A stealth bull market in oil prices has stunned the state's bean counters who never saw it coming. A barrel of oil is now fetching over $72 a barrel, a three year high that is stuffing Santa Fe's cash coffers. 

The latest forecast predicts a $350 million increase in state revenue, mostly attributable to the once again buzzing Permian Basin in SE NM. The state had already been carrying a surplus well north of $1 billion as a safety net for a possible drop in prices. The new money gusher is confounding the predictions of the Legislative Finance Committee (LFC).

New Mexico is now positioned to pass North Dakota to become the second biggest oil producer in the USA. Why?

Experts say that it’s cheaper to drill and complete oil wells in the Permian Basin, as compared to most other major fields. Moreover, there are certain parts of the shale play whose well-returns are the best in the U.S. This means that producers can make money and sustain growth there at the current price. According to estimates, the average breakeven prices in most of the Permian well locations is below $50 per barrel — the lowest in the United States.

New Mexico's dependence on oil revenue is not going anywhere. There's no way to replace the third of the state budget it funds. The challenge is how much money to put away for that next bear market and how much to risk in new and existing programs that could prove transformational for a state that ranks last or near last in key social conditions standings. The debate in Santa Fe remains one sided. It's always easier to put the cash under the mattress rather than tackle the stubborn and generational issues that have held us back. 

Just to mention two. Is there any reason with the kind of surplus money being generated that the state is not putting more than $133 million into expanding broadband in the next budget year when the need is several billion?

And is there any reason for the Governor and Legislature to bellyache over the repeated findings by the courts that the state is violating its own Constitution when it comes to providing fair and equitable public education? A poverty mentality has policymakers nibbling around the edges of these big issues, not an absence of resources.  

The committees new Dem US Rep. Melanie Stansbury has been named to are traditional for the ABQ  district but her comments on them offer a new wrinkle that emphasizes her progressive base: 

Okay, but don't forget to bring the pork home, or at least help Ben Ray out.

WHAT MIGHT HAVE BEEN 

That's ABQ Dem State Senator Michael Padilla backing up Gov. MLG as she announces that Padilla will examine the call center for the troubled Workforce Solutions Department. 

The snapshot took us back to December of 2017 when Padilla, a leading candidate for the Dem nomination for lieutenant governor, was forced out of the race by MLG. She was worried about sex harassment charges leveled against Padilla a decade previous while he was serving as a director of a city of ABQ call center. 

The city paid out $250,000. In one lawsuit a jury found against the city for subjecting one woman to a  “sexually hostile work environment.”

MLG called for Padilla to withdraw two weeks before he bowed out. It was the height of the Me Too movement and his candidacy in a Dem primary had become untenable, even if the charges were a decade old and not all that earth shaking. But the bad news wasn't over for Padilla. He was later unceremoniously dumped from his post as Senate Majority Whip, again because of the Me Too backlash.

Padilla was never rehabilitated to the point where he could seek statewide office but he has continued to busy himself from his South Valley Senate seat. In politics timing is everything. No one knows that better than Michael Padilla. 

State Sen. Howie Morales went on to win the 2018 Dem Lt. Governor nomination. He is expected to do so again next year. His tenure as Light Guv has been pedestrian. He has been given some responsibilities by MLG but no Governor really wants their #2 to shine and that has been the case with Morales. He is in the Guv's orbit but not her inner circle.

History says Morales' own climb up the ladder will get harder from here. If he is re-elected, the Guv's chair would be open in 2026 but competition for an open nomination would be keen. Then there's the fact that no lieutenant governor in state history has ever been elected governor.

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