Who forgot to tell the NM State Land Office about climate change?
Who forgot to tell the NM State Land Office about climate change?
Increasingly higher oil and gas production undermines all of New Mexico's climate action.
New Mexico’s two hands don’t seem to be talking to each other.
On one hand, the state has gained a reputation as a leader in climate policy - often keynote speaking at global climate events like COP, Gov. Lujan-Grisham and her cabinet have passed clean car and methane rules that are among the most ambitious in the country.
On the other hand - New Mexico extracts more oil than all other US states less Texas, flushing the state with unprecedented oil money. A lack of disincentives for the oil and gas industry, and a State Land Office that has failed to diversify its lease revenues both hold some blame.
The Journal reported that New Mexico's public land generates 97% of its revenue from oil and gas production, and 0.16% comes from renewable energy. How can one be a leader in climate action while literally renting itself to the root of the climate change problem?
The NM State Land Office website says this on its homepage:
We can diversify the revenue that comes into the Land Office by tripling the number of renewable energy projects, promoting outdoor recreation, and encouraging new and innovative commercial development on state trust land. With the largest continuous oil and gas resources potential ever assessed in the world sitting in Southeast New Mexico, and land that is prime for wind and solar development, Commissioner Garcia Richard is committed to working to make more money for New Mexico while protecting the health of our land.
The land office is seemingly open about its willingness to continue tapping oil revenues while contradictorily stating they are committed to the “health of our land.” Furthermore, “Tripling the number of renewable energy projects” on state land would only come out to 0.48% of public land revenues - I’d hardly call that diversification.
On private land, renewable energy is being built thanks to its affordability and government subsidies, but that hasn’t resulted in less oil usage, just more energy usage overall. Without a disincentive to using fossil fuels, we’re simply adding any new renewable energy on top of our increasing fossil fuel diet:
New Mexico’s legislature, which just started its 2024 session, may have a few options that could diversify state land leases and limit new oil & gas production.
Rep. Matthew McQueen, a Democrat from Galisteo, and Sen. Bill Tallman, a Democrat from Albuquerque and former Deputy City Manager of Santa Fe, are proposing an increase in the oil and gas royalty rates from the current maximum of 1/5th the value of the gas produced to 1/4th the value. This increase in royalty rates could increase the amount of funding sent to the state and dissuade ever-growing oil production. While it would be a small improvement, the increase could set the tone for what needs to come - a carbon pricing mechanism that eventually leads to the near elimination of oil and gas production in New Mexico.
Environmental policy ideas often revolve around incentives for clean energy, but without disincentives for greenhouse gas emissions, the global energy diet will continue to swell. A full-on carbon pricing mechanism, like those on the West Coast and Northeast, would be most effective for decreasing oil and gas extraction (and therefore greenhouse gas emissions), but for now, an incremental improvement like the one proposed by McQueen and Tallman is more likely to pass through New Mexico’s fairly purple legislature and inch the state closer to a sort of ‘soft landing’ from the oil and gas roller coaster it’s been on.
The unencumbered oil and gas industry will continue to undermine the state’s climate wins until New Mexico’s right hand starts acknowledging its left. For the two hands to meet each other, the legislature will need to stop sitting on them.
In other news
There hasn’t been much movement for the bills I highlighted last week, but here are some new environmental and environmental-adjacent bills proposed:
Oil and Gas Children’s Health Protection Zones
Electric Vehicle Tax Credit - ($3,250)
Geothermal Heatpump Tax Credit
Geothermal Electricity Tax Credit
Geothermal Project Funding & Management
Solar Market Development Tax Credit Changes
Housekeeping
I love nothing more than sending you these articles every Friday, but my increasingly busy work and personal life have made it difficult to keep this cadence every week. That said, I may be allowing myself a bi-weekly cadence for publishing on Complex Effects when time gets tight.
As always, thank you so much for subscribing.
- Austin