Crude oil and natural gas are hot topics these days, and rightly so. They are major components of New Mexico's economy, and a major source of New Mexico's government revenues. According to a May 2021 Legislative Finance Committee report, oil and gas revenues generate about 25-30% of the State's annual general fund. The report notes this percentage fluctuates depending on economic conditions and the health of the energy industry, but there is no dispute that the energy industry makes a significant contribution to the annual State budget.
Vladimir Putin's invasion of Ukraine, and OPEC's recent decision to cut global oil production are also hot topics. Both are causing the price of gas to rise again. It is understandable, to me, to cut off Russian oil because Russian oil is literal blood money. Those Russian missiles raining down on Kyiv, killing civilians indiscriminately, are paid for by oil revenue. The Saudi Arabian engineered OPEC production cuts are less understandable, but it does not take a rocket scientist to see it does not help the typical American gas buyer. The Saudis know this; it seems they are purposefully giving a pocketbook-damaging middle finger to the US, and in so doing helping the civilian-killing Russian autocrat.
There is a conundrum here. Oil and gas production is vitally important to New Mexico, but oil and gas production is also key to giving geo-political leverage to Russia and Saudi Arabia. And those folks are not our friends. Russia is an authoritarian state led by a single man, and Saudi Arabia is a literal divine-right kingdom. The US fought a war against such regimes in 1776, and we won that war for good reasons that we have upheld all those years since then.
Oil and gas are going to be needed for a good long while, and the US (especially New Mexico) is producing a lot of both. Good! The US is mostly self-sufficient in energy production, but reliance on fossil fuels gives power to the Saudis and the Russians because energy production is a global thing. Not good.
I believe it should be US policy to develop and sustain an energy policy that does not depend on what the Russians or the Saudis are doing. It's a sensible policy to undertake a robust effort to put in place whatever needs to be done to make electric vehicles feasible.
Right now, they aren't except for urban mobility. We don't have infrastructure in place to support cross-country travel in a realistic way. Heavy equipment and farm vehicles are not ready to go electric. And for battery-powered vehicles, the charging stations are sometimes powered by…fossil fuels. It's like secondhand smoke.
None of these means we should stop moving forward with electric drive vehicles and equipment. But we have to be realistic in the tradeoffs and understand that this is a decades-long transition.
We should also be strategic in our planning in New Mexico and position ourselves for every step in this journey. Electric cars as currently designed require more copper. You know what? We produce that! Hydrogen is an interesting if imperfect energy source that merits consideration. Let's be a leader in the development and refinement of that source.
And what about carbon capture? Storing it underground is potentially hugely profitable and something we have the square mileage to do. North Dakota was the first in the nation to launch such an effort this summer, while maintaining its status as a top oil and gas producer. It's a good example for New Mexico to follow.
We all know the fossil fuel era will come to an end. But it won't end tomorrow or even at the end of this decade. While we work toward the renewable energy future, it doesn't make sense economically or strategically to spurn one of our state's greatest natural resources.
Darrell M. Allen is a retired employment and criminal defense attorney.
Merritt Hamilton Allen is a PR executive and former Navy officer. She appears regularly as a panelist on NM PBS and is a frequent guest on News Radio KKOB. A Republican, she lives amicably with her Democratic husband north of I-40 where they run two head of dog, and two of cat. She can be reached at news.ind.merritt@gmail.com.