Oil and Gas – The Lifeblood of NM!

Why does the NMBC care so much about Oil and Gas legislation? We care for the same reason that every New Mexican should care: the oil and gas industry is the golden goose for our state. It is the one industry that is currently creating jobs and it is THE industry that pays the lions’ share of taxes to support our schools and the state’s operating budget.

In 2012, this industry accounted for $1.7 billion of New Mexico’s General Fund revenues in the form of taxes, royalties, and distributions from the state’s permanent funds. The general fund also benefits from additional revenues, estimated at over $450 million, in the form of income taxes, gross receipts taxes and other taxes related to the oil and gas industry. Altogether, this industry consistently provides 25% or more of the state’s general fund revenues. Where would New Mexico be without this source of revenue?

Oil and gas companies have a choice about where they do business. When bad legislation or strangling regulation is passed in our state, companies can choose to go where the legislation and regulation are less onerous. If that happens, jobs and revenue will be lost.

New Mexico needs to find a logical balance between reasonable legislation/regulation and partnering with an industry that is the lifeblood of this state and its economy.

During the 2013 legislative session, there have been numerous bills introduced that would be harmful or extremely detrimental to this industry. (To see a list of some of the worst bills, go here.) Most, if not all of these bills, address issues which already have solutions in statute or rule and need no further action. In addition, many of the bills attempt to address issues that are really just thinly veiled attempts to kill the industry. The legislation is often introduced with radical environmentalist talking points about the dangers of hydraulic fracturing and the dire necessity of protecting our groundwater. The truth of the matter is: hydraulic fracturing has been used for well over 50 years and New Mexico, along with the oil and gas industry, is proactive in protecting all of our waters.

Senate Bill 547 Ban Horizontal Oil and Gas Fracturing (Senator Soules, D) calls for all hydraulic fracturing to be outlawed. This is unfortunate as hydraulic fracturing is a proven, safe and necessary process to get oil and gas wells producing economically viable quantities of oil and gas. The process is used in 95 percent of wells drilled in recent years. The impact of a hydraulic fracturing ban would be virtually identical to that of a drilling ban, disastrous for the industry and the state!

Some of the legislators introducing these bad bills claim that they are not against the oil and gas industry; they simply want to assure that New Mexico has clean air, water and lands. If that were the case, why would they not work with all stakeholders to: 1) Determine if there is reason for concern; 2) Find out if solutions already exist; 3) Determine if there is an actual problem and no existing solution, what is the best solution to address the need without unduly harming the industry? The process should include all stakeholders in order to best address all interests.

In addition to the legislators who introduce these bills, we are saddened to see the New Mexico Attorney General (AG) and Land Commissioner supporting them. The AG is charged with looking out for consumer interests. But does that not include ALL consumers? And exactly how does AG Gary King think that all of the social programs he also supports will be paid for without the contributions of this industry? Wouldn’t New Mexico be better served by the same collaborative measures outlined above?

It is time to wake up, New Mexico! We have felt the effects of the oil and gas industry preferring to do business in other states when Governor Richardson drove many of them away with the Pit Rule and other egregious regulations. Let’s not let that happen again. We need you to get involved this legislative session to stop the horrible bills that have been introduced.

We CAN expect to have clean air, water and lands without driving our strongest industry out of state. Stand up, New Mexico, and support the industry that supports you!

Join the New Mexico Business Coalition. Our work is more meaningful with you by our side.