Just after midnight on Tuesday, January 1, freshman governor of New Mexico Michelle Lujan-Grisham was officially sworn into office in an intimate ceremony in Sante Fe.
Later that day, the newly elected governor proclaimed in her inauguration speech, “It is time for us to thrive.”
“Thrive” is an interesting word choice for a woman who seems determined to undermine one of the most significant oil and gas discoveries of the last decade.
The Booming Permian Basin
Though outsiders to the oil and gas industry associate the Permian Basin primarily with the sprawling oilfields of West Texas, a sizable portion of the oil deposit crosses the border into the southeastern section of New Mexico. For years, the citizens of New Mexico have reaped the rewards of the Permian Basin; in late 2018, that comfortable position looked even sweeter thanks to a monumental discovery.
In December, the United States Geological Survey updated their estimate of the amount of oil and gas in the Delaware Basin, one of the regions into which the Permian is divided. According to the USGS, the Delaware Basin holds a massive 46 billion barrels of oil, 281 trillion cubic feet of natural gas, and 20 billion barrels of natural gas liquids.
According to Ryan Flynn, director of the New Mexico Oil and Gas Association, the Delaware Basin discovery means that the New Mexico oil and gas industry has the reserves to meet the United States’ energy needs with zero help.
The Changing of the Guard
The New Mexico oil and gas scene should be on solid ground, however, thanks to a shifting dynamic on the state’s political stage, the energy sector has reason to be nervous.
Former Rep. Michelle Lujan-Grisham ran for governor on a platform of diversification. She’s been quoted as saying that the state should serve as a “national example of what a clean energy revolution looks like.”
There’s nothing wrong with renewable energy, obviously, but Lujan-Grisham’s past indicates she feels the need not only to push renewables, but cripple the oil and gas industry, as well. As a representative, she made constant overtures in favor of oil and gas regulation. In 2017, she voted against offshore drilling in the Gulf of Mexico. In 2018, Lujan-Grisham wrote two letters to Secretary of the Interior Ryan Zinke supporting methane regulations and restrictions on drilling.
Late last year, Lujan-Grisham pressured state regulators to postpone a decision that would have granted a Texas-based company some leniency well locations .
A Precarious Situation
When the holidays officially end (next Monday or so), Governor Lujan-Grisham will inherit a $1.2 billion surplus, most every cent of which is courtesy of New Mexico oil and gas. It’s that surplus that has allowed New Mexico’s residents to thrive for the last several years.
Lujan-Grisham’s quest to diversify New Mexico’s economy is laudable (and quite intelligent). That said, here’s hoping the New Mexico oil and gas industry doesn’t fall victim to Lujan-Grisham’s desire to mix things up.