Commentary: James Jimenez, executive director of New Mexico Voices for Children, issued the following statement regarding the report on the outlook of the oil and gas industry in New Mexico, released today by the Institute for Energy Economics and Financial Analysis (IEEFA):
“For too long New Mexico has been whipsawed by volatile oil and natural gas markets that our policymakers have no power to control. Once again low oil and gas prices are causing shortfalls in dollars needed in the state budget for our schools, public safety, health care, and more. The IEEFA report released today makes it clear that we cannot simply blame COVID-19 for our revenue shortfall and expect New Mexico to recover when the pandemic subsides. The signs that the oil and gas industry is in decline go back almost a decade. New Mexico needs to diversify its economy in order to reduce our reliance on a declining industry now.
“This industry-wide decline also points to the need for the state to stop allowing millions of dollars to be wasted. Our schools and hospitals lose millions of dollars in revenue every year thanks to inadequate regulations on the venting, flaring, and leaking of methane. The federal government also needs to increase its decades-old lease rates, as well as improve bonding requirements so New Mexicans aren’t stuck with the clean-up costs when wells are inevitably abandoned.
“We need bold and innovative solutions from our policymakers to accelerate the diversification of our state’s economy, create a more equitable and transparent tax system, and strategically invest in proven programs that deliver better outcomes for our children. We need them ready to help build a more sustainable, prosperous future for our state.”
IEEFA’s report, New Mexico’s Risky Reliance on Oil Revenue Must Change: Industry Fundamentals Point to Long-term Decline, is available online here.
NM Voices for Children today also released the fact sheet Top 10 signs New Mexico’s Oil and Gas Industry Won’t Save our State Budget, which uses the findings from IEEFA’s report. It is attached separately and is available online here.
New Mexico Voices for Children is a nonpartisan, nonprofit organization advocating for policies to improve the health and well-being of New Mexico's children, families, and communities.