Governor touts new energy plan at San Juan College

James Fenton The Daily Times
The Daily Times

FARMINGTON — With 25 years having passed since New Mexico's energy policy was given a fresh look, New Mexico Gov. Susana Martinez said the time to update it was long overdue.

"A lot has changed since 1991," she said.

After announcing her new energy plan in Carlsbad on Monday, Martinez shared details of the state's new energy policy — called the 2015 Energy Policy and Implementation Plan — with approximately 100 dignitaries, local officials, and leaders of oil and gas companies that operate in the San Juan Basin at the Quality Center for Business at San Juan College on Tuesday.

Martinez touted her plan as promoting an "all of the above" and "common sense" approach to energy development in New Mexico, which includes oil, natural gas and coal, as well as renewable resources like solar and wind power.

"New Mexico is prepared to lead the way for American energy independence," she said.

Martinez said New Mexico is the fourth-largest net supplier of energy in the U.S., ranking sixth in oil production and seventh in natural gas production last year, she said.

Martinez emphasized the energy industry's capital contributions to the state's coffers. Revenues from oil and gas contributed $2.2 billion in fiscal year 2015, or 36 percent of the state's general fund, she said. Those two energy sectors — which fund critical services like health care and education — also provided $409 million for critical infrastructure projects, $669 million to the state's permanent fund and $156 million to local governments, she said.

"This is a lot of money. This is huge. Not everyone knows it. They just seem to think we print it, but we don't," she said to laughs.

Martinez said the revised policy includes more than 90 recommendations, and industrial infrastructure is a priority of her administration.

She said that greater investments in infrastructure, like rail lines from the Four Corners area to Interstate 40 and a pipeline to export energy products represent sensible economic development.

Martinez said her new plan will not succeed without a trained work force, led by the industry.

She said postsecondary educational institutions' courses in science, technology, engineering and math disciplines should be aligned so that students can avoid having to retake classes after they transfer from two-year to four-year schools. She said industry-oriented courses should be informed by the industry those students are planning to join.

"We shouldn't be guessing what business men and women, who put their money at risk, need out of a work force," she said. "You should tell us, so that we can formulate a curriculum together that meets your needs."

Martinez also emphasized increased "regulatory clarity," along with the need to expedite permitting for oil and gas drilling, while ensuring environmental protections remain in place. She said she was proud that her administration has removed regulatory gridlock so that state energy permits are processed within eight days.

"The federal government, not so much," she said.

Dave Martin, secretary for the state's Energy, Minerals & Natural Resources Department, wrote the plan. He said after Martinez's speech that the effort to build rail lines is going to be a challenge. He said a meeting in the coming weeks with rail company and elected officials is planned.

"It's about money," he said. "You're talking a 100 miles of rail, millions of dollars per mile. It's going to require a public-private partnership. If we don't keep after it, it won't get done."

Martinez said after her speech that her administration would lead the charge. She said she is making efforts to establish partnerships with Navajo Nation President Russell Begaye and others to see the project through.

"We are determined to have that happen," she said. "I think we're going to have a good collaboration with the Navajo Nation president and ... I think that relationship will be very helpful, because we have to cross rail through not just New Mexico but through a Nation. (Begaye) is constantly thinking of ways to grow his economy, and we're willing to partner with him to make things happen."

Mayor Tommy Roberts said after the speech that he liked hearing Martinez's emphasis on infrastructure.

"Rail. That caught my interest. That's a huge step forward," Roberts said. "If the state can provide resources in the form of incentives or some investment of some sort, it can get farther than before," Roberts said. "All of a sudden, we hear that we have the state and the Navajo Nation on board ... We now have a variety of businesses and interests that show the project is well worth the investment."

John Byrom, DJ Simmons Inc. president and CEO, said that Martinez's commitment to the energy industry was commendable. Byrom said independent companies like his are especially at risk from looming regulatory tightening and slow permitting.

"The fact that she's aware that regulations are really holding back the state and that she's willing to advocate on our behalf and unleash the potential that we have here is good to see," Byrom said. "The regulatory burden, especially from the federal side, delays a lot of drilling but also creates a lot of unnecessary costs on existing production ... that causes us to plug the wells prematurely, leaves a lot of gas in the ground and hurts the revenue for the average New Mexican who depends on it for taxes for general fund for schools and (other services)."

James Fenton is the business editor of The Daily Times. He can be reached at 505-564-4621 and Follow him @fentondt on Twitter.