🏜️ Happy Thursday from the high desert! Thanks to everyone who came out in Santa Fe yesterday to see Nick and Chuck McCutcheon chat with New Mexico officials.
🗓️ We'll be on recess schedule again next week, so look for us in your inbox Tuesday and Thursday afternoon, and sooner if there's breaking news.
🎶 Today's last song comes from Stephanie Garcia Richard, New Mexico Public Lands commissioner: "Timefighter" by Lucy Dacus.
1 big thing: New Mexico's energy balancing act
New Mexico officials are trying to hang on to their climate goals as they fight President Trump's energy policies, Nick writes.
Why it matters: New Mexico is among the Democratic states trying to keep climate in the spotlight amid federal rollbacks and DOGE-driven cuts.
- It's a clean-energy battleground: It has lots of federal land with both a statewide clean energy law and a giant oil and gas industry in the Permian Basin.
The big picture: Freezes on IRA and infrastructure law money — and potential rollbacks of clean energy tax credits — threaten New Mexico's renewable energy targets and efforts to plug orphaned oil and gas wells, state officials told us yesterday at an Axios event in Santa Fe.
- "The Inflation Reduction Act money is very much in flux right now," said Stephanie Garcia Richard, state commissioner of Public Lands.
- "There has been a pullback on support of these large renewable energy projects. That really threatens all of the progress that New Mexico has made."
- As one example of how that could affect New Mexico, state Energy, Minerals and Natural Resources secretary Melanie Kenderdine said her office brought in $400 million in federal money in the last year alone.
By the numbers: Garcia Richard said New Mexico has nearly 2,800 megawatts of renewables generation on state land, up from 400 MW when she started her term in 2019.
- That's driven by its 2019 Energy Transition Act, which requires 50% renewable energy statewide by 2030.
Between the lines: New Mexico has a dual challenge of keeping that buildout going as electricity demand rises and, eventually, reckoning with its reliance on a lucrative oil and gas industry.
- The state derives a large chunk of its budget from oil and gas revenue and is the nation's second-largest producer of crude oil.
- Democratic Gov. Michelle Lujan Grisham recently signed a law that raises the state royalty rate from 20% to 25%.
Yes, but: Even with oil and gas demand projected to remain for decades to come, the bonanza won't last forever.
- Missi Currier, CEO of the New Mexico Oil and Gas Association, likened production in the Permian to "a nice long gondola ride" that will see production continue.
- At the same time, she said, "New Mexico is a one-trick pony when it comes to our economy.… While we want to continue producing at high levels, we have got to find a way to diversify."
Garcia Richard said the state should have started that conversation "about a decade ago."
- "We don't have time on our side for this. I've always said that we're never going to replace the money from oil and gas development one-to-one with any other industry."
