American Oil and Gas Reporter - June 2024 - 39

ConventionSec tion: Independent Petroleum Association of New Mexico
Lively Legislature Illustrates
Challenge In New Mexico
By Del Torkelson
ROSWELL, N.M.-As the Biden administration
unleashes a barrage of new
requirements for U.S. oil and gas operations-especially
on federal lands-oil and
gas groups in development-friendly states
are focusing on policies emanating from
Washington. By contrast, industry representatives
in less benign political environments
often must fight a two-front war.
That is the situation in New Mexico,
reflects Independent Petroleum Association
of New Mexico President Jared Hembree,
noting the group constantly confronts initiatives
originating from both Washington
and Santa Fe. " We have so much production
from federal lands that what happens in
Washington is always a concern, and has
been even more so during this current administration, "
says Hembree, a partner at
the Roswell office of Hinkle Shanor LLP.
" The same is true with our state. It seems
as if at every turn, there are efforts to
make it harder for us to do business. "
As IPANM prepares for its 2024 convention,
July 11-12 at the Tamaya Resort
in Albuquerque, N.M., Executive Director
Jim Winchester says state-level threats
command the lion's share of its consideration.
" We are pushing back against
problematic federal requirements as well, "
he conveys. " But frankly, we have our
hands full with the hostility our state
government is showing, specifically toward
independents. We need to help New Mexico
policymakers understand how some
of the policies they support will trickle
down to the schools and economy. "
Radical Re-Write
The 2024 New Mexico legislature has
provided this year's most dangerous manifestation
of anti-industry sentiment, Winchester
reports. He indicates that the left
flank of the Democratic Party, which controls
the governor's administration and
both chambers of the Capitol, increasingly
exerts influence.
According to Hembree, IPANM suspected
something big was brewing not
long after he began his presidential term
in summer 2023, when the New Mexico
" The experience in the legislature was eyeopening
as to how certain members of that
body really view the industry. It tells you
something when every reference someone
makes to an oil well includes the word 'dirty.' "
-Jared Hembree
IPANM President
Energy, Minerals and Natural Resources
Department's Oil Conservation Division
started hosting stakeholder meetings about
the New Mexico Oil and Gas Act.
" We were not initially invited, but we
invited ourselves and participated because
we caught wind that some industry opponents
wanted to make wholesale changes
to it, " he recounts. " These included financial
assurances, transfers of operatorship, civil
penalties, setbacks and more. Although
the process was collaborative, the results
were not, because when the legislative
session began, the bill that was introduced
largely dismissed industry stakeholders'
concerns, while giving the environmental
stakeholders everything they asked for. "
There was strong evidence that the
substance of the bill, HB 133, largely
was predetermined before the stakeholder
discussions, Winchester says. " A lot of
the meetings were simply window dressing, "
he assesses. " Not only was our
input ignored, but each subsequent stakeholder
session revealed rules that were
progressively worse for the industry. Each
time, the administrators and facilitators
increased the degree of restrictiveness. "
Hembree attended those stakeholder
meetings as an IPANM representative,
but he wore a different hat as the 2024
New Mexico legislature began. When
Representative Greg Nibert, R-Roswell,
resigned his House seat in January after
being appointed to a vacant seat in the
New Mexico Senate, press accounts note,
the Chaves County, N.M., Board of Commissioners
nominated Hembree for the
House seat. Shortly before accepting it,
Hembree resigned as IPANM president,
and the group turned to Treasurer and
Past President Mitch Krakauskas to serve
as interim president.
" None of it was planned, but the timing
was incredible, " Winchester describes.
" Jared was very forthright about stepping
down during the session to avoid conflicts
of interest. "
During the session, Hembree says he
recalled the stakeholder meetings' antiindustry
slant, and was not terribly surprised
at the stringency in HB 133. " Occasionally,
the stakeholder meeting breakout
sessions-whether they dealt with
freshwater use, setbacks, civil penalties
or other topics-were not even led by
OCD staff members, but by leaders from
an environmentally-focused nongovernmental
organization, " he reports. " That
steers the discussion and shows how these
meetings were about giving the mere appearance
of collaboration.
" When we were discussing the bill in
the House Energy Committee, I had a different
perspective on it from many other
committee members, having seen how
that sausage was made, " Hembree recounts.
" I think the bill ultimately was too much
for too many legislators to swallow. "
Winchester says most lawmakers opted
against the radical proposal. " Thankfully,
a coalition of moderate Democrats and
Republicans showed the administration it
bit off more than it could chew, " he says.
JUNE 2024 39
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