Top New Mexico lawmakers concerned about oil and gas rules

ALBUQUERQUE, N.M. (AP) — A group of powerful New Mexico lawmakers is questioning whether state environment officials weighed the potential economic effects of a proposal to cut smog-causing pollution across the oil and gas industry.

Leaders of the Legislative Finance Committee sent a letter last week to state Environment Secretary James Kenney, saying the rules would have an effect on state general funds and local government coffers.

“The potential economic and revenue impact to the state is a matter of great importance to the committee,” the letter read.

One study cited by the lawmakers puts annual revenue losses for the state and local governments at $730 million. Another independent analysis by an economic research firm found the rules would cost operators more than $3 billion to comply during the first year. More than one-third of currently operating oil wells and 87% of natural gas wells would become uneconomical after accounting for increased regulatory costs, according to that study.

Experts have said there would likely be declines in both oil and gas production in New Mexico, which is now ranked second in the U.S. when it comes to current production.

The committee sent the Environment Department a series of questions. It wasn't immediately clear Tuesday if the agency had responded.

State regulators are set to consider the proposed rules at a meeting later this month.