By GREG SWIFT
El Rancho
The New Mexico fossil-fuel industry often exaggerates state government’s reliance on fossil-fuel taxes. They ignore the role of the Permanent Funds, which were wisely established as a diversified investment account to protect our state against the inevitable loss of revenue when extraction declines or ceases. The New Mexico Oil & Gas Association’s July 18, 2025, op-ed in the Los Alamos Daily Post (link) illustrates this typical industry spin:
“The oil and gas industry contributes more than $13 billion annually to the state budget” — Clarification: In FY 2023, of the $12 billion in oil and gas taxes, $3 billion went to the state general fund, $1 billion to local governments, and $8 billion to the Permanent Funds. If oil and gas production ceased tomorrow, state and local governments’ operating budgets would lose $4 billion annually, not $12 billion. The Permanent Funds would persist.
“Nearly one-third of New Mexico’s General Fund comes from oil and gas revenues” — Clarification: Some of that one-third comes from dividends from the Permanent Funds, whose assets are due to past oil and gas production. If oil and gas production ceased tomorrow, state government would still collect those dividends, so General Fund revenue from current oil and gas taxes would drop by between a fifth and a quarter, not nearly one-third.
The reduction in methane emissions outlined in the op-ed is indeed a significant step in climate-change mitigation, thanks in large part to the 2021 enactment of stricter regulations (19.15.27.8 NMAC), which followed Governor Lujan Grisham’s 2019 executive order addressing climate change and energy waste.
What comes next will be much tougher: The global phaseout of fossil-fuel production, necessary to keep the climate crisis from becoming a catastrophe, will be extremely challenging for New Mexico. We can’t let industry’s spin on their state-tax contributions and emissions reductions trick us into doubling down on fossil fuels, instead of winding down.
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