As a resident of a state that possesses mineral, oil and gas resources, and a member of modern society that uses products that rely on those resources on a daily basis, I believe firmly that American—and New Mexican—jobs extracting those minerals, oil and gas are valuable and desirable. Eschewing mining and drilling as unwanted industries suitable only for poor people in Third World nations while using the products of those industries in our everyday lives is, well, rather unethical.
There’s another point for the oil, gas and mining industries in New Mexico: we need the jobs. And we need the oil and gas royalties. Big time. And we all know this. And we’ve known for at least 20 years that we are far too reliant on oil and gas in particular in our state. But we have done nothing to change our economy and reduce our dependence.
Meanwhile, the world is changing around us. Royal Dutch Shell, better known as Shell Oil, has declared it will be a net-zero carbon company by 2050. Shell Oil is among the biggest of the big oil giants, the fourth largest oil company in the world. Shell is not making a corporate decision to jettison fossil fuels in 30 years out of the goodness of its heart. Shell is predicting it will not be able to make money in 30 years with fossil fuels. This should tell New Mexico something.
The Biden administration is moving forward with its campaign pledge to rejoin the Paris accord and is temporarily freezing drilling permits on federal lands. This should also tell New Mexico something. This should not cause a panic. This will not stop current drilling. This will not stop new drilling for at least four years; the largest producers, like Shell, have stockpiled permits. If new permits are not granted in four years, it is likely that we will see production shift to Permian Basin locations in Texas that are on privately owned lands.
So we have four years in New Mexico to make some decisions. Ideally, these decisions would start with conversations, not posturing, fearmongering, and shouting. Most of all these decisions need to be based in reality, not speculation. For instance, it is possible that this administration could relent and allow permits after a period of time. It is also possible that a new administration will be elected in 2024 that will support drilling on federal land. Meanwhile, what we know is that oil companies have rebranded themselves as “energy companies” and Chevron, BP and Shell are all investing in solar, wind and other alternative energy sources.
What we also know is that the formula we have relied upon for the last 20 years isn’t working for our state, even with a strong oil and gas economy. So it is not going to improve as the fossil fuels industry wanes, which it inevitably will, with or without further federal government strictures.
In four years, New Mexico could do a lot. We all know we need functioning schools and broadband; perhaps that will happen one day. A top priority should be to take some of the oil and gas revenues, while we still have them, and establish a permanent investment fund for economic development. As energy companies located here transition from fossil fuels to alternative sources, New Mexico should incentivize them—not for political reasons, for economic development reasons.
State leaders must also stop picking partisan favorites among industries: all viable jobs and associated taxes should be welcome. The film industry, which has been a big contributor to our state in the last decade, shouldn’t be derided as it has been by Republicans, and Democrats need to treat our extractive industries as the major contributors they are. When the politicians treat industry with equal respect, industries will be more interested in relocating here.
Finally, our regulatory climate must be cleared of a century of cobwebs, dust and cronyism. Texas, Arizona and Colorado make it easy to start or relocate a business with their regulations; we give businesses different answers with every phone inquiry and then lay GRT on them.
New Mexico’s day of economic reckoning, on the horizon for at least 20 years, is growing nearer and nearer. If you don’t want to believe me, or any number of economists who have studied the situation, you might want to believe Royal Dutch Shell, going carbon-free by 2050.
Merritt Hamilton Allen is a PR executive and a former Navy officer. She lives amicably with her Democratic husband and Republican mother north of I-40 where they run two head of dog, and two of cat. She can be reached at firstname.lastname@example.org.