By any standard, in the past decade oil production in New Mexico has attained world-class stature. In 2023, New Mexico produced about 1.8 million barrels per day (657 million barrels that year) of crude oil, 10 times more than 2010, thanks to investments in new fracking technologies. This quantity places New Mexico just about even with the oil-rich countries of Mexico, Kazakhstan and Norway, and slightly above Nigeria and Qatar. If New Mexico were a nation, it would rank 14th in the world in oil production, well above the OPEC countries of Libya, Algeria and Venezuela.
Visionary as they might have been, it seems unlikely Mary and Martin Yates, thrilled by the gushing black liquid at the Illinois #3 well in the spring of 1924, could have imagined exactly one century later their descendants would still be drilling in a New Mexico producing more oil than Qatar.
The New Mexico gross domestic product in 2023 totaled about $130 billion. About one-fifth — $26.1 billion — was generated by oil and gas. According to the New Mexico Tax Research Institute (NMTRI), total state and local government spending in 2023, including federal transfers, added up to $26.2 billion, out of which slightly more than half ($13.9 billion) came from direct and indirect taxes from the oil and gas industry.
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Most taxes collected on oil and gas are placed into the General Fund, which also includes revenues from income, corporate and other taxes and fees. The General Fund funds the annual state government budget: schools and colleges, health care, public safety, etc. Other chunks of oil and gas taxes are placed into various funds to pay for roads; for local operating, and state and local capital expenses; to bolster state reserves; and to add to various permanent funds designed to accumulate state monies against the day when extractive industries have been depleted as significant sources for state revenues.
In 2023, the general fund contained $14.98 billion when the legislature convened. Fully half of this amount, $7.5 billion, was collected from oil and gas, according to NMTRI. The other funds received $6.4 billion in oil and gas taxes and fees. Those same taxes paid for nearly 58 percent of 2023 expenses for public and higher education. Twenty-seven percent of all state expenses for health and human services came out of oil and gas, and six percent of public safety expenses. Truly, in recent years, state government spending has dramatically increased its reliance on revenues from oil and gas. By contrast, between 1998 and 2008 energy-related revenues averaged only about 16 percent of the General Fund. From 2011 to 2021 they averaged about 33 percent. In 16 years, the proportion of the state budget reliant on oil and gas has more than tripled.
The oil boom will not last forever. Given that the state is hardly a paragon of excellent government management, there is an urgency to use these generous petrodollars to fix what needs fixing.
Most New Mexicans outside of the Oil Patch — San Juan County is included because of its huge production of natural gas and oil — appear not to have absorbed the full magnitude of the oil and gas bonanza. Most are vaguely aware of oil activity in the east side, but few have any idea of the massive scales or spreading impacts from this surging tide of cash. Consequently, citizens have largely left the management of these riches to the state Legislature and executive branch, with little discussion, much less public pressure about how to spend it. Likewise, the governor’s office and legislative leaders have made few serious remarks about what they might do with the most massive influx of tax dollars in state history. But if they hadn’t thought this through, they have not neglected to spend the money.
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If NMTRI is correct, the $13.9 billion collected in taxes last year from oil and gas, if divided equally to every living person in the state, would amount to about $6,575 per person. The share for a family of four would be $26,300. A fair question is, does that family of four get that much value each year from the extra cash state government spends? Experience over the past century shows countries that rely heavily on oil revenues to fund government are highly prone to public corruption: look up corruption scores for Russia, Libya, Nigeria, Mexico, Venezuela, Iraq and Iran. They are also highly prone to neglecting investment in solid infrastructures for economic development when oil revenues have depleted.
The time is ripe for all of us to ask these questions of our governor and our legislators. Mary and Martin Yates, Tom Flynn, and Van S. Welch, if they were here, would surely join the crowd in asking.
Jose Z. Garcia taught politics at NMSU for more than three decades and served as Secretary of the NM Higher Education Department for four years.
The Garcia Subaru Pet Pics segment highlights New Mexico Living viewers’ pets. Tuesday’s featured pet is Toki the cat. Owner Lois Brown said that Toki is known for unraveling entire rolls of toilet paper and dragging the evidence through the house.
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(CNN) — As the search for more victims continues, residents of Ruidoso, New Mexico, were allowed to enter the village Monday for the first time since a pair of wildfires converged on the community, causing massive destruction.
“The search and rescue teams are in there. They’re with canines, and they’re still going property to property to property,” Mayor Lynn Crawford told radio station KRUI-AM Monday.
Two people were confirmed dead and 29 identified as missing as of Monday, Crawford said. A large section of the village where searches continue has been designated a “no entry” or “exclusion” zone, he added.
The South Fork and Salt Fires, which began last week, have destroyed more than 25,000 acres, with the South Fork Fire 37% contained and the Salt Fire 7% contained, according to the Southwest Area Incident Management Team. More than 1,000 firefighting personnel are battling the wildfires, and FBI special agents are helping figure out what started them.
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The fires keep burning as the nation grapples this week with more extreme heat – the deadliest form of weather globally and one that makes wildfires more likely and destructive.
In Ruidoso, two wildfire deaths have been confirmed: One victim was identified as Patrick Pearson, 60, who was staying at the Swiss Chalet Inn that was destroyed in the fire; state police have not confirmed the other’s identity.
“The look on the children’s faces when you know they don’t understand,” Crawford told CNN affiliate KOAT, “when you see the people, the looks on their faces – it’s very difficult.”
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As residents return to a fire-ravaged village in the mountains of southern New Mexico, the mayor on Monday warned them that some parts of Ruidoso remain off limits as special search and rescue teams comb the charred rubble along the hardest-hit streets.
They’re looking for the remains of people who are still unaccounted for after the South Fork and Salt fires ripped through the area just days ago, killing at least two people, forcing thousands to flee and destroying more than 1,500 structures.
Mayor Lynn Crawford put the number of missing at 29. Village officials said in a Sunday night update that the search teams have identified potential additional fatalities, but any confirmation will have to be made by investigators.
“The search and rescue teams are in there and they’re with canines and so they’re still going property to property to property,” Crawford said during his Monday morning radio address.
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With cell service going down during the evacuations last week, it made communication nearly impossible. While service slowly is being restored, some residents said Monday they are still having a difficult time connecting.
The 29 people on the list have not been in touch with friends or family since last Monday. The list was larger just a day ago, but village officials have been using social media and working with the American Red Cross to mark evacuees as “safe” as soon as they are heard from.
Authorities have blocked traffic into so-called exclusion zones to ensure these areas remain undisturbed until they are officially cleared. The FBI also is investigating, offering up to $10,000 for information leading to the arrests and convictions of those responsible for the human-caused fires.
A charred car and the remains of the Swiss Chalet Hotel are shown after it was destroyed by the South Fork Fire in the mountain village of Ruidoso, N.M., Saturday, June 22, 2024. Credit: AP/Andres Leighton
The flames were first reported June 17. Within hours, the fires moved through tinder-dry parts of the Sacramento Mountains from Mescalero Apache tribal land toward Ruidoso. Evacuation orders included thousands of homes, businesses and the Ruidoso Downs horse track, prompting traffic jams as people dropped everything and fled.
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Village officials estimate that several hundred homes were among the structures destroyed or damaged. Assessments continued Monday as some residents were allowed to return. Images shared on social media showed some homes reduced to ash, only their foundations or fireplaces left standing. Charred vehicles and twisted metal roofs were laying on hillsides where homes once stood.
Some properties were saved, although the ponderosa pines that once surrounded them had blackened trunks and their needles were singed.
The village set up temporary housing for about 500 people and food and other supplies were being distributed. Officials were encouraging residents who returned Monday to bring bottled water and a week’s worth of food as some utilities have yet to be restored.
Houses destroyed by the South Fork Fire are pictured in the mountain village of Ruidoso, N.M., Saturday, June 22, 2024. . Credit: AP/Andres Leighton
Several dozen members of the New Mexico Army and Air National Guard were stationed in Ruidoso to help. Utility workers also were installing new power poles and stringing wires throughout the community. Workers with the New Mexico Environment Department were testing the drinking water system.
President Joe Biden issued a disaster declaration for parts of southern New Mexico last Thursday, freeing up funding and resources to help with housing and other emergency work related to the fires.
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The two fires have burned about 40 square miles (104 square kilometers). Monday brought another day of light rain and higher humidity levels, aiding firefighters as they bolstered lines around the perimeter. Full containment isn’t expected until July 15, according to fire officials.
Officials also warned residents to be mindful of the potential for flash flooding if more rain falls on the bare mountain slopes.
Kerry Gladden, a spokeswoman for the village of Ruidoso, noted that wildfires are nothing new to the Sacramento Mountains. But she called this “a whole other level of devastation.”
“It kind of takes your breath away when you see it,” she told The Associated Press. “And you know, we are resilient and we will rebuild and we will absolutely come back from this. But, boy, it’s hard to see it at this point.”
