February 17, 2021 Read More →

Coal’s decline offers lessons for New Mexico oil and gas industry

High Country News:

Satellite images of the land outside Artesia, New Mexico, show an arid brown landscape pockmarked with dots. Zoom in a bit, and a semiregular grid pattern appears, which could be mistaken for a suburban development. Zoom once more and the truth becomes clear: oil drilling sites, thousands of them. Each of these wells will one day need to be cleaned up: the borehole plugged and the land restored. When abandoned, wells like these will leak methane and other pollutants into the atmosphere for years.

More than 1,500 miles east and north of Artesia, among rolling hills of Appalachia, there are streams tinged orange by acid mine drainage and mountaintops flattened by companies seeking the hard, black coal seams underneath. Many of these companies are now bankrupt, or shadows of their former selves, while the industry’s legacy persists in billions of dollars in cleanup costs.

Petroleum replaced coal as America’s fuel of choice and, in coal’s decline, oil and gas may catch a glimpse of its own future.

Beyond the budgetary dependence, coal’s cautionary tale for New Mexico extends to corporate behavior as market share declines and environmental obligations and reclamation costs kick in. New Mexico stands today, in its relation to oil and gas, approximately where coal states like Wyoming were a little more than a decade ago, says Clark Williams-Derry, an energy finance analyst with the Institute for Energy Economics and Financial Analysis.

He cautions that the oil and gas industry’s decline will not be the same as coal’s – which he compares to “Wile E. Coyote running off a cliff.” But, he says, “when it comes to corporate inability and unwillingness to meet their cleanup costs, there are worrying similarities between the two extraction industries. 

[Nick Bowlin]

More: Will New Mexico learn from coal’s decline?

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