"We take all that severance-tax money (from gas and oil) and share it. And now Santa Fe citizens are saying, ‘We can't have that in our backyard.'"

Drilling for Oil and Gas: A Look at the Complexities, Dollars and Dependency That's Making Change Difficult

by Gershon Siegel and Linda Braun

or many who are opposed to drilling for oil and gas in Santa Fe County, a strong and forceful no feels like the only reasonable answer. However, while our elected officials are listening to our concerns and comments, and seem to have their own personal concerns as well, it appears they're not ready or able to seize the moment and move in a new direction. Most are defaulting to the laws and limitations of what's already in place: that New Mexico is one of a number of Western states in which common law specifies that mineral rights dominate surface rights and that it is one of the top-producing oil and gas states, dependent upon and committed to the one-third of its yearly budget coming from that sector. Strengthening the regulations seems to be the one avenue open in which to create some change, but with such a high dependency on, and therefore commitment to, keeping the oil and gas industry happily drilling here, one is left wondering what recourse "we the people" have to influence our elected officials to turn things in a new and different direction.

Since the announcement several months ago by Tecton Energy that they had purchased 65,000 acres of mineral rights and were planning to do exploratory drilling in the Galisteo Basin, there have been four public meetings inviting citizens to give their input. The first two were presented by Tecton itself; the second two were hosted by Santa Fe County. By the hundreds, a very concerned citizenry attended and gave a mix of informed, uninformed, emotional, rational, pleading, confrontational commentary, with varying numbers of public officials from our state and local government present. County Commissioner Mike Anaya, at one of these meetings, promised there would be no weakening of zoning and land-use laws when it came to oil and gas drilling. Some of his fellow commissioners were much less forthcoming about where they stood on the matter.

Finally, last month, after a long wait for the governor's response to the proposed drilling, Richardson stated he was skeptical that oil and gas drilling could be conducted in the Galisteo Basin without placing our environment and water quality at risk. Yet, despite his doubts he went on to say in that same statement that he was going to make sure that the permit process for drilling maintained maximum protections for health and environment. In other words, Richardson was admitting that, yes, there's going to be a certain amount of environmental and water degradation that goes along with oil and gas drilling, and that's just how it is.

Commonly noted as an important reason to keep oil and gas revenues booming in New Mexico is that our public education system is funded through these moneys. While this source of income has no doubt always looked like a clean and smart deal on paper, this compromise steadily causes huge losses for the people, wildlife and environment of the places that have been transformed into oil and gas production zones. The possibility of that happening here in Santa Fe has awakened us -- in a much more real and vivid sense -- to the dangers and degradations that may become part of our lives. While stronger restrictions have the potential to reduce risks and damages, they are no guarantee of safety and they will still allow the degradation to continue. In addition, our failure to address the bigger issues of our current addiction to oil and gas -- global warming, war and world domination, etc. -- is painfully apparent.

Given this dilemma, we thought it important to hear what our government officials were thinking about this complex matter and contacted a number of key players at the state and county level. We began by asking all five Santa Fe County commissioners a series of questions. Rather than responding individually, most chose to have Steve Ulibarri, the public information officer for Santa Fe County, speak for them.

When asked what is in the way of the county commissioners creating zoning laws that are so restrictive that it would be prohibitive for oil and gas drilling to operate here, Ulibarri stated, "Santa Fe County is a political subdivision of the state and derives its authority from the New Mexico Constitution and from statutes enacted by the Legislature. The constitution and statutes do not provide counties with direct authority over oil and gas operations. The Oil Conservation Division [OCD] of the Energy, Minerals and Natural Resources Department does have direct authority over oil and gas drilling through the Oil and Gas Act and the Water Quality Act. Santa Fe County may regulate oil and gas development through its zoning authority and police powers so long as such regulations do not conflict with state statutes or regulations."

Asked what risk the county faces from a "takings" lawsuit, Ulibarri explained, "If a court found the county guilty of depriving a mineral-rights owner of her right to use her property [‘taking her property'], the county could be liable for the amount of the value of the oil and gas at the time of the lawsuit multiplied by the volume of oil and gas ‘taken.' For example, if crude oil is priced at $95 per barrel and there are 10 million barrels the mineral-rights owner couldn't access, the county could have to pay Tecton Energy $95 million. The county has no insurance for this. The $95 million would have to be paid through property taxes and other county revenue. The present proposed oil and gas ordinance does not do any ‘taking,' so the risk at this point is very small." Ulibarri also repeatedly pointed out that should Tecton take issue with any of the regulations in the ordinance, the case will ultimately wind up in the courts, whose ruling will prevail.

When it comes to the question of potential risks and known dangers associated with drilling for oil and gas, such as water contamination, devastation to the landscape, sinking property values, destruction of archaeological sites, etc., Ulibarri acknowledged that obviously there are risks, but, he added, "we have to put it all into perspective. Just because there are risks doesn't mean they will happen."

As Ulibarri mentions, it is the Oil Conservation Division, not the county, that has direct authority over the industry. However, OCD's director, Mark Fesmire, at a November 15th public meeting at El Dorado Elementary School, in front of a packed gymnasium, hinted to the concerned crowd that the Santa Fe County Board of Commissioners could do much to make it difficult on the oil and gas industry to drill in Santa Fe County. Indeed, there was a hearty round of appreciative applause at his encouraging words.

However, when we spoke with him a month later, just days after he had appeared before the Legislature's Revenue Stabilization and Tax Policy Committee and had been accused of hostility toward the oil and gas industry by some of its members, Fesmire's tone seemed much more conciliatory. He told us, "Anything we do will have an effect on the revenue. Oil is New Mexico's present, but water is our future. I'm one who believes we can produce our hydrocarbon resources in an environmentally sound manner; it's just that we can't do it with the same rules, regulation and attitudes that have resulted in the legacy issues that we have today. Anytime OCD contemplates proposing regulations, we have to balance the objective against the cost to the producer and to the state. Any industrial activity has inherent in it the balance between a safety risk versus the value of the product to society. There's always going to be that trade-off. The system of the rule-making process is the means by which a democracy determines where society draws the line between safety to the public versus the value of that product. Right now we're engaged in the process of making that determination."

Hoping for a somewhat visionary answer, we asked what New Mexico would do to replace the reserves derived from oil and gas if those resources were to suddenly vanish, but Fesmire's comments fell far from those somewhat rebellious notes he'd hit the month before in Eldorado. His response was, "The governor has worked hard to position New Mexico as the clean-energy state. New Mexico has even been referred to as the Saudi Arabia of solar and wind energy. On the other side, we've also got uranium and coal available here. So the hope is that these other sources would evolve quickly enough to fill the void."

When Fesmire appeared in front of the Legislature's Revenue Stabilization and Tax Policy Committee last November, one of those critical about excessive regulation of the oil and gas industry was the committee's interim chair, Senator Timothy Jennings. He has been a state senator representing District 32, covering Chaves, Eddy, Lincoln and Otero counties, for three decades. Since his committee is concerned with making sure that the state secures as much tax money as possible from the oil and gas industry, we asked him what he thought about the citizens around Santa Fe who are opposed to drilling for oil and gas in the Galisteo Basin. What came forward was an earful: "We don't necessarily like all these oil wells. But the money comes from down here, and we take it to Santa Fe and share it for museums, highways -- for everything. We take all that severance-tax money (from gas and oil) and share it. And now Santa Fe citizens are saying, ‘We can't have that in our backyard.' That money's good enough to spend; that's all right. But when it comes down to it, they say, ‘We can't have that crap in our yard.' I think that's kind of dirty.

"For those of us who live in the country, I don't think the windmills [those generating electricity for PNM] are beautiful -- they've destroyed part of New Mexico's scenic skyline. And Santa Fe thinks it's OK. But you drive down there from Portales to Alieda, and if that windmill's not on your ranch and you're not collecting that $5,000-a-year royalty money, I don't think that windmill's very pretty.

"We're all in this thing together, and we all have little things to do, and Santa Fe, just like the rest of us, has to take the good with the bad," he went on. "The nice thing about those oil wells is that they drill in about a month and then they take them down -- they're gone. All you see are a couple of pipes sticking up, maybe a tank battery, but a tank battery is only 20 feet tall. These windmills are there forever, and they're hundreds of feet tall. And no one's saying anything about all the birds they kill -- eagles and everything else."

Jennings concluded by adding, "The oil and gas industry has been a big help to all of us, and I think we'd better appreciate it. We would be paying a half a billion in taxes at least if it wasn't for the oil and gas industry."

Our officials, from the governor on down, seem to be telling the citizens of Santa Fe County that they can't have their cake and eat it too. The oil and gas industry in this state funds our schools, highways, museums and other public services, and until we can replace those revenues, we need to be willing to endure a certain amount of degradation to our water, land, air and general quality of life. This oil-marinated pickle that New Mexicans now find themselves in is not dissimilar to the larger, even more tragic national predicament. Our federal officials are telling us in so many words that we must continue to fund wars so that the United States can invade, occupy and control regions of the oil-rich Middle East or else forgo the cheap energy that affords Americans the way of life that is the envy of the world.

Opposing drilling in Santa Fe County brings us face-to-face with the fact that vast numbers of other beautiful places -- here in New Mexico and throughout the world -- have been defaced and destroyed to provide all of us with our many "necessities" and "comforts," from fuel to everything plastic and beyond. For many, the paradox of driving our cars -- knowing we're contributing to global warming and perpetuating the demand for more oil -- raises ever-growing concerns of what we can or must do, change or sacrifice to pull ourselves out of contributing to exactly what we want to put an end to. Do we hitchhike, carpool, walk, bike, bus? Get a hybrid or an electric car? Working toward keeping drilling out of our home territory is important, and succeeding would be even better, as it would put in motion a model that other communities could follow. At the same time, given our energy needs and habits, moving forward with alternatives now -- even if it's primarily in our own grassroots, independent ways -- is essential. As Buckminster Fuller said, "You never change things by fighting the existing reality. To change something, build a new model that makes the existing one obsolete."




				Table of contents Home

	"We take all that severance-tax money (from gas and oil) and share it. And now Santa Fe citizens are saying, ‘We can't have that in our backyard.'" Drilling for Oil and Gas: A Look at the Complexities, Dollars and Dependency That's Making Change Difficult by Gershon Siegel and Linda Braun or many who are opposed to drilling for oil and gas in Santa Fe County, a strong and forceful no feels like the only reasonable answer. However, while our elected officials are listening to our concerns and comments, and seem to have their own personal concerns as well, it appears they're not ready or able to seize the moment and move in a new direction. Most are defaulting to the laws and limitations of what's already in place: that New Mexico is one of a number of Western states in which common law specifies that mineral rights dominate surface rights and that it is one of the top-producing oil and gas states, dependent upon and committed to the one-third of its yearly budget coming from that sector. Strengthening the regulations seems to be the one avenue open in which to create some change, but with such a high dependency on, and therefore commitment to, keeping the oil and gas industry happily drilling here, one is left wondering what recourse "we the people" have to influence our elected officials to turn things in a new and different direction. Since the announcement several months ago by Tecton Energy that they had purchased 65,000 acres of mineral rights and were planning to do exploratory drilling in the Galisteo Basin, there have been four public meetings inviting citizens to give their input. The first two were presented by Tecton itself; the second two were hosted by Santa Fe County. By the hundreds, a very concerned citizenry attended and gave a mix of informed, uninformed, emotional, rational, pleading, confrontational commentary, with varying numbers of public officials from our state and local government present. County Commissioner Mike Anaya, at one of these meetings, promised there would be no weakening of zoning and land-use laws when it came to oil and gas drilling. Some of his fellow commissioners were much less forthcoming about where they stood on the matter. Finally, last month, after a long wait for the governor's response to the proposed drilling, Richardson stated he was skeptical that oil and gas drilling could be conducted in the Galisteo Basin without placing our environment and water quality at risk. Yet, despite his doubts he went on to say in that same statement that he was going to make sure that the permit process for drilling maintained maximum protections for health and environment. In other words, Richardson was admitting that, yes, there's going to be a certain amount of environmental and water degradation that goes along with oil and gas drilling, and that's just how it is. Commonly noted as an important reason to keep oil and gas revenues booming in New Mexico is that our public education system is funded through these moneys. While this source of income has no doubt always looked like a clean and smart deal on paper, this compromise steadily causes huge losses for the people, wildlife and environment of the places that have been transformed into oil and gas production zones. The possibility of that happening here in Santa Fe has awakened us -- in a much more real and vivid sense -- to the dangers and degradations that may become part of our lives. While stronger restrictions have the potential to reduce risks and damages, they are no guarantee of safety and they will still allow the degradation to continue. In addition, our failure to address the bigger issues of our current addiction to oil and gas -- global warming, war and world domination, etc. -- is painfully apparent. Given this dilemma, we thought it important to hear what our government officials were thinking about this complex matter and contacted a number of key players at the state and county level. We began by asking all five Santa Fe County commissioners a series of questions. Rather than responding individually, most chose to have Steve Ulibarri, the public information officer for Santa Fe County, speak for them. When asked what is in the way of the county commissioners creating zoning laws that are so restrictive that it would be prohibitive for oil and gas drilling to operate here, Ulibarri stated, "Santa Fe County is a political subdivision of the state and derives its authority from the New Mexico Constitution and from statutes enacted by the Legislature. The constitution and statutes do not provide counties with direct authority over oil and gas operations. The Oil Conservation Division [OCD] of the Energy, Minerals and Natural Resources Department does have direct authority over oil and gas drilling through the Oil and Gas Act and the Water Quality Act. Santa Fe County may regulate oil and gas development through its zoning authority and police powers so long as such regulations do not conflict with state statutes or regulations." Asked what risk the county faces from a "takings" lawsuit, Ulibarri explained, "If a court found the county guilty of depriving a mineral-rights owner of her right to use her property [‘taking her property'], the county could be liable for the amount of the value of the oil and gas at the time of the lawsuit multiplied by the volume of oil and gas ‘taken.' For example, if crude oil is priced at $95 per barrel and there are 10 million barrels the mineral-rights owner couldn't access, the county could have to pay Tecton Energy $95 million. The county has no insurance for this. The $95 million would have to be paid through property taxes and other county revenue. The present proposed oil and gas ordinance does not do any ‘taking,' so the risk at this point is very small." Ulibarri also repeatedly pointed out that should Tecton take issue with any of the regulations in the ordinance, the case will ultimately wind up in the courts, whose ruling will prevail. When it comes to the question of potential risks and known dangers associated with drilling for oil and gas, such as water contamination, devastation to the landscape, sinking property values, destruction of archaeological sites, etc., Ulibarri acknowledged that obviously there are risks, but, he added, "we have to put it all into perspective. Just because there are risks doesn't mean they will happen." As Ulibarri mentions, it is the Oil Conservation Division, not the county, that has direct authority over the industry. However, OCD's director, Mark Fesmire, at a November 15th public meeting at El Dorado Elementary School, in front of a packed gymnasium, hinted to the concerned crowd that the Santa Fe County Board of Commissioners could do much to make it difficult on the oil and gas industry to drill in Santa Fe County. Indeed, there was a hearty round of appreciative applause at his encouraging words. However, when we spoke with him a month later, just days after he had appeared before the Legislature's Revenue Stabilization and Tax Policy Committee and had been accused of hostility toward the oil and gas industry by some of its members, Fesmire's tone seemed much more conciliatory. He told us, "Anything we do will have an effect on the revenue. Oil is New Mexico's present, but water is our future. I'm one who believes we can produce our hydrocarbon resources in an environmentally sound manner; it's just that we can't do it with the same rules, regulation and attitudes that have resulted in the legacy issues that we have today. Anytime OCD contemplates proposing regulations, we have to balance the objective against the cost to the producer and to the state. Any industrial activity has inherent in it the balance between a safety risk versus the value of the product to society. There's always going to be that trade-off. The system of the rule-making process is the means by which a democracy determines where society draws the line between safety to the public versus the value of that product. Right now we're engaged in the process of making that determination." Hoping for a somewhat visionary answer, we asked what New Mexico would do to replace the reserves derived from oil and gas if those resources were to suddenly vanish, but Fesmire's comments fell far from those somewhat rebellious notes he'd hit the month before in Eldorado. His response was, "The governor has worked hard to position New Mexico as the clean-energy state. New Mexico has even been referred to as the Saudi Arabia of solar and wind energy. On the other side, we've also got uranium and coal available here. So the hope is that these other sources would evolve quickly enough to fill the void." When Fesmire appeared in front of the Legislature's Revenue Stabilization and Tax Policy Committee last November, one of those critical about excessive regulation of the oil and gas industry was the committee's interim chair, Senator Timothy Jennings. He has been a state senator representing District 32, covering Chaves, Eddy, Lincoln and Otero counties, for three decades. Since his committee is concerned with making sure that the state secures as much tax money as possible from the oil and gas industry, we asked him what he thought about the citizens around Santa Fe who are opposed to drilling for oil and gas in the Galisteo Basin. What came forward was an earful: "We don't necessarily like all these oil wells. But the money comes from down here, and we take it to Santa Fe and share it for museums, highways -- for everything. We take all that severance-tax money (from gas and oil) and share it. And now Santa Fe citizens are saying, ‘We can't have that in our backyard.' That money's good enough to spend; that's all right. But when it comes down to it, they say, ‘We can't have that crap in our yard.' I think that's kind of dirty. "For those of us who live in the country, I don't think the windmills [those generating electricity for PNM] are beautiful -- they've destroyed part of New Mexico's scenic skyline. And Santa Fe thinks it's OK. But you drive down there from Portales to Alieda, and if that windmill's not on your ranch and you're not collecting that $5,000-a-year royalty money, I don't think that windmill's very pretty. "We're all in this thing together, and we all have little things to do, and Santa Fe, just like the rest of us, has to take the good with the bad," he went on. "The nice thing about those oil wells is that they drill in about a month and then they take them down -- they're gone. All you see are a couple of pipes sticking up, maybe a tank battery, but a tank battery is only 20 feet tall. These windmills are there forever, and they're hundreds of feet tall. And no one's saying anything about all the birds they kill -- eagles and everything else." Jennings concluded by adding, "The oil and gas industry has been a big help to all of us, and I think we'd better appreciate it. We would be paying a half a billion in taxes at least if it wasn't for the oil and gas industry." Our officials, from the governor on down, seem to be telling the citizens of Santa Fe County that they can't have their cake and eat it too. The oil and gas industry in this state funds our schools, highways, museums and other public services, and until we can replace those revenues, we need to be willing to endure a certain amount of degradation to our water, land, air and general quality of life. This oil-marinated pickle that New Mexicans now find themselves in is not dissimilar to the larger, even more tragic national predicament. Our federal officials are telling us in so many words that we must continue to fund wars so that the United States can invade, occupy and control regions of the oil-rich Middle East or else forgo the cheap energy that affords Americans the way of life that is the envy of the world. Opposing drilling in Santa Fe County brings us face-to-face with the fact that vast numbers of other beautiful places -- here in New Mexico and throughout the world -- have been defaced and destroyed to provide all of us with our many "necessities" and "comforts," from fuel to everything plastic and beyond. For many, the paradox of driving our cars -- knowing we're contributing to global warming and perpetuating the demand for more oil -- raises ever-growing concerns of what we can or must do, change or sacrifice to pull ourselves out of contributing to exactly what we want to put an end to. Do we hitchhike, carpool, walk, bike, bus? Get a hybrid or an electric car? Working toward keeping drilling out of our home territory is important, and succeeding would be even better, as it would put in motion a model that other communities could follow. At the same time, given our energy needs and habits, moving forward with alternatives now -- even if it's primarily in our own grassroots, independent ways -- is essential. As Buckminster Fuller said, "You never change things by fighting the existing reality. To change something, build a new model that makes the existing one obsolete."