Recent headlines paint a dismal picture for New Mexico. Across a broad swath of measures that truly matter, our State ranks last or near the bottom. Job growth, per capita income, health, education, child well-being … all point to a state in serious trouble.
Economic growth and job creation are essential to meeting the State's myriad challenges. While thoughtful proposals for economic development have been advanced recently, these efforts emphasize longer-term payoffs. New Mexico's families and businesses are struggling today. "Business as usual" won't cut it. We need results sooner.
Lots of ideas abound, but energy is by far the biggest. Energy and related industries can deliver thousands of new jobs and billions of dollars in new economic activity for New Mexico quickly, cleanly, and profitably, without sacrificing the values that make New Mexico special.
Yet, there is an alarming gap between the State's energy potential and its realization. New Mexico is squandering crucial opportunities to create jobs and wealth throughout the State in renewable energy, oil & gas, energy efficiency, and related industries.
How can this be happening, and why? Blame a lack of vision, leadership, and collaboration to seize the opportunities within reach. More importantly, what can be done to change course and grow New Mexico's economy with energy-related development?
Fortunately, the United States is in the midst of a transformative energy boom driven by a convergence of advances in oil & gas, renewable energy, and energy efficiency. Our decades-old paradigm of energy deficit is turning into one of comparative abundance. The United States now produces more oil than Saudi Arabia and more natural gas than Russia. Wind, solar, and geothermal energy production hit new highs each year.
This energy revolution is a prime contributor to our national economic recovery, while simultaneously bringing U.S. CO2 emissions down to the lowest level since the mid-1990s. Unfortunately, while the world enviously watches this U.S. energy transformation, New Mexico barely shows up on the radar screen. The consultancy IHS projects that by 2025, the value chain for U.S. unconventional oil & gas will exceed $500 billion per year, contribute $138 billion to federal and state government revenues, $269 billion to workers' earnings, cumulative investment of $346 billion, and nearly 1.8 million new jobs.
What is New Mexico's share of this tremendous windfall? Our state currently ranks sixth in oil and gas production, but is projected to garner only 1 to 2 percent of the overall benefits from unconventional oil and gas. Many less endowed states rank higher because they are developing downstream industries that add economic value to oil and gas.
These benefits need not come at the expense of New Mexico's agriculture, tourism and outdoor industries, its cherished environment or the health of our families. Environmental, industry and government interests can collaborate to find practical solutions that enable responsible energy development.
Such collaboration produced the recent agreement on the San Juan Generating Station, which meets EPA air quality goals, saves hundreds of millions of dollars, saves billions of gallons of water each year and represents the largest CO2 reduction in State history. This success can be replicated.
New Mexico has some of the nation's best renewable resources for solar, wind, and geothermal energy. Yet, we produce barely 1 percent of total U.S. renewable generation. Potential increased in-State sales, and sales to larger markets like California, remain largely untapped.
Closing this gap - between where we are and where we could be as a producer of clean, reliable, and affordable energy - would have profound impacts throughout the state. There could be thousands more jobs in energy production and downstream industries. State income taxes on this expanded tax base could grow by hundreds of millions. Revenues from state and Tribal lands could also grow by hundreds of millions, benefiting education and seeding other important causes.