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Just days before the New Mexico Legislature begins its 2020 session, the New Mexico Oil and Gas Association (NMOGA) is reporting record oil and gas revenues that account for nearly 49 percent of the state’s general fund.
The report “Fueling New Mexico,” shows that the state oil and gas industry contributed $3.1 billion to the FY2019 general fund. At the same time, schools in Las Cruces and Doña Ana County received nearly $200 million in education funding from the industry, including nearly $125 for K-12 and $70.5 million for higher education, NMOGA said.
The report is based on an analysis conducted by the nonpartisan New Mexico Tax Research Institute (NMTRI), NMOGA said in a Jan. 16 news release.
FY2019 marks the first year oil and gas revenue has topped $3 billion in New Mexico, the news release said, and reflects an increase of $910 million over the previous year’s revenue.
“It’s only fitting that we start the new decade with yet another record-shattering year,” said NMOGA Executive Director Ryan Flynn. “While most New Mexicans may know that oil and natural gas are produced in southeast and northwest New Mexico (most of the production is in Eddy and Lea counties), the benefits and contributions are felt statewide.”
Public schools and higher education received $1.36 billion in oil and gas revenue in FY2019, an increase of nearly $300 million over the previous year, the news release said. That includes almost $1.06 billion for primary and secondary education and $302 million for the state’s universities, colleges and other institutions of higher education, NMOGA said.
“I always welcome the good financial news from oil and gas when it means more revenue for the state because, of course, our needs are great,” said New Mexico State Senate President Pro-Tem Mary Kay Papen, D-Doña Ana. “But given the ups and downs of the industry and the fact that this resource won’t last forever, we have to proceed with an abundance of caution. These windfalls are not a stable source of revenue that we can count on from year to year. I believe we should use the surplus to help address some of our immediate needs while protecting ourselves against a financially volatile future,” Papen said.
“As a state and an industry, our future is bright,” Flynn said. “New Mexico is the third largest producer of oil and the ninth largest producer of natural gas in the United States. In 2018, New Mexico produced a record 250 million barrels of oil, a 46 percent increase over the prior record set in 2017. New Mexico’s natural gas production is also on the upswing, coming in at a 10-year high of 1,488,471 million cubic feet for 2018.”
“A September 2019 report by the global consulting firm ICF said New Mexico’s growing oil and natural gas industry is poised to attract as much as $174 billion in new upstream infrastructure investments through 2030,” NMOGA said. “Alongside policies to support and promote growth in oil and natural gas production, investments could grow the combined value of oil and natural gas production 323 percent.”
NMOGA is a statewide coalition of oil and natural gas stakeholders, individuals and companies “dedicated to promoting the safe and environmentally responsible development of New Mexico’s oil and natural gas resources,” according to the association. It has more than 1,000 members.
To read the “Fueling New Mexico” report, visit www.nmoga.org/FuelingNewMexico.