Clean Energy Win in Colorado and New Mexico

BY ON November 8, 2018

This was written by Ben Lefebvre. It originally posted on Politico:

Democrats are set to expand their reach into the U.S. oil patch after Tuesday’s election, potentially turning Western states into a testing ground for new oil and gas regulation.

Colorado and New Mexico elected Democratic governors who ran on promises to expand clean energy production and crack down on methane emissions from drilling rigs. Democrats also won unified control of the legislatures in both states, giving the party an opportunity to pursue new rules for oil and gas companies even as the Trump administration has pushed in the opposite direction in D.C. The two states accounted for a combined 9 percent of U.S. oil and gas production in 2017.

“The deregulatory push currently taking place in Washington by the Trump administration, this is a repudiation of that,” Jon Goldstein, director of regulatory and legislative affairs at Environmental Defense Fund said of the election results in the two states.

Colorado, under Democratic Gov. John Hickenlooper, already had some of the strictest rules governing methane emissions from drilling operations on state lands. The rules served as a model for the Obama administration’s own regulations, which were eventually repealed by the Interior Department under Trump.

But with liberal Rep. Jared Polis moving into the governor’s mansion next year and the General Assembly now in line for full Democrat control, the government there is expected to back a shift toward more renewable energy even more strongly and possibly revisit rules increasing the distance oil and gas wells have to be from occupied structures. Colorado voters rejected a ballot measure that would have required 2,500-foot setbacks, but the relatively narrow margin of defeat despite a more than 40-to-1 spending advantage by industry-funded opposition groups has left some oil allies in the state worried about what comes next.

Polis promised to transition the state’s energy consumption to 100 percent renewable energy by 2040 by easing the permitting process for solar, wind and geothermal projects on public lands. And he has said he is open to new rules on setbacks, although he opposed the ballot measure and pledged to look for “common ground” with the industry.

In New Mexico, Democratic Rep. Michelle Lujan Grisham’s victory in the governor’s race and Democrat Stephanie Garcia Richard winning a surprise victory as state land commissioner will also almost certainly lead to stricter methane regulations and increased renewable energy investments, analysts said.

Lujan Grisham campaigned on increasing investment in solar and wind projects in the state and creating a statewide rule to reduce methane leaks from new and existing oil and gas wells.

Drilling in the Permian Basin shale formation has contributed to New Mexico’s increase in oil and gas production in recent years that has propelled it to becoming the country’s third-largest oil producer. But outgoing Republican Gov. Susana Martinez’s opposition to tighter regulations helped lead to a backlash among voters, said Jenny Rowland-Shea, senior policy for public lands at Center for American Progress.

New Mexico “has been trying to get more oil and gas companies, and they’ve been coming in faster than regulations could catch up,” Rowland-Shea said. “New Mexico voters saw that.”

There may be less for state Democrats to do in New Mexico, as nearly two-thirds of the oil production there is on federal land, said Rene Santos, senior director of exploration and production analysis at Platts S&P Global. But the industry should still look to more regulation than they may have been used to in the state.

“A new land commissioner who will pose tougher regulations on methane leaks will not result in lower oil or gas production in the state,” Santos said. “However, depending on the type of regulations, it will end costing producers more to operate oil and gas wells.”

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TOPICS: Clean Air Rules and Regulations, Colorado, Fracking, New Mexico, Politics, Renewable Energy