SANTA FE, N.M. (AP) — A new report released this month detailing New Mexico’s reliance on oil and gas shows diversifying the state’s economy could prove challenging.
The New Mexico Tax Research Institute found even counties where there is little oil and gas development have benefited from those industries, the Santa Fe New Mexican reported (http://bit.ly/1iSbl1m).
According to the institute, $1.7 billion of $5.5 billion of the state’s general fund last year was from oil and gas revenues. Furthermore, $207 million earmarked for 769 state projects — from water systems to parks — also came [auth] out oil and gas production.
Much of the funding helps support schools and colleges. For example, Santa Fe County has mostly kept out oil and gas development because of a tight ordinance. Yet the report lists Santa Fe Public Schools as having received $81.7 million from the state general fund last year. Of that money, $25 million came from oil and gas revenues. Santa Fe Community College benefited from $3.9 million derived from oil and gas.
Laird Graeser, an economist and clean energy advocate, said New Mexico would have to replace that revenue if the state ever wanted to switch to cleaner energy.
The tax report was partially funded by the New Mexico Oil and Gas Association.
It also includes data from the state Taxation and Revenue Department, the State Land Office, the Board of Finance and other agencies.
State Rep. Brian Egolf, a Democrat from Santa Fe, said the dependency on oil and gas production is helping industry stakeholders influence state regulations.
“They want a golden ticket to be free from common-sense rules to protect air and water. Their attitude is ‘We pay for everything, so hands off,'” Egolf said.
New Mexico’s reliance on oil and gas will likely only grow as developers expand into other parts of the state to drill. Some of the areas they may hit include ones that had banned oil and gas development previously, including Mora County and San Miguel County.
Egolf said the state needs to make long-term plans to not be tied strictly to oil and gas.
“It is imperative for New Mexico to diversify its economy because we can’t be dependent on a single industry,” Egolf said.