Blog: Energy Diversification in New Mexico, Do it for the Kids

At HECHO, we have always said that oil and gas development is a reality, but that it should not come at the expense of the lands that we continue to depend upon for recreation, sustenance, and the growing tourism industry. 

We have expressed our concern many times about the impacts of oil and gas extraction on the land. They can cause loss of habitat for wildlife and pollution of our air and water, and if left unchecked, it can also threaten the places where we enjoy connecting with nature to fish, hunt, and camp. 

However, we’re now seeing the hold that oil and gas has on western states’ economies. A new report published by the Western Values Project, shows a troubling trend emerging as a result of low oil and gas prices: leasing and drilling of state-owned minerals is declining at a rapid pace in the West. According to the report, western states leased fewer acres for oil and gas development and issued fewer permits for drilling last year than in any year over the past decade. 

What makes this information so troubling? Well, western states heavily depend on oil and gas revenues to fund large shares of their budgets, and income from oil and gas development on state lands is used to fund our public schools, colleges, and universities. When oil and gas prices are low, and industry doesn’t invest in new leases and permits on state lands, funding for public education and services suffer. 

This isn’t a concern for the future – we’re seeing this take place, right now. New Mexico is facing hundreds of millions of dollars in budget shortfalls because of the downturn in the oil and gas industry. Revenue derived from leasing state-owned lands for oil and gas development declined from more than $100 million in FY 2012 to less than $40 million in FY 2015. As a result, public colleges and universities are planning for significant funding cuts in years to come. 

What should we do to protect western state budgets and our public schools, while also ensuring that future development does not harm our public lands, wildlife habitats, and recreation areas? There’s no doubt that the oil and gas sector is an essential source of jobs and revenue to the state of New Mexico. It is a critical part of our economy. At the same time, New Mexico can’t afford to tie its fiscal health, and the welfare of our schools, colleges, and universities to the boom-and-bust cycles of fossil fuel markets. 

Instead, it’s time for New Mexico to foster other sources of revenue from state trusts and public lands in addition to the income from the oil and gas sector. Public lands support myriad other activities – like recreation, tourism, and alternative energy production – that can provide stable, reliable revenues to make New Mexico and its budget more resilient to future fossil fuel busts. Diversifying our public lands economy is about managing public lands for our future, and our children’s future, in a more balanced, fiscally responsible way.