New Mexico Attorney General Hector Balderas’ political moves to build environmental credentials by suing the Trump administration repeatedly are endangering his state’s economic recovery, according to concerned business leaders, including at least one statewide advocate.
“Balderas is impairing the state’s ability to produce the revenue that we need,” said Carla Sonntag, president and founder of the New Mexico Business Coalition. “Oil and gas contributed $1.6 billion dollars in revenue to the state last year.”
Among the actions that have the business community concerned was Balderas’decision in early August to join 15 of his Democratic colleagues from predominantly coastal states to sue the Environmental Protection Agency over delays in designating areas to be in “non-attainment” with the 2015 ozone standard.
“Our state is in a financial crisis,” said Sonntag. Gov. Susana Martinez this year called a special session to avert a state budget crisis and balance the $6.1 billion budget for fiscal year 2018. Two years ago, New Mexico’s coffers held a $700 million reserve before weak oil and natural prices led to losses in tax revenue.
Balderas did not return a Western Wire email request for comment.
Oil and gas-related revenue is critical to the health of New Mexico’s budget, accounting for approximately a quarter of state revenue.
The state’s share of nearly half of a September 2016 Bureau of Land Management oil and gas lease sale was held up for months by anti-fossil fuel activists. The release of nearly $70 million in BLM lease revenue helped ease the state’s budget concerns.
Sonntag told Western Wire that Balderas’ decision to join lawsuits, such as the one targeting the EPA’s ozone rule, would hurt the state going forward, jeopardizing the slim recovery it has made since the recession. She said such actions threaten a vibrant oil and natural gas industry that not only will bring jobs and economic growth back to the state, but that contributes so heavily to the state’s bottom line.
“[It] doesn’t make sense for the business or the citizens of our state,” said Sonntag. Joining in those lawsuits, Sonntag said, is impacting New Mexico’s economic and business outlook, she said.
This is not the first time that Balderas has partnered up with other Democratic attorneys general to pursue strict environmental regulations. He continues to be an advocate of the “Green 20,” a group of state attorneys general that includes New York’s Eric Schneiderman and Massachusetts’ Maura Healey, who are focused on combatting President Trump’s efforts to roll back or review some of the Obama administration’s environmental policies.
Balderas acknowledged the importance of oil and gas leases in April when he, along with California Attorney General Xavier Becerra, sued the federal government over a mineral leasing valuation rule repeal he said threatened the state’s students.
Balderas said a change in royalty payments would “deny New Mexico’s public school students the royalties they are owed.”
Western officials speaking to Western Wire had applauded the Trump administration’s repeal of the valuation rule that the previous administration revised despite opposition throughout the West.
Caren Cowan, executive director of the New Mexico Cattle Growers’ Association, told Western Wire in August that it was “important to us that we have a vibrant energy industry for us and the nation.”
Shutterstock / Sherry Talbot
The amount of money at stake helped make the oil and gas mineral valuation a contentious issue. According to the Office of Natural Resources Revenue, New Mexico received $369 million in fiscal year 2016 from “[energy] revenues collected from oil, gas and solid mineral production on federal lands within their borders.” The state has received $470 million in royalties per year since 2008, according to the lawsuit.
Balderas has drawn the ire of New Mexico Land Commissioner Aubrey Dunn (R) for supporting federal restrictions in the BLM’s venting and flaring rule in late 2016, with Dunn saying it appeared the attorney general’s environmental outlook “is clearly more at home in California than it is in New Mexico.”
“It is clear that Attorney General Balderas is politicizing the issue and doesn’t have the best interest of the state at heart,” Dunn told Western Wire in January.
Balderas is the only attorney general representing a Mountain West state to have joined the ozone lawsuit, working with a coalition of Democratic attorneys general that included the Northeastern states of New York, Connecticut, Massachusetts, Vermont, Rhode Island, Maine, Delaware, and Pennsylvania; the District of Columbia; California, Washington and Oregon on the Pacific Coast; and the Midwestern states of Minnesota, Illinois and Iowa.
Balderas maintained he was trying to “protect the citizens,” in a statement announcing his decision. Balderas also signed on to a May lawsuit against Interior Secretary Ryan Zinke over coal leasing.
“Protecting the health of New Mexico families and seniors, our fragile economy and our beautiful natural environment is critical especially at a time when President Trump continues to roll back regulations that protect New Mexico,” Balderas said. “I filed suit against President Trump’s EPA to protect the citizens and economy of Doña Ana County and all of New Mexico.”
EPA had announced in June that it would delay implementation of its 2015 ozone standards but rescinded the one-year delay in August after the lawsuit was filed.
New Mexico’s participation in the lawsuit was notable, as the Western region faces the most difficulty in complying with ozone standards due to climate and location, and the 2015 ozone rule itself drew strong bipartisan opposition. The press release announcing Balderas’ involvement in the suit singles out the state’s southern Doña Ana County as facing high levels of pollution, but acknowledges that the elevated ozone levels are a result of smog traveling from neighboring El Paso, Texas, and Mexico.
A non-attainment designation requires states to implement new actions to reduce pollution within its borders and ensure more stringent air standards are met in the designated areas.
U.S. Environmental Protection Agency
During debate over the 2015 ozone standard, several prominent Democratic voices warned against implementing too stringent a level, including Colorado Gov. John Hickenlooper and AFL-CIO St. Louis Chapter President Patrick J. White.
“I’m still very concerned,” “I’ve heard (from) both sides that there isn’t sufficiently clear evidence that this is a significant health hazard,” Hickenlooper told CBS Denver in 2015. “So when you’re at 5,000 feet your ozone challenges are significantly more difficult,” said Hickenlooper, noting the role elevation plays in ozone non-attainment.
But Hickenlooper suggested that the states could work on ozone attainment, no matter what the EPA or courts decide.
“The delay of the 2015 standard will not deter our efforts to move toward compliance with the 2008 standard,” Hickenlooper told Western Wire in June.
Balderas disagreed, justifying his state’s inclusion on the EPA lawsuit.
“That is why, despite enacting stringent in-state controls on sources of these pollutants, many states – including New Mexico – are not, alone, able to meet federal health-based air quality standards for smog,” he said.
The challenges associated with achieving compliance with the 2015 ozone standard could mean curtailing transportation, manufacturing, or other business activities, which could cost the state billions of dollars and thousands of jobs, state officials and business leaders have said. However, since most pollution originates outside its borders, strict in-state actions taken by New Mexico alone will not be enough to meet the federal air quality standards for smog, a fact that Balderas’ office admitted. If New Mexico is still unable to comply on its own, then the EPA will impose strict standards and penalties for non-attainment.
“It’s a big, big issue,” Ryan Flynn, then the state’s environment secretary, told the Albuquerque Journal in 2015. “As federal regulators, it’s wrong for them to subject people to standards that we can’t meet. It’s like asking someone to go out and run a two-minute mile.”
Democratic attorneys general, including Schneiderman and Illinois’ Lisa Madigan, spoke this week at New York University’s School of Law as part of the school’s new State Energy and Environmental Impact Center that received nearly $6 million in support from Bloomberg Philanthropies, the charity of billionaire environmentalist and former New York City Mayor Michael Bloomberg.
The legal center will provide “legal, analytical and communications tools to boost coordination among state officials” and will be run by David Hayes, according to E&E News. Hayes served as deputy secretary and chief operation officer at the Interior Department under both the Clinton and Obama administrations.
The Green 20 launched in 2016, when Schneiderman, along with former Vice President Al Gore and several other attorneys general, started AGs United For Clean Power. Balderas was a founding member and the only attorney general from a Western state — and one so dependent on natural resources — to join.
“We have been impacted by climate change, and we see its drastic effects in New Mexico — extreme drought, increased risk of severe forest fires, and the ruin of our wildlife and natural habitats,” Balderas said in a statement last year. “Our efforts will ensure that progress is made on climate change and that the public is fully aware of the effects on the health and well-being of New Mexico families.”
The Competitive Enterprise Institute’s Myron Ebell, who served as the Trump administration’s transition team lead for the EPA, told Western Wire that the New Mexico attorney general’s actions could harm the state’s important natural resource development and associated revenue.
“Balderas is from a state with a lot of energy production, and he’s signed on to putting those people out of business,” Ebell said. “New Mexico couldn’t exist without oil and gas revenues.”
