For Western states relying of fossil fuel money, climate change agendas spell end to prosperity

In New Mexico, oil and gas account for 42% of the state government's income

Updated: May 16, 2022 - 3:50pm

The Facts Inside Our Reporter’s Notebook

U.S. government disbursements for the production of fossil fuel on federal lands have long supplied plenty enough money for state budgets in the country's western region – especially now with more reliance upon them during the Ukraine war. But they have few if any alternative revenue streams if and when more proposed more climate change regulations take effect.

New Mexico is the state that produces the second higher amount of crude oil in the country, and the top recipient of disbursements for fossil fuel production – with Alaska,North Dakota and Wyoming in similar situations, using the money from everything from teacher salaries and free college tuition to road maintenance and criminal justice reform.

In New Mexico, oil and gas account for 42% of the state government's income, and that number is going up as the war in Ukraine continues to disrupt global energy markets.

The superintendent of schools in Carlsbad, New Mexico, told the Associated Press that  to slow down oil production as a means to slow climate change the state would desperately need to "have a legitimate replacement" for the lost revenue.

"Whether you’re in the middle of the oil patch or in an area with no oil and gas drilling going on, those policies are going to impact revenue in every school district in the state," he said. 

Federal, state, and local governments receive close to $140 billion annually from the fossil fuel industry, according to the AP. Primarily, that funding comes from gasoline and diesel retail sales in each state, but oil-producing states depend on a variety of taxes, fees, and lease sales that pad their budgets significantly.

New Mexico Democrat Gov. Michelle Lujan Grisham, who is up for reelection this year says he administration is working to diversify the state's economy and simultaneously contain oilfield methane pollution. All the while, she remains opposed to limitations from the federal government that would stifle the state's ability to produce and explore oilfields. 

"We can work very effectively with oil and gas producers to both meet clean energy standards while still managing pretty incredible exploration of fossil fuels to meet the current energy demands of the world," she said last month.