A federal infrastructure bill recently passed by the U.S. Senate could unlock federal funding to plug abandoned oil and gas wells, mitigate climate change and incentivize renewable energy.
All those issues have strong implications for New Mexico, a state that relies heavily on fossil fuels as a national leader in the production of oil and gas which many feared was a major contributor to pollution and ultimately climate change.
The state’s two Democrat U.S. Sens. Martin Heinrich and Ben Ray Lujan pointed to additions to the package they said would help combat environmental impacts while assisting their home state to transition away from fossil fuels.
About a third of New Mexico’s budget was tied to oil and gas in recent years when production boomed in the Permian Basin in the southeast corner of the state, leaving some concerned the state could be susceptible to the industry’s boom-and-bust nature.
When the COVID-19 health crisis hit, the state’s $2 billion budget surplus plummeted to an about $400 million deficit as the pandemic brought a slump in fuel demand.
Lujan’s Revive Economic Growth and Reclaim Orphaned Wells (REGROW) Act was included in the infrastructure package passed last week, and he argued it was a means to provide jobs during low periods in oil and gas operations while also mitigating a threat to the environment.
When oil wells are abandoned, they can leak pollutants into the air and water, and the government is often left to fund clean up when bonding agreements prove insufficient, he said.
The REGROW Act would earmark about $4.3 billion in federal funds to clean up orphaned wells across the country on state and private lands, along with $400 million for clean up on public and Tribal lands.
Another $32 million provided by the REGROW Act would go to researching abandoned wells across the U.S.
The bill was supported by oil and gas industry trade groups including the New Mexico Oil and Gas Association and the Independent Petroleum Association of America.
The Senator also touted pieces of the package which would increase research on drunk driving, funding wastewater projects for Tribal communities and minority-owned business development.
“The passage of the Infrastructure Investment and Jobs Act marks a significant investment in New Mexico’s infrastructure – bringing new jobs and an economic boost to our state,” Lujan said in a statement following the legislation’s passage in the U.S. Senate.
“Along with other measures to invest in infrastructure and boost small businesses, this legislation will make a difference in the lives of New Mexicans.”
Heinrich also pushed additions to that survived the review process and were contained in the version of the bill passed by the Senate to support renewable energy transmission, while funding demonstration projects for energy storage, carbon capture, water power and other renewable energy sources.
He also introduced the Advancing the Clean Hydrogen Future Act to provide $200 million in federal funds in each fiscal year from 2022 to 2026, intended to research, commercialize and deploy hydrogen power projects throughout the U.S.
Another $3.5 billion would also be appropriated in the bill for carbon capture projects, Heinrich said, along with funds to mitigate wildfire risk tied to climate change.
“Now is the time to go the extra mile and pass smart, long-term investments that can change the very course of our nation’s future,” Heinrich said.
“I’m going to keep fighting to take meaningful action on the climate crisis, including making the economic, environmental and health benefits of home electrification affordable and accessible to all Americans.”
New Mexico Gov. Michelle Lujan Grisham commended the Senate and President Joe Biden for passage of the $1 trillion infrastructure package that she said would take meaningful actions to “tackle the climate crisis.”
“This enormously important vehicle for job creation and climate mitigation was a campaign promise of the president – and today he has delivered,” she said. “It is no exaggeration to suggest the Biden infrastructure deal will have a positive impact on our nation – and New Mexico – for decades to come.”
Whit Fosburgh, president of the Theodore Roosevelt Conservation Partnership, a national conservation advocacy group, said the infrastructure package would benefit public lands throughout the American West.
“These efforts are not only worth the investment as we think about the future of the nation’s infrastructure—many are long overdue,” he said. “We look forward to working with House lawmakers to advance these priorities and make robust investments in conservation as the infrastructure package moves forward.”
Adrian Hedden can be reached at 575-618-7631, [email protected] or @AdrianHedden on Twitter.