crude oil and natural gas.

In recent years, operators began treating and reusing this water for subsequent fracking operations, instead of disposing of it as waste via reinjection and the bill sought to codify this practice into law.

It would also require operators to submit annual reports on their water usage to the Oil Conservation Division which would then publish the reports online.

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New Mexico House Bill 31 – penalties for oil and gas spills, wastewater management

Sarinana also pre-filed HB 31 that would outlaw spills or leaks of oil or produced water into the environment from extraction facilities.

As it stands, such spills violate state law if the operator fails to report or take steps to remediate the incident, and this bill would mean operators are in violation the moment the spill occurs.

It would also specify financial damages the operator would pay based on the size of the spill.

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Spills of less than five barrels of oil or other drilling liquids would incur a $2,000 fine, while a $10,000 penalty would be assessed for spills of five to 25 barrels.

For spills of more than 25 barrels, the fine would climb to $25,000 plus another $2,000 for each barrel spilled more than 25 barrels.

Another portion of the bill would require the Oil Conservation Division to determine the chemical composition of spilled produced water, treated or not, and make the information publicly available.

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The bill also added language to specify that any use of produced water resulting in water pollution be prohibited, and that the use and movement of produced water be tracked in New Mexico and reported on publicly.

HB 31 would appropriate $750,000 to the Oil Conservation Division to hire five full-time employees tasked with carrying out the bill’s provisions.

New Mexico House Bill 32 – school ‘protection zones’ from oil and gas

Sarinana’s third oil and gas bill would create “children’s health protection zones” where oil and gas operations would be banned within one mile of schools starting in July. Existing oil and gas operations within the buffer would be phased out by 2028.

This would expand a similar policy put in place earlier this year by the New Mexico State Land Office that blocked such operations on State Trust land.

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Civil penalties of $30,000 per day, per violation could be assessed against companies operating within the buffer zones, should the bill pass. The fines would be capped at $200,000.

Operators would also be required to submit maps and an inventory of facilities and schools to the Oil Conservation Division when applying for permits.

The bill also added requirements for operations within the protection zone to curb noise, air pollution emissions, traffic and increased leak detection, and included language to allow companies to apply for variances.

New Mexico House Bill 48 – increased fees paid for oil and gas operations

Sponsored by Rep. Matthew McQueen (D-50), HB 48 would increase royalty payments operators pay to New Mexico to produce oil and gas on State Trust lands.  

The rate would go up from 20 percent to 25 percent of the cash value of the produced oil and gas if the bill passes.

Adrian Hedden can be reached at 575-628-5516, achedden@currentargus.com or @AdrianHedden on the social media platform X.