The oil and gas industry in New Mexico is typically seen as a pariah by progressive minds because of the impact that drilling, fracking and transportation have on the environment and overall health of the general community. In fact Governor Michelle Lujan Grisham’s goal to have all publicly regulated utilities transition to solar and wind for carbon-free electricity by 2045 can’t come fast enough for some folks. It’s easy for one to sit back and highlight all of the oil industry’s negatives. On the other hand, it’s also hard to deny the positives that have come about as a result of New Mexico’s deal with the devil. The introduction of fracking, horrible as it may be, has breathed new life into southeastern New Mexico’s Permian Basin and helped to keep New Mexico’s economy alive as a result. The ability to extract oil from the ground has led to the creation of thousands of jobs and has been a financial windfall for our struggling state.
While 2020 saw lower commodity prices for much of the year, record production of oil and natural gas led to the second-highest revenues ever reported. A 2020 report published by the New Mexico Tax Research Institute (NMTRI), a nonprofit and nonpartisan organization dedicated to the factual research and analysis of New Mexico’s tax policies, stated that oil and gas revenue for the state reached $2.8 billion in the 2020 fiscal year. That amount, to put it in perspective, accounts for 33.5 percent of New Mexico’s state budget and has accounted for 32.5 percent of the budget over the past decade.
“The oil and gas industry is committed to New Mexico and will continue to deliver the resources New Mexicans depend upon,” said Ryan Flynn, president and CEO of the New Mexico Oil and Gas Association (NMOGA), a coalition of oil and natural gas companies, individuals and stakeholders. In their analysis of the report provided by the NMTRI titled “Fueling New Mexico” (and which they also commissioned), the NMOGA highlights local and broad-reaching impacts of oil and gas revenues on the state. Indeed the revenues generated by oil and gas collection provide funding for schools, infrastructure, healthcare and public safety. From the $2.8 billion generated in 2020, $1.37 billion will go toward funding schools and universities from across the state (about $3,788 per student).
Despite the ambitious clean-energy goals set for 2045, it seems like leaders in local government know a good thing when they have it. In a brief published by Oil Change International titled “Drilling Toward Disaster,” and endorsed by a dozen clean energy organizations, they say that New Mexico’s oil and gas production is expected to grow an additional 85 percent by 2030. Additionally, between 2020 and 2030, over 70 percent of New Mexico’s oil and gas production will come from wells that have not yet been drilled.
These predictions can easily shift, however, with the swearing in of President Biden’s new administration and the appointment of Rep. Deb Haaland as secretary of the interior, a move condemned by the NMOAG for her anti-fracking stance.