Oil industry tailored air quality law with help from NM’s top environment official

Environment Secretary James Kenney collaborated with NMOGA and Exxon

By: - September 18, 2021 3:00 am

A pumpjack sits on the outskirts of town at dawn in the Permian Basin oil field near Midland, Texas. (Photo by Spencer Platt / Getty Images)

Last legislative session, one of the bills that Gov. Michelle Lujan Grisham championed was the Clean Fuel Standard Act. Her administration touted it as a market-based approach to climate change that would require fuel companies to reduce the amount of carbon in their fuels in New Mexico. 

Among those tasked with shepherding the act forward was James Kenney, secretary of the Environment Department. Part of his job was trying to garner support for the measure from oil and gas interests. 

Kenney’s eagerness to work with industry apparently caught a lobbyist for the New Mexico Oil and Gas Association (NMOGA) by surprise. “Wow, thanks so much for your quick response, Secretary!” the lobbyist, Aimee Barabe, wrote in an email.

Kenney replied: “We aim to please with quick responses!”

But during Kenney’s talks with industry leaders, the Clean Fuel Standard Act appears to have become a bargaining chip for oil and gas interests, according to a series of emails obtained by Documented, a nonpartisan watchdog group, and shared with Source NM.

Over time, the emails show, discussions turned to two other pieces of environmental legislation. While the Clean Fuel Standard never passed, oil and gas industry leaders went through New Mexico’s top environment official to get changes made to bills that are now state law. 

Access and sway

The records provide a detailed example of how the fossil fuel industry exercises its stranglehold on New Mexico’s government and politics, especially when oil and gas lobbyists get involved.

These emails also show fossil fuel representatives have a much easier time accessing and influencing policymakers than environmental advocates or common citizens, said Lucas Herndon, energy and policy director of ProgressNow New Mexico.

“It is clear from the language and the casual banter in these emails that oil and gas lobbyists have an overly comfortable relationship with our lawmakers,” Herndon said. “It’s very clear that industry has much more sway to change seemingly small parts of language that actually have major impacts on policy or on law.” 

In its discussions with Kenney, industry representatives were able to make the most substantive changes to HB 76, the so-called Bad Actor bill, which allows state or local officials to deny permit applications to operators that have a history of poor compliance with air-quality regulations. 

“We considered a number of changes to the bill from NMOGA, IPANM [Independent Petroleum Association of New Mexico] and various operators who reached out to us separately,” Kenney wrote to NMOGA’s Barabe as well as a lobbyist for Exxon Mobil.

The initial bill, introduced by two House Democrats, gave local agencies and state departments broad authority to deny or revoke any Air Quality Control Act permits — which regulate construction, modification and operation of any air-polluting source — based on a multitude of prior infractions. 

Barabe, the NMOGA lobbyist, asked Kenney to add language to the bill that would restrict local agencies to consider only five years of compliance history when making permitting decisions. While the final bill doesn’t include that ask, it was amended to include a 10-year compliance period. Essentially, this allows agencies to ignore violations once they’re a decade old. 

Oil and gas suggestions

A major change that NMOGA asked for and received was to amend language around what court convictions may be factored into permitting decisions. An early version of the bill allowed consideration of any conviction — foreign or domestic — related to environmental crime, price-fixing, bribery or fraud, among other issues. 

But the version of the bill that became law restricted convictions to U.S. federal or state courts, excluding any international issues consideration.

A third significant edit NMOGA brokered was adding a language allowing local authorities to give a conditional permit to companies that had their permit denied or revoked on environmental or legal grounds, so long as the company creates an “action plan” — creating potential for bad actors to temporarily operate emitting facilities.

Separately, on SB 8, a bill allowing New Mexico to adopt stricter air-quality rules than the federal government, fossil fuel interests partially got their way again. While the final bill didn’t include NMOGA-supported amendments offered by Republican Sen. William Sharer from Farmington, it does require local authorities to hold a public hearing before adopting stricter air regulations. 

In response to a detailed list of questions, NMOGA spokesperson Robert McEntyre said in a statement that the association’s lobbying is proactive work to “support New Mexico’s energy leadership and success, and avoid any unintended consequences that could disrupt our state economy or the communities who depend on our industry.”

While McEntyre said NMOGA appreciates policymakers’ “willingness” to discuss its concerns, the association at one point last legislative session criticized the Environment Department, saying it wasn’t willing to work with the association on amending bills, specifically HB 76

Kenney fired back in an email, defending his department, writing: “I agree we did not take all of NMOGA’s changes on this bill, but we took many oil and gas suggestions and amended the bill accordingly.”

The recipients included Barabe and Ryan Flynn, who was then NMOGA’s president and CEO — a position he took after leaving his job as secretary of the state Environment Department, Kenney’s job today. 

Spending for edits

A spokesperson for Kenney’s office defended his advocacy on behalf of the Clean Fuel Standard Act. In a statement, she said no single person or group has “undue influence” on the department and that “ensuring meaningful stakeholder engagement can improve draft legislation and the likelihood of the bill passing the Legislature.”

But changes to bills aren’t the only ways NMOGA influenced state rules this year. Outside the legislative session, the association helped lead a nearly $1 million campaign to influence proposed methane regulations, getting state regulators to take more than 70 edits from industry. 

While Kenney’s work trying to sell the Clean Fuel Standard to oil and gas leaders didn’t bear fruits for the state, the bargaining process did lead to gains for the industry.

“This is not necessarily about demonizing a secretary of a department for doing their job, which is to speak with interested parties,” Herndon said. “However, this is a case to remind us which industries have undue influence over those departments, and which industries we see over and over again changing or bending laws to benefit their interests: it’s oil and gas.”

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Cody Nelson
Cody Nelson

Cody Nelson is an independent journalist whose work focuses primarily on investigative environmental reporting and producing audio documentaries. Cody is the producer and co-creator of a documentary podcast called Parks, a regular contributor to The Guardian, and a producer for Blue Wire Podcasts. His writing has been published with many other fine outlets including Floodlight, Capital & Main, High Country News, Audubon magazine, and the New Mexico Political Report. Before going independent, Cody was a reporter and producer at Minnesota Public Radio.