{"id":38022,"date":"2022-10-06T14:26:35","date_gmt":"2022-10-06T20:26:35","guid":{"rendered":"https:\/\/dh.durangoherald.com\/tj\/education-environment-advocates-warn-about-instability-of-oil-and-gas-revenue\/"},"modified":"2022-10-06T20:26:35","modified_gmt":"2022-10-06T20:26:35","slug":"education-environment-advocates-warn-about-instability-of-oil-and-gas-revenue","status":"publish","type":"post","link":"https:\/\/dh.durangoherald.com\/tj\/education-environment-advocates-warn-about-instability-of-oil-and-gas-revenue\/","title":{"rendered":"Education, environment advocates warn about instability of oil and gas revenue"},"content":{"rendered":"

\"The
The silhouette of a drill head, backlit by a vibrant sunset, is visible from Route 550 just outside Farmington on Oct. 26, 2021. (Isabel Koyama\/ Howard Center for Investigative Journalism)<\/span><\/figcaption><\/figure>\n<\/p>\n

The oil and gas industry is excelling in New Mexico, leading to significant money for the state and public education. But the industry operates in a boom-and-bust cycle, and education and environmental advocates say officials need to find ways to diversify this revenue so the state and its schools don\u2019t suffer in bust years.<\/p>\n

Oil and gas usually generates over $2 billion for the state, making up 25% to 30% of New Mexico\u2019s General Fund, according to the Legislative Finance Committee. That\u2019s where public schools pull most of their funding. Oil and gas money also flows to the Land Grant Permanent Fund, another source of public education revenue.<\/p>\n

Public schools typically get over $1.4 billion from the industry, according to a 2021 New Mexico Oil and Gas Association report<\/p>\n

Higher education also benefits from these extractive industries, which generated over $262 million for institutions throughout the state in 2021, according to the report. UNM campuses alone received more than $100 million.<\/p>\n

Oil and gas has been a point of debate with the General Election just a month away, especially within the gubernatorial race. Amber Wallin, executive director of New Mexico Voices for Children, said issues in education funding go beyond any one election, and officials and New Mexicans need to think about how they can best set up future generations.<\/p>\n

\u201cWe have massive needs in our state and in our schools, in our families that are really generational problems to solve. They\u2019re not election-cycle problems to solve,\u201d Wallin said.<\/p>\n

When the oil and gas industry isn\u2019t doing well, education is underfunded, Wallin said, and there\u2019s a general unwillingness to invest in schools because of the revenue\u2019s instability.<\/p>\n

\u201cSo what we really need to see,\u201d she said, \u201cis long-term, consistent, significant investments in our classrooms and in our kids and in our teachers, to really see those educational outcomes begin to improve.\u201d<\/p>\n

Boom. But then bust.<\/div>\n

The state is heavily reliant on what Wallin described as \u201ca volatile stream of revenue.\u201d<\/p>\n

Cyclically, there are big years with major demand and rising prices \u2014 like the state is seeing now \u2014 that lead to low years of overproduction. Economist Kelly O\u2019Donnell said these busts are just as severe as the booms for the state and should be kept in mind, especially given that state obligations such as public education depend so heavily on that revenue.<\/p>\n

O\u2019Donnell has worked for the state and federal government on public finance around natural resources. She said although there are benefits to the state\u2019s successful oil and gas periods \u2014 like New Mexicans paying lower taxes \u2014 the state can\u2019t really control the industry. Factors like the war in Ukraine, how the Organization of the Petroleum Exporting Countries regulates fossil fuel and rates, and even the weather can sway the industry\u2019s success for good or bad, she said.<\/p>\n

\u201cWe\u2019re relying on it for public education, health care, public safety \u2014 all of these things we really can\u2019t afford to have uncertainty about,\u201d O\u2019Donnell said.<\/p>\n

The state has attempted to stabilize the revenue but needs to continue diversifying funding, O\u2019Donnell said. One way the state has tried to control funding is through the General Fund reserves, which act as safeguards during shortfalls of revenue, according to the Legislative Finance Committee. When there\u2019s excess oil and gas revenue, some of it goes into the reserves. In 2021, the school tax on oil and gas companies generated $335 million for the stabilization reserve.<\/p>\n

During the last legislative session, lawmakers approved a record budget due to a surplus of billions in oil and gas revenue. And Rep. Christine Chandler (D-Los Alamos) said the Legislature could approve a few billion more dollars in state funding in the next session, with two-thirds of that projected revenue coming from oil and gas.<\/p>\n

Still, she stressed the need to generate other revenue.<\/p>\n

A costly climate crisis<\/div>\n

Jeremy Nichols is the climate and energy program director of WildEarth Guardians. He said the industry costs the state more than people think, not just in terms of money. He pointed to the negative effects on New Mexico\u2019s land and people\u2019s health. Just the ozone pollution produced, he said, leads to smog and can trigger health issues that can send people to the hospital.<\/p>\n

\u201cThose costs are borne by New Mexicans and not by the oil and gas industry, not by oil and gas companies,\u201d Nichols said. \u201cAnd unfortunately, those costs are not factored into assessments of whether the oil and gas industry is truly delivering for the state of New Mexico.\u201d<\/p>\n

Oil and gas companies are also worsening the climate crisis, Nichols said. Production in the state, he added, causes major carbon dioxide and methane leaks. And when it\u2019s shipped out of state and burned and consumed, it contributes greatly to pollution and global warming, he said.<\/p>\n

\u201cThey\u2019re the ones fueling the crisis,\u201d Nichols said. \u201cThey\u2019re fueling the problem.\u201d<\/p>\n

After the largest wildfire in the state\u2019s history roared through northern New Mexico this summer amid a historic drought in the southwest, Wallin said the state needs to take a serious look at its own contributions to climate change \u2014 which intensifies and multiplies wildfires \u2014 and how New Mexico is getting revenue.<\/p>\n

O\u2019Donnell said she suspects that global warming will eventually force the state to wean off oil and gas. \u201cI think the consequences of climate change are really going to necessitate a rethinking of a lot of how we power the U.S.,\u201d she said.<\/p>\n

Oil and gas won\u2019t be around forever<\/div>\n

Oil and gas is a limited resource. According to the Millennium Alliance for Humanity and the Biosphere at Stanford, oil will run out in 30 years and gas in 40, though there are about 50 years\u2019 worth of reserves left that have already been extracted when current consumption rates are factored in.<\/p>\n

This limited supply is why diversification is necessary, O\u2019Donnell said.<\/p>\n

\u201cAlthough this election isn\u2019t going to impact oil and gas production in New Mexico, being prepared for a future with less oil and gas is really important,\u201d O\u2019Donnell said.<\/p>\n

The transition away from fossil fuels won\u2019t happen overnight, Wallin said, but needs to happen nonetheless.<\/p>\n

\u201cThat\u2019s critical to not just our state\u2019s financial stability, and to stability and adequacy for education funding, but it\u2019s also critical because we know that long-term that the oil and gas industry will not be around forever,\u201d Wallin said.<\/p>\n

But given how successful the industry is right now, some disagree with weaning off of it. One argument against limiting oil and gas production in New Mexico is that it will hurt schools in the short-term. Catherine Brijalba, a sixth-grade teacher in Lea County, said in an op-ed in the Santa Fe New Mexican that without oil and gas revenue, schools would lose significant funding, and her students\u2019 parents would lose their jobs.<\/p>\n

But Wallin said there are other ways the state can raise money for public education. For example, she said, a more stable form of revenue could stem from making sure that wealthy individuals are paying their fair share of taxes. O\u2019Donnell suggested that renewable energy production could also generate money and jobs for the state.<\/p>\n

Source NM talked to University of New Mexico students on its main campus about their thoughts on oil and gas funding in higher education, and many weren\u2019t sure how $100 million at UNM could be replaced.<\/p>\n

David McCreath, an art student applying for graduate school at UNM, said the state should be pulling away from fossil fuel usage. Reducing federal governmental subsidies would mean oil and gas costs more for everyone and could lessen usage overall.<\/p>\n

But it\u2019s difficult to do, he said, because the U.S. is so dependent on it, from driving cars to funding education, like at UNM.<\/p>\n

\u201cIt\u2019s a public university. It\u2019s intended to be affordable and accessible to everyone,\u201d McCreath said. \u201c$100 million is not nothing.\u201d<\/p>\n

Math major Raul Martinez said free education is more important to him than decreasing oil and gas production at the end of the day.<\/p>\n

But freshman Chloe Dugan said UNM either shouldn\u2019t accept that money or use it to emphasize Indigenous voices, the third-leading ethnicity at the university, because of harms and disruptions by the industry on tribal land.<\/p>\n

She said it\u2019s a good idea to move toward renewable energy sources but that the state should be careful, because those companies will \u201clust for money,\u201d just like oil and gas companies.<\/p>\n

Gov. Michelle Lujan Grisham and Public Lands Commissioner Stephanie Garcia Richard are at least making strides to use renewable energy resources, as well as protect the land, O\u2019Donnell said.<\/p>\n

\u201cIf those two were re-elected, there would be a stronger emphasis on responsible land stewardship than there\u2019s likely to be with their opponents,\u201d she said.<\/p>\n

Still, she said, \u201cNobody is going to change, again, the amount of money we\u2019re getting in revenue from oil and gas.\u201d<\/p>\n

Read more at sourcenm.com.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Politicians won\u2019t slow the industry but must eventually diversify funding, economist says<\/p>\n","protected":false},"author":1,"featured_media":29067,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[],"tags":[155,799,221,1526],"naviga_topic":[],"class_list":["post-38022","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","tag-education","tag-farmington","tag-gas-and-oil","tag-taxation-and-budget"],"acf":[],"author_name":"dh_admin","_links":{"self":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/38022","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/comments?post=38022"}],"version-history":[{"count":0,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/38022\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media\/29067"}],"wp:attachment":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media?parent=38022"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/categories?post=38022"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/tags?post=38022"},{"taxonomy":"naviga_topic","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/naviga_topic?post=38022"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}