State officials say generation of renewables not enough to replace oil revenue
Apr. 16—New Mexico should've started diversifying its revenue a decade ago.
That's according to Stephanie Garcia Richard, the public lands commissioner in New Mexico. Garcia and other officials spoke at a Wednesday discussion on energy in an event hosted by Axios in Santa Fe.
"We don't have time on our side for this," Garcia Richard said.
Meanwhile, state officials are also waiting to see how a federal administration not fond of renewable energy generation will impact New Mexico, an alternative form of energy the state has been increasingly promoting and trying to generate revenue from.
The State Land Office oversees 13 million mineral acres and 9 million surface acres of New Mexico public land. Revenue-wise, Garcia Richard said most state money generated from land leases comes from 2 million acres of state land leased out for oil and gas operations in southeastern New Mexico.
Garcia Richard said that needs to change. She's not the only one who thinks so.
"While we want to continue producing the high levels, we have got to find a way to diversify," Missi Currier, president and CEO of the New Mexico Oil and Gas Association, said on a separate panel at the event.
She pointed out that fossil fuels are a finite resource. "And until our state is able to create a business climate that will attract other businesses here, it will be increasingly difficult to diversify," Currier said.
It's already a challenge to lessen the state's dependence on fossil fuels.
"I've always said that we're never going to replace money from oil and gas development one to one with any other industry," Garcia Richard said. "We have a resource there that is world-class, and so unfortunately we will not be able to replace those billions of dollars one for one to any other diversification tool.
"But we should be looking at all kinds of diversification for our revenue."
She pointed out that renewable energy resources in the state have increased nearly sevenfold under her tenure, which started in 2019. She added that roughly 2,800 megawatts of renewable energy are generated on state lands today.
The money New Mexico gets from clean energy generation is still nowhere near that of oil and gas.
And the politicization of renewable energy is making the market more volatile. Garcia Richard said Inflation Reduction Act funds are hanging in flux under the Trump administration.
Melanie Kenderdine, secretary for the New Mexico Energy, Minerals and Natural Resources Department, said on another panel her agency in the last year alone brought in $400 million in federal funds.
"That's a lot of money for New Mexico," she said. "We don't know what is going to happen in this administration (around) budget reconciliation."
Nonetheless, EMNRD is working on what Kenderdine described as an energy analysis of the state, which she hopes can help shape roadmaps around the country and even around parts of the world.
"The renewables and the natural gas need to be working together," Kenderdine said.
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