Oct. 23 – The New Mexico Environment Department may have to go back to the drawing board if it wants to increase fees for air quality permits.
The Environmental Improvement Board voted unanimously Wednesday to reject a proposed series of rate increases that the Environment Department said would help strengthen enforcement and staffing amid an increasing caseload.
A few state lawmakers championed the cause, but the answer was still no.
“If this department is better resourced, it will deliver results,” said Rep. Meredith Dixon, D-Albuquerque. In the last fiscal year, she said, “the Department of the Environment collected more than $30.2 million in civil penalties, which exceeds its general fund.”
The need for the increases – the first in about twenty years – is beyond dispute, said board member William Honker. But he and others expressed concern about the lack of justification for the size of the increases and how the additional funds would be spent.
“It’s clearly way too late,” Honker said. “The workload has increased dramatically in the two decades since this rule was last addressed. That said, in terms of what lies ahead… there appear to be some missing links in this record.”
Board member Karen Garcia agreed, calling the rate increase “huge” and pushing “the definition of reasonable.” Garcia also drew attention to a stakeholder process that she said was troubling and felt “rushed.”
“I feel sorry for the staff about what they are dealing with, not enough hands on deck to deal with new regulations, etc.,” Garcia said. “That case is very well made.”
What also wasn’t done very well, Garcia said, was calculating how much money would be generated by the rate increases and exactly what they would finance.
Michelle Miano, director of the Environment Department’s Environmental Protection Division, told The New Mexican that she did not find the stakeholder process inadequate in any way. The process included a notice to individuals and groups affected by the rule change, a public meeting, a public comment period and individual meetings with those who requested it, Miano said.
Still, Jim Winchester, executive director of the Independent Petroleum Association of New Mexico, expressed frustration with the lack of communication and said he was “disappointed” with Wednesday’s proceedings.
Miano said concerns were raised from the industry during the stakeholder process about the higher costs.
The Air Quality Bureau’s request called for a rate increase of $42.53 for every ton of pollution produced, as well as a fourfold increase in filing fees for new buildings that require an air quality permit, among other things.
Early in the meeting, it seemed certain that the board’s unconditional approval was unlikely. But the path forward — rejecting the proposal entirely, amending and approving the rate increases, or asking the Environment Department to come back with additional information — was not initially clear.
Board member J. Barry Bitzer proposed amending the proposal to halve the fee as an emergency measure. That would increase the department’s funding up front, Bitzer said, but it would give more time to answer lingering questions before it earns a second wave of increases.
Others suggested there wasn’t enough information to even consider the proposal with amendments.
Ultimately, the board decided to reject the proposal due to the number of unanswered questions.
Environment Secretary James Kenney told The New Mexican that the department is “optimistic” that the rate increases will ultimately pass, but that it is still evaluating whether to resubmit the proposal with additional information or appeal the decision of the board.
Correcting salaries that are too low and workload that is too high is one of the objectives of the rate increase. But the workforce isn’t the only place where the extra resources end up.
The database used for permitting is a relic of the 1990s, Miano said, and is “in terrible need of upgrades.”
There are also more federal regulations governing the oil and gas industry than the last time fees were increased, Kenney said.
“We are increasing our workload without increasing our workforce,” he said.
That includes an increase of more than 2,000% in the number of oil and gas industry permits over about a decade.
In 2019, the Department of the Environment partnered with the U.S. Environmental Protection Agency and the U.S. Department of Justice to inspect oil and gas operations across the state.
“There was no shortage of violations,” Kenney said. Earlier this year, the department reported that more than half of facilities inspected were not in compliance with volatile organic compound emission limits.
If the state had conducted the inspections independently, Kenney said, they would have collected between $10 and $12 million, which instead would have gone to the U.S. Treasury Department.
These violations could also expose the state to federal penalties, Kenney said, further delaying the already slow wait time for permits.
“I think the piece that concerns me … is that as our air quality continues to deteriorate due to non-compliance with existing standards, largely in oil and gas, this potentially increases federal sanctions against us,” Kenney said .
“If those sanctions were to come,” he added, “we would certainly not be able to maintain the number of permits required. This would be one of those situations where we would have to stop issuing permits within this sector for a period of time. until we could meet those federal regulatory requirements.”
