by Mark Olalde
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Last year, representatives of New Mexico’s oil industry met behind closed doors with the very groups with which they typically clash — state regulators and environmentalists — in search of an answer to the more than 70,000 wells sitting unplugged across the state. Many leak oil, brine and toxic or explosive gasses, and more than 1,700 have already been left to the public to clean up.
The situation is so dire that oil companies agreed to help try to find a solution.
After months of negotiations, the state regulators who ran the meetings emerged with a proposal that they hoped would appease everyone in the room. The bill would instruct drillers to set aside more money to plug their wells, authorize regulators to block risky sales to companies that would be unlikely to afford to clean up their wells and implement a buffer zone between wells and hospitals, schools, homes and other buildings.
The industry, unhappy with the state’s final language, turned against the bill it helped shape.
The influential New Mexico Oil and Gas Association told its supporters that HB 133 was “a radical and dangerous approach designed to strangle the oil and gas industry” and asked them to send their elected representatives a form letter opposing it. If passed, the trade group proclaimed, the bill would “Destroy New Mexico.” The Independent Petroleum Association of New Mexico, which represents small oil companies, called the bill “overzealous.”
New Mexico’s main oil trade group came out against a reform bill that it had helped shape, shifting its position to neutral only after the bill was amended. (Screenshot and annotation by ProPublica)In the face of such opposition, Democrats removed key provisions. The New Mexico Oil and Gas Association eventually changed its position to neutral, but largely stripped of substance, the bill died on the floor of the House of Representatives.
“Industry killing the bills was the dynamic I saw,” said Adam Peltz, a senior attorney with the Environmental Defense Fund who helped write the New Mexico proposal, as well as similar bills in other oil-producing states.
New Mexico faces a multibillion-dollar shortfall between the money companies have set aside to plug wells and the actual cost of doing so, according to state research, a reality mirrored in many states.
Across the country, more than 2 million oil and gas wells sit unplugged, but the money held in cleanup funds, called bonds, is many tens of billions of dollars short of the projected costs, ProPublica and Capital & Main found. Now, a once-in-a-lifetime effort to shrink that shortfall is underway, spurred in large part by federal funding for well-plugging efforts.
As regulators and legislators seek to require that drillers set aside more money for the work, they have invited oil companies and trade groups to help write the regulations. This dynamic — politically expedient in states where the industry wields tremendous influence — has combined with secretive drafting processes and millions of dollars of industry lobbying to weaken or kill proposals in state after state.
In some, including Oklahoma and Utah, lawmakers propose bills only after oil trade groups approve the language. In many others, regulators and drillers work together through organizations such as the quasi-governmental Interstate Oil and Gas Compact Commission to design policy. But even when given a seat at the table, like in New Mexico, the........