[Editor's Note: This is likely to be a several part series of articles.]

By Mary Alice Murphy

The second work session of each month held by the Grant County Commission is not followed by a regular session. It usually allows for presentations.

The Commission work session on March 23, 2021 included two presentations—the first from the NMSU Arrowhead County Level Revenue and Expenditure Analysis of Eddy County, with Eddy County Commission Ernie Carlson giving most of the presentation, using the graphs and words of the author of the analysis, NMSU Arrowhead Center program director, using his own company, KW Consulting, Kramer Winingham.

Carlson said he kept getting questions from legislators asking how they could explain to their constituents why they had supported items that benefitted southeast New Mexico rather than their own districts. Carlson said it is because southeast New Mexico contributes much more to the state budget than any other area of the state.

Eddy County is the overall ranked No. 1 net contributing county to the state budget with a contribution to the state per person at $101,795 and expenditure by the state per person at $19,195 with a net per person of $82,599. Contrast that to Bernalillo County which has a contribution per person of $28,657 and an expenditure per person of $23,990 and a net of $4,667, ranking fourth in the list. Lea County is second, with more contribution, but also more expenditure per person, Los Alamos County is third and San Juan County fifth. In the report on findings, Grant County has a contribution per person of $15,238, with expenditure per person at $28,167, making the net per person a negative -$12,929.

Carlson noted the analysis was done to show legislators what they receive from counties and what they spend in counties, such as in the state's southeastern counties, where Eddy and Lea are located as high contributors to the state's budget. He pointed out that revenues and expenditures per county per capita are positive in only some counties.

He said 35 percent of the state budget is from oil and gas activities, with an additional 5 percent related to oil and gas. "We wanted and needed this third-party study from an independent source serving all of New Mexico. This analysis shows how much a county is contributing to the state budget and how much it is getting back from the state. Most of what Eddy County sends to the state is from oil and gas, with a net $4 billion a year."

Carlson said when people talk about diversifying the economy, it's hard to think of anything that compares to the oil and gas industry. "What could we replace the oil and gas revenue with? For instance, many mention recreation as a diversifying element, but the estimate is that it will bring in about $100 million a year. That doesn't replace oil and gas billions. Instead of recognizing the benefits of oil and gas revenues, they talk about a moratorium on fracking, for instance. That would kill the oil and gas industry. What this does is tell other states that the state of New Mexico does not support oil and gas."

He showed a map of the Permian Basin, most of which is in Texas, but Eddy and Lea counties benefit from the oil and gas found in the portion Permian they are located over. He pointed out the Delaware Basin, which is inside the Permian Basin, with a small portion in New Mexico. Most of the land being developed in New Mexico for oil and gas production is federal or state land. In Texas, it's mostly private land.

"When industry sees New Mexico not supporting it, it leaves the state," he continued. "We lost four drilling rigs that went right across the state line about seven to 10 miles away into Texas. New Mexico is losing that revenue. Texas has fewer regulations on the industry and most of the land is privately owned. Companies say they don't have to worry about more regulations in Texas, like they do in New Mexico."

Carlson said the state had about $722 million in lease sales, "but now the state is telling those who purchased the leases that they can't drill on their leased land. That's not right."

According to Carlson, Eddy and Lea counties combined provide about 70 percent of the education funding for all of New Mexico. "If you put a moratorium on drilling, that results in a 21 percent loss to the education funding. Where do you find that 21 percent? Do you tell the teachers you can't pay them? Do you tell the schools the state can't pay for technology? I don't see why we are not working as a whole to improve the oil and gas industry. We're 50th in education. That's sad. We're trying to get the word out that southeast New Mexico is important to the whole state. The state has donor counties and recipient counties. It's most important to the recipient counties to improve their roads and other infrastructure to have the revenues coming in."

He said the Permian Basin has 8500 DUC (drilled, uncompleted) wells, because of lack of infrastructure to access them or get the production to market. 4,021 are in the Delaware Basin.

"We are asking counties to support us, so that we can help you," Carlson concluded.

Carlson asked for questions.

District 4 Commissioner Billy Billings said he didn't have any questions, but he thanked them for the presentation.

District 1 Commissioner and Chair Chris Ponce said he too appreciated the presentation.

The next article will address the next presentation, a proposal for a county health and human services department.