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| Garcia Richard |
State Land Commissioner Stephanie Garcia Richard has made a sudden turn and is now going after the oil boys. In what appears to be an unprecedented decision she has halted leasing for oil drilling on prime pieces of state trust land until the royalty rate is raised to 25 percent from 20 percent, the same as Texas.
This comes after six years of Garcia Richard, who took office in 2019, letting the industry be.
She did mention a royalty rate increase upon taking office, but a review of her news releases for the following years reveals no mention of increasing the rate. So her full-throated attack has raised the specter of politics playing a role. The Commissioner defends her decision saying:
I am a fiduciary on behalf of the school kids. It’s my job to make them the most money possible, and leasing these tracts below market rate means that school kids are subsidizing the oil and gas activity.
But insider Democrats are saying that the Commissioner, a former six year state legislator, is planning a bid for the '26 Dem lieutenant governor nomination and that her punishment of oil resonates with the left-wing of the Democratic Party which has major influence over who gets nominated.
They add that her call for the higher rate is a trigger for some Dems and could help Garcia Richard with fund-raising. Her last campaign report in October showed a meager cash balance of $5,800.
HIKE STALLS
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A member of the Senate Finance Committee tells us the votes still "are not there" for a hike, although Finance Committee Chairman George Muñoz, who has seemed more wary of the oil industry in recent months, came with a statement that showed irritation:
Muñoz said the (royalty rate) bill got held up when he asked about the total tax burden on petroleum producers and didn't get an answer. I agree with her withholding the leases because I'd love to have the best wells in New Mexico saved for our future, not spent today. . . The more we save for the future, the better off we are.
TEXAS VS. NM
Garcia Richard has every right to advocate for a royalty hike and make her argument that it would mean significantly more money for the state's Permanent Fund over the long run. But opponents say comparing New Mexico and Texas rates is like comparing apples to oranges. GOP Sen. Gay Kernan:
You cannot compare Texas and New Mexico because so much land in Texas
is private. In New Mexico, we're mostly federal and state
land with very little private land. It's just different.
Also, the state has taken in unprecedented revenue from oil and gas the last several years, so much so that legislators have been stymied over how to put all that loot to work. They have resorted to establishing numerous trust funds worth billions from which the interest generated goes to a variety of programs including nearly $1 billion for a higher education trust fund.
With this backdrop of historic revenues, raising taxes on any business entity now is like pushing a rock up Wheeler Peak. Even socially useful taxes like a boost in the tax on alcohol in a state ranked worst in the nation for alcohol deaths, could not get through the Roundhouse.
LA POLITICA
The sitting Governor offers some advice to the Commissioner:
Whether I agree or disagree, I respect her decision. . . An approach that has worked well for my administration is to try to create partnerships and get everybody with a vested interest to the table to make decisions. We want to make sure the state holds the industry accountable, but this is an energy state, and we need to listen to all stakeholders.
Meanwhile, the other dust that is being kicked up on the '26 campaign trail tells us that the two prominent names being mentioned by the Great Mentioner for the Dem Guv nomination remain Sen. Martin Heinrich and Sec. of Interior Deb Haaland. But if Republican Nella Domenici wounds Heinrich in his re-election bid this fall, his chances could be hurt.
As for Garcia Richard's chances for the lieutenant governor nod, she is a proven vote-getter and while cynics may decry her move on the royalty rate, she would be a name player in the nomination contest.
ANOTHER DIVIDE
To further illustrate the divide over oil drilling among state Dems, Rep. Gabe Vasquez of the southern district, in a heated contest for re-election with Republican Yvette Herrell, broke with his liberal NM House colleagues last week on a key energy vote regarding the controversial practice of fracking for oil which is common in the SE NM oil fields in his district:
HYDROCARBON FRACKING: The House has passed the Protecting American Energy Production Act (H.R. 1121), sponsored by Rep. Jeff Duncan, R-S.C., to bar an executive order by the president banning hydraulic fracturing (fracking) of oil and natural gas wells without Congressional authorization, and state that states should continue to be the primary regulators of fracking. The vote, on March 20, was 229 yeas to 188 nays. NAYS: Stansbury, Leger Fernández YEAS: Vasquez
Keep running, Gabe. Just don't look back. Someone may be gaining on you.
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(c)NM POLITICS WITH JOE MONAHAN 2024