Connect with us

New Mexico

Is New Mexico’s oil and gas reliance sustainable?

Published

on

Is New Mexico’s oil and gas reliance sustainable?


About $9 billion in income was anticipated within the subsequent fiscal 12 months for New Mexico, per a state monetary report, about $1.6 billion greater than was spent in FY 2022’s whole allocation of $8.4 billion.

Eddy County Supervisor Allen Davis mentioned all that cash got here from the oil and fuel business in southeast New Mexico’s Permian Basin area.

He urged lawmakers to reinvest in what he characterised because the state’s largest cash maker, accounting for as much as 35 p.c of New Mexico’s price range.

Join our e-newsletter, the Every day Briefing, to get tales like this one delivered straight to your inbox each morning.

Advertisement

“Profitable firms reinvest of their highly effective financial drivers for his or her companies for his or her continued to success,” Davis mentioned. “Investing to assist one of many state’s strongest financial drivers would appear prudent for the longer term success of New Mexico.”

His feedback got here throughout a gathering of the Legislative Finance Committee (LFC) Might 18 in Artesia, because the group made up of New Mexico lawmakers prepares to challenge its subsequent price range suggestion by the tip of the 12 months forward of the 2023 Legislative Session beginning in January.

Fiscal years in New Mexico run from June 30 to July 1 of every 12 months, and initially of the lawmaking session the LFC recommends how state cash ought to be budgeted for the following 12 months.

Extra:Oil and fuel land sale in New Mexico a month away as teams protest environmental impacts

Davis mentioned financial planning for the state was depending on oil and fuel he mentioned his county led the state in, together with neighboring Lea County.

Advertisement

Data present Eddy County was the third-highest contributor of gross receipts, or gross sales, tax income to the State of New Mexico at about $1.8 million a month, or 10 p.c, within the first quarter of 2022.

Eddy County was solely behind Lea County, which can also be within the prolific Permian Basin oilfield, and the state’s largest city space in Bernalillo County.

Extra:Merger prioritizes Permian Basin oil and fuel manufacturing as area sees document progress

Whereas Eddy County has solely about 6 p.c of the state’s inhabitants, Davis mentioned it contributes a complete of about 20 p.c of New Mexico’s tax income.

And that’s as a result of monetary may of oil and fuel, he mentioned.

Advertisement

He mentioned of the 1,500 oil and fuel wells drilled in New Mexico final 12 months, 96 p.c – 1,436 have been in Eddy and Lea counties.

Extra:Oil and fuel threatens lizard native to southern New Mexico. Here is what’s being performed

The state produces about 40 million barrels of oil a month, Davis mentioned, with 16 million coming from Eddy and 22 million coming from Lea.

For pure fuel, 80 billion cubic toes (CF) of New Mexico’s whole of 200 billion CF per 30 days got here from Eddy, he mentioned, and 70 billion from Lea.

About 60 p.c of Eddy County’s 2.7 million acres have been federally-owned, Davis mentioned, which means the realm was closely impacted by federal vitality coverage, in contrast with largely-unencumbered counties West Texas which is generally non-public land.  

Advertisement

Extra:How a lot does oil and fuel spend to oppose environmental guidelines in New Mexico?

When he took workplace in 2021, President Joe Biden’s administration enacted a brief halt on new federal oil and fuel leases.

This stymied progress within the state’s Permian Basin area, Davis mentioned, as rising rig counts all through the basin, which is shared with Texas, weren’t mirrored in New Mexico.

Eddy County Manager Allen Davis

“With the entire federal property that’s utilized by the oil and fuel business, when actions are taken that put a threat on that property, whether or not it’s an govt order, issues like that, non-public firms have a selection,” Davis mentioned.

“They will select the place they make investments their cash. The rocks don’t acknowledge state strains.”

Extra:New Mexico might make billions extra from oil and fuel with larger royalty charge, examine says

Advertisement

The significance of oil and fuel produced in southeast New Mexico might turn out to be more and more apparent, Davis mentioned, as demand rose amid restoration from the COVID-19 pandemic and the removing of Russia – the world’s second-largest oil producer – from the worldwide market following its invasion of Ukraine.

“Our manufacturing helps meet the present demand that’s rising and rising on the planet. That’s what’s driving our costs,” Davis mentioned. “There’s an inadequate provide to fulfill the demand that exists so costs proceed to climb. The income from oil and fuel is a major engine for New Mexico.”

LFC member Sen. Homosexual Kernan (R-42) argued the business in southeast New Mexico contributes not solely to the area, however all of New Mexico. 

“As communities within the space, we profit as properly,” she mentioned. “However when you have a look at it, lots of the assets are distributed all through the state in each neighborhood.”

Oil and fuel’ ups and downs proceed to impression New Mexico

Geoff Jay, a associate with Houston-based vitality consulting agency Daniel Power Companions backed up Davis’ assertions as to the importance of the Permian Basin and southeast New Mexico for oil manufacturing and the significance of fossil fuels within the coming years.

Extra:Do you reside within the ‘risk radius?’ Permian Basin at excessive threat of oil and fuel well being impression

Advertisement

He mentioned COVID-19 induced dramatic volatility in gas markets, disrupting world demand.

On April 20, 2020, a few month after the virus was present in New Mexico, oil plummeted to -$40 – the primary time in recorded historical past it fell beneath $0 a barrel.

Drilling exercise in New Mexico dropped by 50 p.c, with manufacturing falling by 25 p.c, Jay mentioned.

Extra:Permian Basin sees continued progress, mergers amid excessive oil costs, elevated operations

He mentioned demand returned to earlier ranges this 12 months, two years after the pandemic, and have been despatched even larger amid the battle in Ukraine to greater than $100 a barrel for a lot of the spring.

Advertisement

“These altering fortunes have had a big effect on New Mexico,” Jay mentioned to the LFC. “You will have the unenviable process of setting a price range partly funded by a commodity that was value lower than nothing two years in the past and is now reaching the highs of 2008 after we believed the world was working out of oil.”

The LFC printed its post-session monetary report in April, persevering with to tie New Mexico’s financial success to grease and fuel, reporting regrowth available in the market accounted for about 60 p.c of New Mexico’s improve basically fund income.

Extra:Chevron expects continued Permian Basin progress amid world vitality volatility

“New Mexico oil manufacturing continued to achieve new data as robust costs encourage fast withdrawal of assets within the state,” the report learn.

However the report warned that the state’s dependence on oil and fuel might set it up for future vulnerabilities as a result of business’s conventional increase and bust nature.

Advertisement

“New Mexico is experiencing unprecedented income progress as oil and fuel manufacturing within the state grows quickly and oil costs climb,” learn the report.

“The state’s robust reliance on the oil and fuel business creates a extremely unstable tax construction depending on the booms and busts of the business.”

The report prompt diversifying New Mexico’s economic system and vitality manufacturing to incorporate renewable sources like wind and photo voltaic, a transfer that would mitigate air pollution and likewise insulate the state from future financial melancholy.

“Because the world transitions away from fossil fuels, the state will seemingly want to think about viable methods to carry wind, photo voltaic, and hydrogen-based vitality into its recurring tax base whereas balancing the taxation of renewable vitality with the state’s competitiveness for the business to develop,” learn the report.

Adrian Hedden may be reached at 575-628-5516, achedden@currentargus.com or @AdrianHedden on Twitter.

Advertisement





Source link

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

New Mexico

Nina Otero-Warren: A powerful voice for New Mexico women, children and education

Published

on

Nina Otero-Warren: A powerful voice for New Mexico women, children and education


Consuelo Bergere Kenney Althouse received an unexpected phone call in March 2021.

The voice on the other end of the line was an attorney from the U.S. Department of the Treasury seeking permission to decorate millions of commemorative quarters with the face of Althouse’s distant relative, Adelina “Nina” Otero-Warren.

To Althouse, Otero-Warren was one among a “mantle of tías” — a looming but loving group of women with shiny shoes, tight buns and high expectations — in Althouse’s large Santa Fe family. Althouse had grown up visiting Las Dos, Otero-Warren’s homestead in the hills north of Santa Fe, for family celebrations. 

Advertisement



Source link

Advertisement
Continue Reading

New Mexico

Behind the scenes of the Bernalillo County Metropolitan Court

Published

on

Behind the scenes of the Bernalillo County Metropolitan Court


ALBUQUERQUE, N.M. — The Metropolitan Court of Bernalillo County had another packed docket Saturday morning.

 “We are the busiest courthouse in the state. We see more than every other courthouse does, from the traffic tickets to the misdemeanor cases and the initial felony cases that are filed here,” said Metropolitan Court Chief Judge Joshua Sanchez.

Sanchez says the court oversees about 100 cases a day and Saturday New Mexico’s top judge, Chief Justice David Thomson of the New Mexico Supreme Court, got a firsthand look at the court’s caseload.

Sanchez says he welcomes the visit.

Advertisement

“We go to these statewide meetings, and they hear about how things happen. But until you actually kind of sit there with another judge and see what happens, it’s kind of eye-opening to see the kind of controlled chaos that we have on a Saturday morning,” he said about the visit.

He adds their biggest challenge at Metro Court is the case load.

Thomson says he plans to visit courts statewide to see these challenges for himself.

“I think it’s a good idea just to come down and see it. And what you see, if you watch these, is you see all the interactions between what we face, just not as a court system, as a society, right?” said Sanchez.

Just from one morning sitting in on court proceedings, he said it’s clear mental health plays a huge part in a lot of the cases metro court hears.

Advertisement

“If there are questions of competency, we can catch those questions here, rather when they get transferred to felony court, that’s one, can they be assessed early on,” Thomson said.

He also noticed a lot of repeat offenders.

“I think it’s very helpful to see it firsthand. On a few of these individuals. I’ve actually asked to look at some of the criminal history, so I have an understanding of the particulars,” said Thomson.

Sanchez said he hopes for more visits like this in the future.

“It’s just nice to give some real perspective and validates, I think, a lot of the things that we do communicate to AOC and the Supreme Court and things that we’re seeing,” said Thomson.

Advertisement



Source link

Continue Reading

New Mexico

‘Georgia O’Keeffe: The Brightness of Light’ documentary illuminates the artist’s NM connection

Published

on

‘Georgia O’Keeffe: The Brightness of Light’ documentary illuminates the artist’s NM connection


New York brought Georgia O’Keeffe fame. New Mexico brought her freedom. Among the multiple documentaries created about her, none have given the iconic artist the full biographical treatment, complete with massive research, the artist’s letters and the cooperation of her namesake museum.



Source link

Continue Reading

Trending