Cheap oil prices are good news for most Americans because they translate into lower costs at the pump.
But low gas prices are bad news for New Mexicans because instead of diversifying our economy through investments in renewable energy or tax credits for Main Street businesses, Governor Martinez cut all of those things, drastically expanded oil and gas production and gambled on the the royalties those new wells provide the state’s coffers – 1 in every 5 dollars in state revenues.
ABQ Journal: (2014) “New Mexico relies heavily on the oil and natural gas industries to fund state operations – about 19 percent of state general fund revenue comes directly from oil and gas taxes and royalties – but the energy industries are historically volatile.”
NM Political Report: (2016) “[NM State University economist Dr. Jim Peach] said that New Mexico has a failed strategy of economic development and he separated the concept of growth from development.”
Western Values Project: (2016) “Because of low oil and gas prices, New Mexico is in desperate need of additional revenue. Experts contend that every dollar decrease in oil prices results in an annual loss of $10 to $15 million in funding for the state. By this metric, the drop in oil prices over fiscal year 2015—from $84/BBL to $46/BBL—cost the state between $380 and $570 million.”
Today, oil prices are just 30% of their high when Governor Martinez came into office. But instead of diversifying our economy when times were good, she allowed solar energy credits to expire and pulled back regulations and oversight of the oil and gas industry allowing them to greatly expand not only production, but also the pollution associated with the work they do.
Oil companies took advantage of the red carpet Martinez rolled out – adding over 1,000 new wells in 2012 alone and the administration created fake safety and environmental inspection reports to allow them to operate unregulated (80% of those uninspected sites were later found to have violations).
They also, leaked, released and burned off millions of cubic feet of dangerous pollutants like methane into our air and that has many scientists speculating that reckless oil and gas practices may have contributed to the Delaware-sized cloud of super-polluting methane floating over New Mexico.
Western Values Project: “Every year between FY 2010 and FY 2014, companies vented and flared an average of 29 to 35 million MCF of natural gas on federal public lands in New Mexico. If this gas had been captured or subject to royalty payments, the state would have received an additional $6.7 to $8.1 million in annual revenue.”
But before he leaves office, President Obama has proposed a solution that makes our air a lot cleaner and helps Governor Martinez plug her budget gap from her own reckless speculation on oil and gas profits.
The President’s Bureau of Land Management is proposing a new rule requiring oil and gas companies to plug leaks (not really a novel idea) and cut way back on the amount of natural gas and other pollutants they release or burn into the air. Instead, they have to capture those gases and pay royalties to state and federal taxpayers on their real value.
In New Mexico, those royalties go straight to schools helping them avoid the repercussions of the governor’s reckless “oil or nothing” economic gamble.
Clean air and more money for schools. A double win for New Mexico families (and President Obama).
But BLM won’t decide if they will implement this rule until the public weighs in and big oil companies have promised thousands of comments opposing it. So we’re sending out the alert and asking you to help us support this plan to make our oil companies clean up their act and stop wasting our money.
We’ll deliver your comments to BLM when you complete this quick form.