FARMINGTON — A detailed tax study in New Mexico shows that the oil and gas industry is responsible for more than $1.7 billion in general-fund revenues in fiscal year 2013.
Earlier this year, the New Mexico Tax Research Institute released the Fiscal Impacts of Oil and Natural Gas Production in New Mexico, a 325-page study of the state's oil and gas industry contributions to the general fund.
The study says that the oil and gas industry contributes about 31.5 percent of the total amount in the general fund. Furthermore, the report breaks down information by county. In fiscal year 2013, the state's general fund was about $5.6 billion, according to the study.
Wally Drangmeister, communications director for the New Mexico Oil and Gas Association, said this is the first detailed study about the contributions from the oil and gas industry.
"This is not an assumption-based study, these are basically taking accounting records from the state," he said, adding that until this study most people estimated oil and gas contributions.
He said that prior estimates of oil and gas contributions were close to the actual numbers in the study.
The San Juan County area produced about 1.1 million barrels of oil valued at $85.7 million. The area produced about 394 million Bcf (billion cubic feet) of natural gas valued at $1.64 billion dollars.
The industry then paid taxes to the local, state and federal governments that totaled about $280 million. The state received the largest amount in tax revenue from San Juan County producers which was about $131 million, while the federal government received about $125 million royalty and bonus payments, according to the study.
In addition, local governments, through the gross receipts tax, and ad valorem production and ad valorem production equipment taxes, received about $23 million.
Drangmeister said more than 450 hours were put into the study that was commissioned by the New Mexico Tax Research Institute.
He added that using estimates from previous years, oil and gas contributions are trending upward.
He said the Oil and Gas Association hopes the recent study will become an annual analysis of oil and gas contributions to the state.
"We don't have a firm contract or commitment, but the thought is, we would make that an annual thing," Drangmeister said.
The study analyzed the state's financial records using coded input numbers. It broke down information from the different funds and taxes in the state that use oil and gas contributions such as school funding, Land Grant Permanent Fund, Severance Tax Bonds and others.
"This is a high level summary," Drangmeister said.