Dollars and no sense

Not to be outdone in a campaign year of grand giveaway schemes, New Mexico governor Michelle Lujan Grisham has offered up her own version of largess: free college tuition procured from the state's oil and natural gas revenues.  Thanks to the extremely robust oil and gas industry in the southeast corner of New Mexico, drilling and fracking in the state's sector of the Permian basin is at an all-time high.  Revenue receipts for 2019 are projected at $7.8 billion.  That's a lot of cheddar for the governor to spend despite the fact that she campaigned on eliminating fossil fuels and recently signed a bill requiring renewable energy dependence by 2045.  While the governor's apparent reversal on fossil fuels is confusing, some state lawmakers are hesitant to tie future oil and gas revenues to the pledge of free college tuition in perpetuity, given the volatility of fossil fuel prices, in addition to the recent Green New Deal endorsement by N.M. senator Martin Heinrich and his House colleague, Debra Haaland (D-N.M.).  Both have campaigned to "keep it in the ground."

New Mexico is an energy-rich state.  In fact, N.M. is the sixth largest supplier of oil and natural gas in the U.S.  At present, N.M. state coffers are overflowing with oil and gas revenue receipts due to the national economic boom and the increased number of drilling rigs operating in what's known as the Permian Delaware Sub-Basin.  Texas is the only state that has more drilling rigs than N.M.  Additionally, "[o]il production hit a record of 250 million bbl in 2018 from 172.6 million bbl the year before, according to the New Mexico Oil Conservation Division[.] ... Production is on pace to hit a similar level this year as operators report oil volumes of 152 million bbl through July.  Natural gas production also increased to 1.5 Tcf in 2018 from 1.3 Tcf in 2017."  Despite record-breaking numbers, oil production was almost two thirds less than the current 250 million bbl produced compared to 85,550 thousand bbl produced in 2012.  Citizen groups, industry associations, and concerned lawmakers are asking the same questions: what happens when volume production drops and state coffers are no longer awash in oil and gas revenue?  Who's on the hook for free college tuition then?

More troubling is the governor's policy reversal on fossil fuels, especially since she just signed the N.M. Energy Transition Act, mandating that the state be 100% energy carbon-free by 2045.  While the governor's supporters, environmentalists, and Green New Deal advocates are cheering Lujan Grisham's commitment to 100% renewables, left out of the conversation is that nearly one third of N.M.'s state budget is derived from oil and gas production revenue.  No word yet on exactly what will replace this revenue, which is used to fund roads and road repairs, public education, health care, and state infrastructure, among other things.  The governor, dubbing her college tuition-free Opportunity Scholarship as New Mexico's "moonshot," proposes to add yet another budget-line item, claiming that it will benefit 55,000 annual graduating high school seniors, as well as adults returning to college.  More unanswered questions: What happens to the Opportunity Scholarships when there is zero oil and gas revenue?  What happens in 2045, when the state's 100% carbon-free energy mandate kicks in?  What is the plan to upsell the "keep in the ground" contingent?

Both Senator Heinrich and Congresswoman Haaland have endorsed the Green New Deal mandating that fossil fuels be eliminated altogether.  Remember, one third of the state's budget is derived from oil and gas revenue, which neither Heinrich nor Haaland has publicly acknowledged, nor has either lawmaker offered up alternative plans to replace the current projected $7.8-billion fossil fuel revenue windfall.  Numerous environmental groups and their foot soldiers have descended upon the state, attempting to convince state lawmakers to shut down all oil and gas production.  Although unsuccessful to date, the N.M. oil and gas industry lobbyists are up against an army of well funded out-of-state activist extremists, who are utterly ignorant and refuse to acknowledge the significant state budget impact of oil and gas revenue.  Bottom line?  Despite signing N.M. State Bill 489, Governor Lujan Grisham is ready to spend future oil and gas revenues she seeks to eliminate.  Go figure.

Not to be outdone in a campaign year of grand giveaway schemes, New Mexico governor Michelle Lujan Grisham has offered up her own version of largess: free college tuition procured from the state's oil and natural gas revenues.  Thanks to the extremely robust oil and gas industry in the southeast corner of New Mexico, drilling and fracking in the state's sector of the Permian basin is at an all-time high.  Revenue receipts for 2019 are projected at $7.8 billion.  That's a lot of cheddar for the governor to spend despite the fact that she campaigned on eliminating fossil fuels and recently signed a bill requiring renewable energy dependence by 2045.  While the governor's apparent reversal on fossil fuels is confusing, some state lawmakers are hesitant to tie future oil and gas revenues to the pledge of free college tuition in perpetuity, given the volatility of fossil fuel prices, in addition to the recent Green New Deal endorsement by N.M. senator Martin Heinrich and his House colleague, Debra Haaland (D-N.M.).  Both have campaigned to "keep it in the ground."

New Mexico is an energy-rich state.  In fact, N.M. is the sixth largest supplier of oil and natural gas in the U.S.  At present, N.M. state coffers are overflowing with oil and gas revenue receipts due to the national economic boom and the increased number of drilling rigs operating in what's known as the Permian Delaware Sub-Basin.  Texas is the only state that has more drilling rigs than N.M.  Additionally, "[o]il production hit a record of 250 million bbl in 2018 from 172.6 million bbl the year before, according to the New Mexico Oil Conservation Division[.] ... Production is on pace to hit a similar level this year as operators report oil volumes of 152 million bbl through July.  Natural gas production also increased to 1.5 Tcf in 2018 from 1.3 Tcf in 2017."  Despite record-breaking numbers, oil production was almost two thirds less than the current 250 million bbl produced compared to 85,550 thousand bbl produced in 2012.  Citizen groups, industry associations, and concerned lawmakers are asking the same questions: what happens when volume production drops and state coffers are no longer awash in oil and gas revenue?  Who's on the hook for free college tuition then?

More troubling is the governor's policy reversal on fossil fuels, especially since she just signed the N.M. Energy Transition Act, mandating that the state be 100% energy carbon-free by 2045.  While the governor's supporters, environmentalists, and Green New Deal advocates are cheering Lujan Grisham's commitment to 100% renewables, left out of the conversation is that nearly one third of N.M.'s state budget is derived from oil and gas production revenue.  No word yet on exactly what will replace this revenue, which is used to fund roads and road repairs, public education, health care, and state infrastructure, among other things.  The governor, dubbing her college tuition-free Opportunity Scholarship as New Mexico's "moonshot," proposes to add yet another budget-line item, claiming that it will benefit 55,000 annual graduating high school seniors, as well as adults returning to college.  More unanswered questions: What happens to the Opportunity Scholarships when there is zero oil and gas revenue?  What happens in 2045, when the state's 100% carbon-free energy mandate kicks in?  What is the plan to upsell the "keep in the ground" contingent?

Both Senator Heinrich and Congresswoman Haaland have endorsed the Green New Deal mandating that fossil fuels be eliminated altogether.  Remember, one third of the state's budget is derived from oil and gas revenue, which neither Heinrich nor Haaland has publicly acknowledged, nor has either lawmaker offered up alternative plans to replace the current projected $7.8-billion fossil fuel revenue windfall.  Numerous environmental groups and their foot soldiers have descended upon the state, attempting to convince state lawmakers to shut down all oil and gas production.  Although unsuccessful to date, the N.M. oil and gas industry lobbyists are up against an army of well funded out-of-state activist extremists, who are utterly ignorant and refuse to acknowledge the significant state budget impact of oil and gas revenue.  Bottom line?  Despite signing N.M. State Bill 489, Governor Lujan Grisham is ready to spend future oil and gas revenues she seeks to eliminate.  Go figure.