Fossil fuel revenue reaches record levels in New Mexico, report says
Dec. 1—The oil and gas sector pumped a record $5.3 billion into New Mexico's state and local governments in fiscal year 2021, according to a report the industry hails as a boon and critics say is further evidence of the state's fossil fuel dependence.
While the governor and some lawmakers have promoted plans to shift the state toward renewable energy in the coming decade to combat climate change, industry executives contend oil and gas will remain a huge revenue source for New Mexico in the foreseeable future.
They pointed to the report by the New Mexico Tax Research Institute as proof.
"Historic revenue equals historic opportunity, and that is great news for teachers and students, critical first responders and healthcare workers, and each and every New Mexican across this state," Leland Gould, CEO of the New Mexico Oil & Gas Association, said in a statement. "For years, New Mexico has cemented itself at the center of the domestic oil and gas production, and the investments being made in our state are paying off in a big way."
Production showed a 37 percent increase over fiscal year 2020, when the market slumped with falling oil prices, putting almost $3 billion into the state's general fund this year — more than a third of that fund, the report said.
In all, the industry added $1.3 billion to education across the state, which is almost a third of the operating budgets, the report said.
The production surge enabled New Mexico recently to surpass North Dakota and place it second in the nation behind Texas.
The report indicated the industry is generating its highest tax revenue amount since at least 2014. And it's more than double the sum of 2016, when the market suffered a severe slump.
The up-and-down trends in recent years show how volatile the market can be. That has led activists and state leaders to call for diversifying the economy to wean it off what they say is fossil fuel dependency.
In a July letter, 16 education, community and conservation groups asked the governor and state lawmakers to establish new revenue sources for schools, so New Mexico isn't overly dependent on oil-and-gas dollars as the fossil fuel industry faces a sweeping energy transition to counter climate change.
State leaders made that argument repeatedly at the New Mexico Climate Summit in October.
"We want to not be in a position where 40-plus percent of our state budget has a single industry," state House Speaker Brian Egolf said at the conference.
One industry group that lauded the report's findings also took a defiant tone.
"These results are made possible by the hard-working men and women of New Mexico's energy industry, and they deserve nothing but our gratitude," Larry Behrens, a spokesman for Power for the Future, said in a statement. "The fact that record revenue is delivered in the midst of a pandemic and hostile leadership at the state and national level speaks to the resilience of New Mexico's energy workers."
This is a developing story. Check back for details.
