Industry leaders have made their growing influence clear.
“The future and the opportunities that New Mexico has is directly tied to the success of the oil and gas industry,” said Robert McEntyre, the communications director for the New Mexico Oil and Gas Association. “That’s something that policymakers on both sides of the aisle have long recognized.”
New Mexico’s dependence on natural resources has been a feature of the tax structure since statehood in 1912. As decades passed, the resources being pulled from New Mexican earth changed — coal, then uranium, then natural gas — but the economic model never did.
The latest oil boom overlapped with years of steep tax cuts, resulting in a state budget with natural resources as its primary source rather than a piece of the pie. For nearly two decades, state government has focused on slashing taxes. Martinez, Lujan Grisham’s predecessor, still touts that she made 61 cuts to state taxes and fees.
But this tax structure is not set in stone.
“We have oil and gas, and so we have chosen to provide tax cuts in other areas,” said Bill Jordan, the government relations officer at New Mexico Voices for Children, an advocacy group. “Other states have figured out how to pay the bills … and they do it without oil and gas.”
To do this, some officials in state government have begun pushing to find other sources of revenue.
“We want to have a transition plan,” said Stephanie Garcia Richard, public lands commissioner and head of the office that oversees state land use. “We want to transition and not just leave New Mexico in a lurch.”
Garcia Richard’s office has begun leasing land to renewable energy companies. The office is also looking at recreation, manufacturing and research as potential income sources in preparation for the day that New Mexico’s oil wells inevitably shut off. Still, efforts to end New Mexico’s oil and gas dependence remain in their infancy.
That may be in part due to oil and gas’ influence in state and local elections. Industry money was the largest source of state campaign contributions in 2020, according to an analysis from New Mexico Ethics Watch.
The industry’s contributions to candidates span the entire state, both political parties and almost every level of government. More than half of the oil and gas contributions between 2017 and 2020 came from individuals or entities outside New Mexico. Chevron, based in California, was the single largest contributor to candidates from New Mexico in both state and federal elections. Oklahoma-based Devon Energy and Texas-based Occidental Petroleum and Concho Resources also cracked the top five contributors.