Interim Watch: Uranium Industry Makes Big Pitch to Resume NM Mining Operations

By Charlotte Chinana

As state officials look for ways to stimulate New Mexico’s economy and create more jobs, supporters of efforts to restart uranium mining operations in the state were handed a stage to make their pitch to legislators at this week’s meeting of the Economic and Rural Development Interim Committee in Grants.

And according to a panel devoted to the subject, prospects for the industry couldn’t be rosier as their key following talking points did attest:

  • New Mexico’s uranium reserves are among the richest in the nation – 2nd only to Wyoming;
  • The nuclear energy industry’s safety record is the “Best of any industry in the history of the world;” and
  • “The future is fairly optimistic for uranium (mining) in New Mexico”

New Mexico’s uranium rich reserves

According to the industry speakers, New Mexico has one of the richest uranium deposits in the United States, which “creates a lucrative opportunity to resume mining operations,” projected to “create thousands of jobs.”

“The world demand for uranium would double if the proposed nuclear reactors are built,” said Barbara Brazil, Deputy Secretary of the state’s Economic Development Department. According to estimates from the International Atomic Energy Agency, there are currently 440 operational reactors in the world – 104 of which are located across the United States.

“The U.S. consumes 20% of the world’s energy,” added John Bemis, Secretary-designee of the Energy, Minerals, and Natural Resources Department. “This is the world as we know it today…everybody needs to remember that we need uranium to fuel those nuclear plants.”

Not addressed in any detail were a couple of none too rosy “economic opportunity caveats”:

  • Industry estimates that the state’s uranium reserves will be worth approximately $31 billion dollars are based on economic assumptions that the price per pound of uranium would hold steady at $90 to $100 per pound over a 30 year period. However, a more likely scenario is that the price will fluctuate.  The laws of supply and demand can be a pesky critters. For example, in 2000 the price per pound of uranium was $6 – and as of July 25 of this year, the uranium price per pound was $51.50.
  • Metal mining in the state doesn’t have the best track record in terms of economic stability. According to a 2008 report prepared for the New Mexico Environmental Law Center, the state has been through many copper mining boom and bust cycles, as well as one previous uranium boom and bust cycle (circa 1948 – early 1980s).

Also, another hardly insignificant issue touched on with regard to NM’s uranium reserves was the potential jurisdictional issues that can arise. Some of “the state’s” uranium deposits are located on Indigenous lands.

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Interim Leg Watch: Energy Industry Wants Less Regulations, More Incentives

By Charlotte Chinana

“You’re preaching to the choir…we need to put people back to work – we need to put people back in [the] uranium mines.”

~ Sen. David Ulibarri (D – Grants) commenting on (while simultaneously commending) presentations from representatives from the mining, oil and gas industries in NM.

The interim Economic and Rural Development Committee recently held their July meetings (in Tucumcari and Santa Rosa), and I had the opportunity to take a little “legislative road trip” to sit in on a couple of agenda items – namely the “Energy Panel: Update on Projects, Tax Incentives and Laws and Regulations That Are Helping or Hurting Industry,” and the “Oil and Gas Energy Report.”

During the committee hearing, industry panelists took a moment to mention what their companies have done and/or will do for New Mexico – with regards to the number of jobs created and payments made to the state (by way of taxes, fees and royalties); they also spent the bulk of their presentations outlining what the state can (additionally) do for industry – specifically related to relaxing (if not entirely eliminating) regulations, while providing more incentives to do business in the state.

The Energy Panel Updates

Representatives from two of the state’s utility providers, Xcel Energy (an electric and natural gas company that operates in eight states – including NM), and Tri-State Generation and Transmission Association (a wholesale electric power producer/supplier that serves 44 rural electric cooperatives and public power districts in four states – with 12 in NM), spoke extensively about the reliability of service provided by their companies, as well as the importance of cost containment measures.

While each highlighted the need to keep and utilize a diverse energy portfolio, it was stressed that the companies pretty much only added solar and wind, because they were mandated to do it.

Sonia Phillips, the NM State Affairs Manager from Xcel Energy, noted the cost difference in terms of solar production, using the example that it costs her company about 13 cents to generate a kilowatt of solar, vs. 2 or 3 cents to generate that same kilowatt – using coal. Phillips also said that some “basic, good incentives” would be nice which, according to a handout from her company, would include:

  • Expedited permitting;
  • Transmission cost recovery riders;
  • Clean energy improvement riders; and
  • Less regulatory lag (as regulatory lag increases investment risk)

Sen. Clinton Harden (R – Clovis) asked if NM’s current electricity demands were being met, to which Phillips replied “yes,” and elaborated that utility companies in the state are meeting the demand “92% of the time.”

Phillips then when on to mention that her company has “customers who want power when they want it” – as part of a pitch for an investment in infrastructure modifications to the power grid/s that the state uses (which were built in the 70s), and that “customers have been able to enjoy low rates for over 35 years” – related to possible, future rate increases.

Rhonda Mitchell, from Tri-State Generation and Transmission Association, added that her company was doing what it can to educate their co-op members about the rising cost of energy production and transmission (i.e. why customers can expect to pay more), though it was unclear as to whether or not said education equally emphasizes energy conservation.

As for the reliability factor, she added that:  “Sometimes, we do too good of a job in being reliable … people [can] take it for granted.”

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Sin of Emission on Earth Day – Good Friday Edition

In celebration of Earth Day 2011, here’s a story courtesy of the Natural Resources Defense Council:

For Earth Day, Steve Hayward of the American Enterprise Institute posted this shocker:  “Energy Fact of the Week: Sulfur Dioxide Emissions from Coal Have Declined 54 Percent.”  He includes some nice government charts…

But from Hayward’s blog, you’d think this happened by itself!

The chief causes of this decline are technology—cost-effective “scrubbers” to remove sulfur dioxide from the waste stream—and resource substitution: we started using much more low-sulfur coal from the western United States.

No mention of the Clean Air Act’s acid rain program – the limits on sulfur dioxide emissions established in the 1990 Clean Air Act.  Without the Clean Air Act’s pollution limits, this scrubber technology and switch to lower-sulfur coal would never have happened.  Why install pollution controls or use cleaner fuels if you can dump all your pollution in the atmosphere for free?

Sounds like the corporate hacks at AEI are more adept at scrubbing history than scrubbing emissions. Wouldn’t want to let actual facts get in the way of the prime narrative denying government’s necessary role in protecting public health and enforcing the rules of the road for free market capitalism in all its majesty.

It’s about “promoting the general welfare” for those of us with a constitutional bent.

All of which reminds us of a light bulb joke, free market fundamentalist edition.

Question:  “How many free market economists does it take to change a light bulb?”

Answer:  “None. They wait for the invisible hand to do it.”

And in related news, check out today’s excellent post on DFNM:

Four Corners Power Plan Leads Nation in Smog-forming Pollution

Happy Earth Day, y’all.

Join Prosperity Watch in Publicly Shaming PNM’s Overpaid Execs

By Tracy Dingmann

Outrage over the Public Service of New Mexico’s plan to raise rates on New Mexico customers while paying its top executives millions has prompted one local group to form a “Shame Campaign” against PNM.

Prosperity Works, a nonprofit that works to bring energy efficiency and economic stability to New Mexico families, recently launched the campaign after the Albuquerque Journal reported that PNM’s new top executive, CEO Pat Vincent-Collawn received a $1.22 million bonus in addition to her $550k salary, for a total compensation of $1.7 million.

The company’s other top four officers received bonuses ranging from $166,466 to $525,466, and the chairman of PNM’s board was paid $1.2 million, for a total of about $ 5 million in bonuses.

This news comes approximately one month before PNM’s hearing before the Public Regulation Commission regarding its request to raise New Mexico’s rates by $85 million, as well as charge an additional $20 million in fees and riders.

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Another One Of Those Small Business-Friendly Tactics?

By Tracy Dingmann

A bill that would bar the New Mexico Environmental Improvement Board from making any greenhouse gas rules that are more stringent than federal law is making its way through Senate committees.

The bill, SB 489, sponsored by Clinton Harden, (R-Clovis), would not reverse the two carbon cap proposals that were approved in the waning days of the Richardson Administration. Those proposals drew strong opposition from the oil and gas industry and from Gov. Susana Martinez, who vowed during her campaign to reverse them if elected governor.

(A few weeks ago, Clearly New Mexico learned that Gov. Martinez had appointed a Small Business-Friendly task force filled with representatives of the oil and gas industry and other large corporate interests to evaluate regulations like the carbon caps. The group made it clear that rolling back regulations was their number one priority, and discussed a number of strategies to accomplish this that included legislation, executive orders, and other tactics.)

Though SB 489 wouldn’t reverse the current caps, it would severely hamper New Mexico’s ability to protect its environment in the future, opponents say.

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Are You Sitting Down? Here Are The Recommendations From The Gov’s “Small Business-Friendly” Task Force

Gov. Susana Martinez

By Tracy Dingmann

When Gov. Susana Martinez wrote an executive order on Jan. 1 halting all pending state regulations and creating a “Small Business-Friendly Task Force” to review them, the group had 90 days to come up with a plan.

Ostensibly, the task force was to consider each regulation and rule on its merits and then submit a fair and balanced report to the governor by April 1, detailing which rules the state could keep or scrap.

Except that’s not what’s been going on.

Meeting in Secret, With an Agenda

The members of the “Small Business-Friendly Task Force” were named in secret and have been meeting in secret. Only by filing an open records request under state law have we been able to find out who is on the task force and what it is meeting about.

Through documents gained from our request, we learned the task force does not represent New Mexico’s small business community. Instead, it is packed with large-business people and lobbyists from industries that gave big to the Martinez campaign – and who have been fighting back hard against pending state regulations.

The internal documents show members were never inclined to keep any of the regulations – in fact, they are focused on devising tactics the Martinez administration can use to eliminate each one.

The Mid-Point Report

Our request turned up one particularly fascinating document – a “mid-point report” dated Feb. 18 that, based on its unguarded language, was decidedly not intended to be shared outside the Gov’s office.

From the preamble:

“The task force does not wish to present a laundry list of problems to the Governor but develop solutions (sic). The goal is to provide the Governor and/or agencies cover when repealing or revising a rule or regulation thus avoiding litigation if possible.

The final report to the Governor will include a road map of short and long-term tactics and strategies, including the use of executive orders and legislative strategies. Each troublesome regulation identified will be accompanied by a recommendation on the best way to remove their negative impacts (sic).”

The report says the task force decided to focus on two areas of regulation: construction and the environment. Specifically, the task force wants to focus on regulations in the Environment Department, the Energy, Natural Resources and Minerals Department and the Division of Game and Fish, as they are “having the most impact on economic development and the will determine (sic) the best approach to rescind or revise the troublesome rules/regulations.”

Singled out as examples of “onerous legislation” are the “Pit Rule” and the “Enforcement and Compliance Rule,” both of which apply to and have been extremely unpopular with the oil and gas industry in New Mexico.

Here’s what else is in the report:

  • The task force doesn’t want New Mexico to do any more than what’s required by the federal government.

From the report:

“The first motion of the Small Business Task Force was to propose that state rules and regulations across the board be no more stringent than federal requirements and to correct any rule or regulation that requires more regulation than federal standards.”

  • The task force recommends that the Economic Development Department develop a secret “whistleblower complaint log and phone-based hotline” for businesses who want to complain privately about NMED enforcement of rules and regulations.

From the report:

“Companies often do not want to be seen as “troublemakers” by filing public complaints. If they do have complaints about NMED, this would ensure that companies would have confidentiality if they make complaints about departmental policies or practices through the whistleblower program. The EDD Office of Business Advocacy would administer this program and investigate complaints.”

  • In what sounds awfully ominous for mid-level classified employees, the task force says it has found that even in cases where exempt department heads have been removed, those pesky classified employees who have to actually enforce the rules (and who can’t be fired without cause) are undoubtably going to let their “anti-business agenda” stand in the way of the kind of rollback they are looking at. The task force plans to come up with ways to “mitigate” that, the report says.

From the report:

“Beyond changing a rule or regulation is the enforcement and handling of regulations and rules, particularly with permitting, by mid-level classified employees. An overarching theme we have observed is working with mid-level classified managers at NMED and other departments who still have an anti-business agenda despite changes in leadership at the department level. The committee is looking for ways to mitigate this situation.”

What Else?

Here are the other recommendations from the task force:

  • Removing New Mexico from the Western Climate Initiative, a group which advocates for a coordinated Western effort to reduce carbon emissions.
  • Removing the New Mexico only “cap-and-tax.” This refers to a set of carbon emission rules that the state adopted late in the Richardson administration after an advisory board considered nearly two years worth of public and expert testimony.
  • Working with other western governors to “delay the adoption of new air standards.”
  • Having the New Mexico Environment Department develop a fast-track environmental permit process to mitigate complaints from businesses
  • Repealing, modifying or replacing the regulatory amendment implementing the collective bargaining wage rate scheme for prevailing wages provided for in 2009 amendments to the Public Works Minimum Wage Act, also known as SB 33.
  • Looking at state building codes to identify ways to “bring compliance back down to the levels of international code.”
  • Combining and reducing the number of construction permits required.

Public Records Request Shows Gov’s “Small Business-Friendly Task Force” Met In Secret; Is Packed With Lobbyists for Oil and Gas, Mining and Dairy

Gov. Susana Martinez

By Tracy Dingmann

When Susana Martinez assumed the office of Governor on Jan. 1, she faced a clear choice. Would she protect New Mexico’s clean land, water and air by fighting to keep environmental regulations strong – or would she instead focus her energies on stalling, relaxing and eliminating regulations for certain wealthy, mostly out-of-state industries who contributed generously to her campaign?

New Mexico’s new Governor chose the latter course. Minutes after she took office, Gov. Martinez issued an executive order that halted all pending or proposed rules and regulations for 90 days and created a “Small Business-Friendly Task Force” to evaluate the rules for their “workability and reasonableness and (to) determine whether they are proper and necessary.” During the next 90 days, she said, the task force would decide which rules hampered small businesses in New Mexico.

Details were scarce about how Gov. Martinez defined “small business,” but in her State of the State speech, she spoke of wanting to help “mom and pop shops:”

“The big corporations have teams of lawyers and accountants to help them. It’s the small businesses – the mom and pop shops – the small start ups that get lost in the layers of red tape. We will help them, and in doing so, send a loud and clear message that New Mexico is open for business.”

At the 45-day mark with no word from the Governor, we started to wonder – How was that “Small Business-Friendly Task Force” coming along? Who’s on it, and when has it met? What has it discussed and what kind of changes is it looking to recommend?

We asked the Governor’s office nicely, but got nowhere, so we were forced to file an Inspection of Public Records request to get the answers. (More about that later).

This Is Small Business?

The list of members provided by the Department of Economic Development shows that the Governor’s “Small Business-Friendly Task Force” is dominated by long-time lobbyists for large corporations, including big dairy, which contributed thousands of dollars to Martinez’s campaign; and the oil, gas and natural gas industry from in and outside the state, which gave her hundreds of thousands. Both industries have huge economic stakes in keeping New Mexico regulations at bay.

The companies represented by lobbyists on the “small business” task force include oil and gas producers and distributors from Oklahoma, Texas, Arizona and Colorado; copper, gold and uranium mining companies from Arizona; a payday loan company based in Georgia and a giant tobacco company from North Carolina.

The seven lobbyists on the task force are:

TJ Trujillo

At the Roundhouse, Trujillo represents Biotechnology Industry Organization, BP America, Inc., Community Loans of America, Inc., County of Grant, Dairy Producers of New Mexico, Dell, Inc., El Paso Corporation, Freeport-McMoran Copper and Gold, Gallagher and Kennedy, PA, Hewlett-Packard Company, Hunt Transmission Services, New Mexico Off Highway Vehicle Alliance, Occidental Petroleum Corp., DBA Occidental Permian LTD, OXY USA Inc., RAI Services Company (Formerly Reynolds American Inc.), Ruidoso Downs Racing, Inc., Ruidoso Jockey Club and State Farm Insurance Companies.

Here’s some help deciphering his client list:

  • Biotechnology Industry Organization is a Washington, D.C – based company that refers to itself as the world’s largest biotechnology organization.
  • BP America is a Houston-based oil and gas company (yes, that BP).
  • Community Loans of America is an Atlanta-based payday loan company.
  • Dairy Producers of New Mexico represents farms in New Mexico – a state which has some of the largest and most dense factory farms in the nation. Trujillo and the dairy group came under fire earlier this year when emails showed Trujillo, an attorney, and Walter Bradley, a former Lt. Gov and fellow lobbyist for the dairy association, were involved in helping write the executive order halting the regulations and creating the task force to review them.
  • The El Paso Corporation owns North America’s largest natural gas pipeline system and is one of North America’s largest independent natural gas producers. It is based in Colorado.
  • Freeport McMoran is an Arizona-based mining company that is the world’s largest producer of copper, gold and molybdenum and the leading manufacturer of copper strip, cadmium copper, copper wire and bars.
  • Hunt Transmission Services is a Dallas-based company that develops and acquires electric and pipeline transmission and distribution assets.
  • Occidental Petroleum is a Houston-based oil and gas company.
  • RAI Services Company (formerly Reynolds American) is a North Carolina-based tobacco company.

Karin Foster

At the Roundhouse, Foster represents Chesapeake Energy Corporation, Energen, Independent Petroleum Association of New Mexico, KFoster Associates, Shell Oil Company and Shell Wind Energy.

  • Chesapeake Energy is an Oklahoma-based producer of oil and natural gas – the country’s second largest.
  • Energen is a Farmington-based oil and gas company.
  • Shell Oil Company is a Houston-based oil company.

Minda McGonagle

At the Roundhouse, McGonagle represents: Ajinomoto Food Ingredients, American Council of Life Insurers, National Federation of Independent Business, Neutron Energy, Inc., New Mexico Chapter/American Subcontractors Association, Veterans and Fraternal Non-Profit Clubs of New Mexico, Inc.

  • Ajinomoto Food Ingredients is a company based in Chicago.
  • The American Council of Life Insurers is a lobbying group based in Washington D.C.
  • The National Federation of Independent Businesses is based in Nashville.
  • Neutron Energy is a privately held uranium exploration and development company based in Arizona.

Carla Sonntag

Sonntag represents the National Utility Contractors Association of New Mexico, New Mexico Business Coalition and the New Mexico Utility Shareholders Alliance.

Caren Cowen

Cowen represents the New Mexico Cattle Growers Association and the New Mexico Wool Growers.

Gary Tonjes

Tonjes represents Albuquerque Economic Development.

Roxanne Rivera-Wiest

Rivera-Wiest represents Associated Builders and Contractors, Inc., New Mexico Chapter.

Not Exactly `Mom and Pop

The non-lobbyist members of the task force are as follows (no offense to these folks, but I don’t see any “mom and pop shops” here, either):

Frank Yates: Past president of Yates Petroleum
Anna Muller: Albuquerque landlord and business owner
Perry Bendicksen: Albuquerque venture capitalist
Sarah Chavez: Director of sales and marketing at El Pinto Foods in Albuquerque
Dale Dekker: Albuquerque architect
Brent Eastwood: George Mason University professor, specializing in domestic policy and international security, and frequent contributor to American Enterprise Institute publications. Albuquerque
Joe DiGregorio: Gallup businessman
Kevin Yearout: Albuquerque mechanical contractor
Linda Kay Jones: Special assistant director of institutional advancement at Western New Mexico University
Robert Castillo: Information unavailable
Tom Hutchinson: Las Cruces restaurant owner
Mike Unthank: Independent management consultant, of Albuquerque
Carol Wight: CEO of the New Mexico Restaurant Association

The rest of the task force is rounded out by Gov. Martinez’s designated cabinet heads, including:

Jon Barela: Economic Development (task force chair)

Demesia Padilla: Tax and Revenue

Dee Dennis: Regulation and Licensing

Ed Burckle: General Services Department

Celina Bussey: Department of Workforce Solutions

Raj Solomon: General counsel at NMED

So Who’s At the Table?

The list of names makes a clear statement about who Gov. Martinez believes should be given a seat at the table of power and influence.

But do these selections match up with her rhetoric?

Here’s a quote from Gov. Martinez, from an interview with KKOB-770 yesterday regarding her philosophy of governing:

“We need to make sure the people are being represented…not the special interest groups that are showing up every day. We need to bring the people into the process.”

Here’s another quote from the Governor, also from yesterday:

“My biggest promise was that I was going to bring the people to the process, and there was going to be more transparency with what was goes on in the Roundhouse. And that includes the committee hearings.”

But apparently not task forces – looks like “the people” were left out of  finding what happened in those – unless they filed an IPRA request.

What Happened At Those Secret Meetings

Thanks to our open records request, we learned that the task force was named and began meeting secretly in February.

Notes taken by an Economic Development Department staffer show the group made no consideration of keeping any of the pending rules or regulations. The notes show that agenda items revolved around which industry wanted what rules rolled back – and how the Martinez administration could accomplish it.

Task force members weighed and discussed all possible tactics the Governor could use to block incoming regulations – repealing a rule, making an executive order, attempting to pass legislation.

Among the documents we received in our public information request was a mid-point report from Feb. 17 that is full of recommendations the task force apparently didn’t want to share with anyone. (We’ll post that entire report later today.) And we still have a request pending for more documents to come from the Economic Development Department, which facilitated the meetings.

Why Secret?

But why were these meetings closed? Similar task forces in the past created by the Governor and chaired by the Economic Development Secretary were held in the open, with meetings announced in advance and conducted around the state in public places with plenty of input from regular New Mexicans.

Sarah Welsh, executive director of the New Mexico Foundation for Open Government, says the the state Open Meetings Act probably does not apply to task forces created by the Governor.  But as one of the state’s leading advocate for transparency in government, Welsh noted that the Open Meetings Act sets a minimum standard for which meetings must be noticed and open to the public.

Welsh said today:

“The Open Meetings Act sets out a broad public policy of openness, stating `it is declared to be public policy of this state that all persons are entitled to the greatest possible information regarding the affairs of government and the official acts of those officers and employees who represent them.’ As our state Supreme Court has put it, openness is the rule and secrecy is the exception.”

Makes you wonder what this task force is trying to hide.

You’ll find out exactly what in our next post, when we share the recommendations from the task force’s midpoint report.

PNM Settlement on Rate Hike Rejected

By Tracy Dingmann

The New Mexico Public Regulation Commission has refused to accept a utility rate hike settlement proposed by PNM that some groups called secretive and unfair.

The PRC acted Feb. 17 to reject the settlement, which would have allowed PNM to raise rates by almost eleven percent.

That settlement had been strongly opposed by New Energy Economy and other parties on various grounds including legality, due process and adequate public notice.

In its action yesterday, the PRC said it would only consider an uncontested settlement or stipulation when considering a future rate hike.

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Claus’s Recap of Week Four

By Claus Whiteacre

It was the week that wasn’t.

A senator introduced a “zombie bill” to once again try to kill greenhouse gas emission rules. Harrison Schmitt withdrew his name from consideration as Secretary of the Energy, Minerals and Natural Resources Department. Uranium boosters and conservation advocates united to defeat a uranium-mining bill. And the week culminated with the Rev. Al Sharpton addressing a joint session as part of the annual African-American Day at the Legislature.

Immigration Issues

The week kicked off Monday with a sizable immigrant rights rally at the Capitol to protest Gov. Susana Martinez’s executive order mandating inquiry about immigration status of criminal suspects and her plans for legislation to revoke driver’s licenses for undocumented immigrants.

The first of the bills to strip immigrants of licenses, HB 261, died Thursday in a House committee.

Rep. Andy Nunez, (I- Hatch) has announced that he will sponsor HB 78, which, in addition to containing language similar to HB 261, also includes a measure to cancel existing licenses that have been issued to illegal immigrants.

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Down Low Dealings at PNM Regarding Rate Hikes

By Tracy Dingmann

Six local watchdog groups have filed statements in opposition to PNM’s plan to raise rates for electric service in New Mexico, saying the company negotiated the rate hikes in secret and without input from customers and other parties opposed to the rate hike.

The state’s largest electric utility had announced recently that it would seek a rate hike of as much as 25 percent on residential customers.

Subsequently, executives from PNM, along with members of the Public Regulation Commission and staffers from the office of the New Mexico Attorney General carried out negotiations regarding the rate hike and came up with a figure that appeared much lower.

Now representatives from six citizen’s advocacy groups say the groups negotiated the hike behind closed doors and did not take input from the people who will most be affected – the customers. The groups also say the negotiated agreement contains measures that will make it very easy for PNM to charge customers more again in a few short years.

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