FARMINGTON — Farmington city council tabled a resolution Tuesday night that Mora County officials and environmentalist say is overreaching.

The resolution supports proposed state legislation that would cut oil and gas drilling royalties to cities and counties that pass laws or regulations restricting the industry. The body unanimously postponed the vote late Tuesday night and is scheduled to take the measure up during its Feb. 4 work session to refine the resolution's language.

"I think that it's an important message to the people of New Mexico," Councilor Jason Sandel said.

Sandel, who is Aztec Wells Service's executive vice president, requested that the city's legal department draft the resolution supporting a bill state Sen. Bill Sharer introduced in 2010 that did not pass and other similar efforts. The council unanimously supported Sandel's request.

Sandel proposed amending the bill in Tuesday's meeting, suggesting the addition of, among other things, a reference to a Feb. 6 letter 30 members of the New Mexico House of Representatives sent to Gov. Susana Martinez on the same topic. The letter asked Martinez to "give careful consideration to capital outlay projects located in those counties or municipalities that have voluntarily restricted the extraction industries."

Mayor Tommy Roberts also wanted the resolution revised.

The state generates millions of dollars from the oil and gas industry, and that money funds state-wide capital construction projects, Sandel said.

New Mexico collects taxes on oil, gas and other natural resources extracted from the earth. These are called "severance taxes," and they repay severance tax bonds. The bonds are issued for those state-wide projects.

A pump jack is shown off of Navajo Dam Road on Tuesday near Aztec.
A pump jack is shown off of Navajo Dam Road on Tuesday near Aztec. (Megan Farmer/ The Daily Times)

Sandel said the counties of Santa Fe, San Miguel and Rio Arriba have taken stances against oil and gas development. Also, Mora County, in late April, banned drilling within its borders. Sandel said the resolution is an effort to explain to those counties — which benefit from severance tax bonds — why the oil and gas industry is important.

Sharer said counties benefiting from severance tax bonds should agree to participate in generating the severance tax revenue.

Sharer said his bill targeted counties that enact ordinances and regulations so "onerous" they prohibit local drilling.

Sharer's bill, for example, would have prevented Farmington from receiving its severance tax bonds if the city banned or heavily regulated local drilling. In the past three years Farmington received $2.7 million from severance tax bonds for its new animal shelter, Administrative Service Director Andy Mason said.

The city's resolution shares the same intent as Sharer's bill, Sandel said.

"It's communities that are looking to ban or significantly restrict this activity (oil and gas development) that I'm most interested in sending the message to," Sandel said.

Farmington's resolution identifies governments that "chose to enact ordinances and regulations that discourage oil and gas exploration and producing." But Eric Jantz, a New Mexico Environmental Law Center staff attorney, said Farmington's resolution supports bills that would allow the state to cut severance tax bonds to any county that create oil and gas regulations.

"I think that's the point," said Jantz, who is representing Mora County in federal district court on a lawsuit filed against the county's drilling ban.

Sandel said that isn't the intent of his resolution.

San Juan Citizen's Alliance Staff Organizer Mike Eisenfeld said he questions whether Farmington is overstepping its authority. His organization campaigns to protect San Juan Basin's environment and character, according to its mission statement.

Mora County passed its ordinance banning drilling within its boundaries to protect its water, air and land, County Commission Chairman John Olivas said. According to the ordinance, residents of the county understand "water is essential for the life, prosperity, sustainability and health of their community," and contamination of the water would cause "great tangible loss."

Farmington and other cities and counties interfering with severance tax bonds throughout New Mexico is unfortunate, he said.

Sharer said on Monday that the oil and gas industry is "clean and safe." But Jantz said that is not always true and regulation is necessary.

Dan Schwartz covers government for The Daily Times. He can be reached at 505-564-4606 and Follow him @dtdschwartz on Twitter.