Natural gas could revolutionize New Mexico’s economy. The fuel of which New Mexico is among the nation’s leading producers, has seen incredible growth in production with the advent of horizontal fracking and new drilling techniques resulting in a 25 percent increase in US production since just 2007.
The advent of cheap, plentiful natural gas has caused production and drilling to decline temporarily here in New Mexico, but the trend holds great opportunity for our state as well. Why is cheap, plentiful natural gas a good thing?
• It’s relatively green. Compared to coal, natural gas generates less than half of the carbon and a fraction of the sulfur dioxide, nitrogen oxides, and particles such as ash;
• It could drive a rebirth of American industry. Natural gas is a feed-stock in many chemicals and plastics. Having a cheap, plentiful supply here in the US could lead to the re-shoring of manufacturers and thousands of new jobs, a stated goal of the Obama Administration;
• It can be exported for the economic benefit of New Mexicans and the US as a whole. Japan is just one energy-poor nation that is eager to import natural gas from producers in New Mexico as the gas currently available in many overseas markets if four times as expensive as it is here.
So, why do natural gas prices remain depressed and why have producers like ConocoPhillips said they will suspend drilling operations in New Mexico?
Simply put, there is one major road block in the way, the Obama Administration. According to Bloomberg News, President Barack Obama’s administration is currently debating whether to allow these producers to export liquefied natural gas to countries with which the U.S. has no free-trade agreement. Until the Administration makes a decision, investments in the infrastructure necessary to export large amounts of natural gas from New Mexico will not be made.
Why would Obama not support an environmental win that could also boost the economies of New Mexico and several other natural gas-producing states?
Simply put, it’s an unholy alliance of “Big Business” and “Big Green”. Big business which includes Dow Chemical likes the concept of having feed stock for its products available at a fraction of the cost found overseas and, while the company supports free trade for its own products, they refuse to apply that same principle in ways that might reduce their competitive edge.
Big green groups like the Sierra Club are adamantly opposed to the fracking process which has been in use for decades. And, while natural gas is relatively clean, the group has opposed wind farms and solar projects as well and could accurately be described as simply “anti-energy.”
The point of this article is first-and-foremost to educate. New Mexicans uniquely benefit from the jobs and tax revenues associated with natural gas production and could benefit to an even greater extent if the Obama Administration embraces free trade in natural gas.
This article is meant to agitate as well. You can bet that “big business” and “big green” are swarming Capitol Hill and the White House looking to convince Washington that special favors for the few are actually beneficial to the many (when in reality that is not the case). We need average New Mexicans, the oil and gas industries, and our elected leaders including Gov. Martinez and our Congressional delegation to start making the case that free trade in natural gas will be a good thing for the Land of Enchantment and its people.
Our state has been poor for too long. That poverty exacerbates negative trends in areas as diverse as education, health, safety, and individual self-esteem. The boom in natural gas is a once-in-a-generation opportunity to embrace an economic trend that is clearly working in our favor. We need to demand that our representatives seize it!
Paul Gessing is the President of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, non-partisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.