SENATE MEMORIAL 20

54th legislature - STATE OF NEW MEXICO - first session, 2019

INTRODUCED BY

Gay G. Kernan and Stuart Ingle

A MEMORIAL

DECLARING FEBRUARY 6, 2019 "OIL AND GAS INDUSTRY DAY" IN THE SENATE.

     WHEREAS, New Mexico is one of North America's leading energy producers, ranking third in oil production and ninth in natural gas production according to data collected by the United States energy information administration; and

     WHEREAS, the Permian basin is at the center of an energy resurgence attracting interest from around the world; and

     WHEREAS, a 2018 resource review by the United States geological survey described the Permian basin as the "largest continuous oil and gas resource ever assessed" with an estimated potential for extraction of forty-six billion three hundred million barrels of oil plus two hundred eighty-one trillion cubic feet of gas and twenty billion barrels of natural gas liquids; and

     WHEREAS, the oil and natural gas industry is the largest private sector employer in New Mexico, providing more than one hundred thousand direct and indirect jobs for state residents; and

     WHEREAS, the revenues collected from New Mexico's oil and natural gas industry help fund the state's schools, roads and public facilities; and

     WHEREAS, the oil and natural gas industry in New Mexico is the state's leading educational supporter and provides over ninety percent of all school capital investment through the land grant permanent fund, also known as the permanent school fund; and

     WHEREAS, the New Mexico tax research institute, analyzing data from the legislative finance committee and the department of finance and administration, estimates that the oil and natural gas industry in New Mexico contributed approximately two billion two hundred one million seven hundred thousand dollars ($2,201,700,000), or roughly thirty-two percent, to the state general fund during fiscal year 2018; and

     WHEREAS, the oil and natural gas industry in New Mexico also contributed approximately seven hundred forty-nine million seven hundred thousand dollars ($749,700,000) to the corpus of the land grant permanent fund and the severance tax permanent fund in fiscal year 2018; and

     WHEREAS, as of fiscal year 2018, ninety-six and eight-tenths percent of the land grant permanent fund and eighty-seven percent of the severance tax permanent fund are composed of contributions made by the oil and natural gas industry in New Mexico through the payment of royalties and severance taxes; and

     WHEREAS, the New Mexico tax research institute estimates that the oil and natural gas industry generated approximately eight hundred twenty-two million three hundred thousand dollars ($822,300,000) in funding for public schools in New Mexico and approximately two hundred forty million five hundred thousand dollars ($240,500,000) for colleges and universities in the state in fiscal year 2018; and

     WHEREAS, according to the United States department of the interior, New Mexico earned six hundred thirty-four million nine hundred thousand dollars ($634,900,000) from energy and mineral production on federal and tribal lands during fiscal year 2018, making it the number one state for earnings last year; and

     WHEREAS, approximately eighty percent of year-over-year growth in estimated revenue collection in fiscal year 2018 has been attributed to increased oil and natural gas production and higher severance tax collections, improved oil and natural gas industry-related rents and royalties and additional gross receipts tax revenue from Eddy and Lea counties in the Permian basin, according to legislative finance committee economists; and

     WHEREAS, natural gas is the second-largest source of electricity generation in New Mexico and provides heating for two-thirds of the state's households, according to the United States energy information administration; and

     WHEREAS, New Mexico's oil and natural gas producers are committed to innovating and investing in cutting-edge technologies to further minimize the industry's environmental footprint while safely and responsibly growing energy production; and

     WHEREAS, the number of rigs operating in New Mexico in 2018 was more than double the number from the previous year; and

     WHEREAS, oil and gas producers, independent of the revenues paid to the state through royalties and taxes, invested millions of dollars in the ten New Mexico counties in which they operate, providing scholarships to students, rewards to teachers, investments in emergency services and equipment and contributions to schools and youth community programs; and

     WHEREAS, an unprecedented coalition of sixteen oil and gas companies, each represented by its chief executive officer, formed the Permian strategic partnership to work in partnership with local stakeholders to address infrastructure challenges and strengthen communities across west Texas and southeast New Mexico; and

     WHEREAS, the Permian strategic partnership completed an initial analysis in 2018, which identified the need for safer roads, superior schools, quality health care, affordable housing and a trained workforce as priority focus areas across the Permian basin; and

     WHEREAS, the companies participating in the Permian strategic partnership have committed one hundred million dollars ($100,000,000) for investments in the communities impacted by oil and gas production in the basin; and

     WHEREAS, oil and gas industry companies remain committed to collaborating with New Mexico's residents, non-governmental organizations and public sector stakeholders to inform and safeguard the development of positive and sound public policies regulating industry;

     NOW, THEREFORE, BE IT RESOLVED BY THE SENATE OF THE STATE OF NEW MEXICO that February 6, 2019 be declared "Oil and Gas Industry Day" in the senate; and

     BE IT FURTHER RESOLVED that copies of this memorial be transmitted to the New Mexico oil and gas association, the Permian basin petroleum association and the independent petroleum association of New Mexico.

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