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Behind Yesterday’s Walkout: The Facts

By Claus Whiteacre

Rep. Don Bratton (R-Hobbs) led an exodus of Republicans from the House Energy and Natural Resources Committee on Monday after two experts invited by new committee chair Rep. Brian Egolf (D-Santa Fe) gave a presentation on the impact of rules and incentives on New Mexico’s oil and gas industries.

Egolf had arranged for the presentation by the experts listed below:

Kim Sovig, a Research Associate Professor at the UNM School of Architecture and Planning. He is widely published on sustainable development and construction techniques, focusing on clean energy and water resources as they relate to land use.

Betsy Siwula Brandt, who has a 20 year career in the oil & gas industry ranging from exploration geophysicist to exploration and production manager for Exxon, both domestically and internationally. Her primary emphasis is on how best management practices and technological advances drive industry.

The drama started during a question and answer period after the presentation, as presenter Kim Sorvig started to answer a question from committee member Rep. Al Park (D-Albuquerque).

Bratton inserted himself questioning the credentials of the presenters in regard to petroleum engineering.

Then Bratton himself was interrupted by Egolf, who said, “Rep. Bratton, Rep. Park has the floor, and you have not been recognized by the chair. You were offered the opportunity to present your own expert witness, but have not done so.”

The Republican exodus followed (read more here.)

After the Republicans left, Egolf apologized to the presenters for the rude behavior.
Then he explained to the members of the audience that the Republicans were
given the option early last week of choosing their own experts to testify at the meeting.

The presentations themselves shed some interesting facts about the oil and gas industry in New Mexico – mainly, that neither rules nor incentives  impact production significantly.

Here were some highlights from the presentation:

• The number of active rigs at any given time can be correlated to
global pricing of crude oil. The higher the price, the more rigs are
pumping.

• The relatively steady decline in total yearly oil production is
consistent with conventional oilfields reaching the end of their
productivity.

• The Pit Rule took effect after the 2008 crash had begun. Subsequently, as
global prices increased, so did rig count.

• There are currently 27 different state incentives for the oil and gas industries.

• While incentives to the industry increased annually and more than
doubled from the 2004 to 2010 period studied, production did not
increase and revenue to the state declined.



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