Legislation that would stop the issuance of new fracking permits for four years made it out of the Senate Conservation Committee on a 5-4 vote Saturday despite concerns about the financial impacts on a state that relies heavily on oil and gas revenues.
A fiscal impact report on Senate Bill 149, which seeks research on the environmental impacts of fracking, among other areas of study, found the state would take a $1.65 billion hit in the upcoming fiscal year if the measure is signed into law.
But one of the sponsors, Sen. Antoinette Sedillo Lopez, D-Albuquerque, disputed the findings in the so-called FIR, saying it assumed there would be no new wells when there are about 1,000 permits pending.
"The reason for the pause is to bring everybody to the table and put urgency on the need to regulate [the oil and gas industry]," she said during the committee hearing. "I always say, 'New Mexico should be open for business, not open for exploitation,' and unfortunately with regard to the industry, we've been exploited."
Sen. Joseph Cervantes, a Las Cruces Democrat who joined with the three Republicans on the committee in voting against the measure, questioned how state agencies could have botched the fiscal analysis.
"I would hope, senator ... that you would correct the secretary of energy and all the Cabinet secretaries and help them realize that their analysis and their numbers are incorrect and that they evidently don't know what they're doing," he said. "We need to have an answer to that if you're telling me that they don't know what they're doing and their assumptions and numbers are incorrect."
About one-third of the recurring state revenue that goes into the state's budget comes from the oil and gas industry.
Cervantes noted the bill would have "some pretty serious implications" on the state's coffers. The fiscal impact report found that local governments stand to lose $226 million of the overall estimated revenue decline.
The committee chairwoman, Sen. Liz Stefanics, D-Cerrillos, suggested Sedillo Lopez amend the legislation "to become a reporting bill versus a pause on fracking in order to gain factual information from all of the departments." Sedillo Lopez said she would consider the idea if her measure made it out of the Senate Conservation Committee.
The bill faces an uphill challenge. It will head next to the Senate Judiciary Committee, which Cervantes chairs.
The bill drew support from environmental advocates and opposition from the oil and gas industry and business interests.
"There are productive ways to transition New Mexico to a lower carbon future — this is not the right approach," said Patrick Killen, a registered lobbyist for Chevron. "The Legislature's own fiscal impact report shows this bill will decimate our state's budget."
But proponents of the measure said the environment, public health and protecting the state's water resources were at stake.
"If oil and gas were going to make us rich, we would be rich by now," said Rebecca Sobel, senior climate and energy campaigner for WildEarth Guardians.
"If we are going to continue to be a state that is [an] enormous producer of oil and gas, we also have to take on the enormous responsibility of regulating that industry, so that our environment and our public health is protected," said Gail Evans, an attorney with the New Mexico Environmental Law Center. "We have a lot of work to do to develop our regulatory capacity in the state."
After the meeting, Larry Behrens, spokesman for the Western States chapter of Power the Future, a nonprofit fossil fuel advocacy group, called proponents of the measure hypocrites.
"As a winter storm approaches New Mexico, how do proponents of a fracking ban plan to keep their homes warm?" he asked. "It should be noted while the eco-left has plenty of time to bloviate, New Mexico's energy workers are working hard to make sure the majority of homes in the state, including those of eco-left hypocrites, will be able to stay warm during the oncoming storm."
Follow Daniel J. Chacón on Twitter @danieljchacon.