With the recent “bust” in our current economic “boom” in the oil and gas industry, the New Mexico Legislature had to schedule an emergency session to figure out how to rebalance the budget. With the transitory nature of the O&G industry, it has become very difficult to balance the budget with such an unpredictable revenue tax base. Gov. Martinez had to deal with this challenge in 2014 and now Gov. Lujan Grisham has to deal with it in the 2020 budget. The state has become too dependent on the O&G revenue stream.
What the state needs to do is diversify with more sustainable industries that offer long term employment opportunities, but that is much easier to say than do. While the state is subsidizing the wind and solar industry, the renewable industry does not provide a sustainable employment environment either. After construction, most energy farms only require 50 or so full-time employees for about 30 years at best. At the same time, the state is subsidizing the shutter of coal power and mining with the ETA law, eliminating thousands of long-term, full-time jobs.
The O&G slowdown was caused by the production/price war between Russia and Saudi Arabia that New Mexico had little control over. However, the U.S. O&G could recover by not refining foreign oil and focus only on U.S. extracted oil.
The NM coal industry could also recover if the state allowed the private sector to invest billions of dollars into carbon capture technology. This would allow places like the San Juan Generation Station to continue operations and save thousands of NM jobs in a part of the state that needs it.
The state has to consider new sources of long-term sustainable jobs and revenue streams. I would suggest they start with support for the HI-STORE CISF project in Lea County. This multi-billion dollar project would not require subsidies from the state, like Netflix and Facebook demanded, but would provide $3 billion in capital expenditures and millions in steady annual tax revenue and good high paying jobs, without any boom or bust.
Martin Kral
Roswell
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May 15, 2020 at 06:21AM
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Letter: A sustainable multi-billion dollar industry - Roswell Daily Record
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