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Joe Biden Is Worse Than Jimmy Carter

This article appeared at National Review Institute’s Capital Matters on September 23, 2021.

Don’t conflate Carter and Biden on Policy

By Paul J. Gessing

Amid the ongoing debacle in Afghanistan, some on the right have started making comparisons between the presidency of Jimmy Carter and that of Joe Biden. The parallels between the Iranian hostage crisis and the disaster in Afghanistan are limited, but it is notable that  the hostage crisis was the unforeseeable consequence of a series of events that the U.S. was in not in any real position to control (which is not to claim that Carter handled the events leading up to the fall of the Shah particularly well, on the contrary).  By contrast, what is now unfolding in Afghanistan is the direct and all too predictable consequence of a specific decision that — down to its disastrous timing — was ultimately Biden’s to take.

Another seeming parallel between Carter and Biden is the problem of inflation. Of course, inflation was a major issue throughout the Carter administration as well as during the Nixon and Ford years, with rates bouncing around wildly through much of the decade. But Biden’s inflation problem, like the Afghanistan debacle, is likely to end up resting  mostly on Biden’s own shoulders if his spending plans go through, with the rate having jumped from 1.4 percent in January when he took office to 5.39 percent in June.

To be fair, at least some of the inflation that we have seen so far can be put down to both the supply chain disruptions that have followed the pandemic and measures introduced, generally with a high degree of bipartisan support, during both the Trump and Biden presidencies, to help offset the impact some of the pandemic’s effects . The Fed, too, has played its part.

Persistent inflation could be avoided, but between the passage of the $1.9 trillion American Recovery Plan and the pending $1.1 trillion “bipartisan infrastructure” bill and the Democrats’ planned $3.5 trillion spending bill,  it is hard to be optimistic. The only question is whether Congress will oblige.

Carter, on the other hand, nominated Paul Volcker to chair the Federal Reserve. While there are disagreements as to why he did this, there is not too much dispute that he knew that Volcker would take a tough line on inflation, which he quickly proceeded to do. Biden remains oddly indifferent to the risk of inflation.  Hopefully, Congressional Republicans and Democratic moderates such as Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ) will thwart Biden’s spending ambitions.

As if the scales were already not tilted in Carter’s favor relative to Biden’s (at least to date), the starkest differences between the two can be found in the area of economic regulation. On this transformative issue not only was Carter much better than Biden, but he may be one of the most notable deregulatory presidents in modern history. He’s almost certainly the most unexpected.

As president, Carter led the way in deregulating America’s airlines and  interstate trucking, as well as freight railroadsand even beer brewing. Each of these reforms has stood the test of time, resulting in cheaper transportation, more industry competition, and better living standards for millions of Americans.

While Americans often complain about cramped quarters on airlines, the actual preferences of most ticket purchasers continues to be for inexpensive, “no frills” options. Meanwhile, just last year over 1,000 supporters of the 1980 Staggers Act, which deregulated much of the railroad sector, signed a letter reaffirming their support for the policies outlined in that bill. As noted in that letter, since the act’s passage,  “[r]ail traffic has doubled, rail productivity has more than doubled, rail rates are down more than 40 percent, and recent years have been the safest on record.”

In other words, deregulation worked, and it has been working to our benefit for decades since.

Lest you think you haven’t benefitted adequately from more efficient transportation, Carter also signed legislation that legalized craft brewing, something that  helped pave the way  to the numerous innovations in beer brewing that have pleased millions of Americans, from hop-heads to those who prefer fruit and chocolate-infused flavors and everything in between.

And how is Joe Biden’s record by comparison? He hasn’t touched brewers (yet), but he is already attempting to re-regulate freight railroads. A July executive order on “providing competitiveness in the American economy” encouraged the Surface Transportation Board (STB) — the federal agency that oversees economic regulations for private freight railroads like Norfolk Southern and Union Pacific — to consider imposing “forced access” more regularly.

This means that privately owned and maintained railroads could be forced to turn over traffic to competing railroads at potentially below-market rates – a clear violation of private property rights and free market enterprise as we know it. The order is akin to net neutrality for railroads. Railroads already voluntarily allow access to their competition in order to improve service across the industry, but the last thing Americans or freight railroads need is for Uncle Sam to get back into the business of heavily regulating railroads.

To date, the Biden administration has done virtually nothing to deregulate the economy. On  the contrary, aside from its  spending spree, what passes for “accomplishments” in the Biden administration largely involve undoing deregulatory executive actions on the part of the Trump administration on the environment, or imposing entirely new, onerous regulations  such as the ban on new oil and gas permits on federal lands, which has now run into trouble in the courts

These points may not convince many conservatives that Jimmy Carter was a good president (and to be clear, I don’t think he was, myself) , but perhaps they will convince some that Carter had significant and lasting accomplishments to show for his  four  years in office. Given his track record to date, Joe Biden is beginning to make  Jimmy Carter look pretty good. That may not say that much about Carter, but it says a lot about Biden.

 

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Comprehensive energy approach vital to NM future

The following was written by RGF Board member Steve Dodson. It appeared in the Albuquerque Journal on September 19, 2021.

New Mexico lawmakers must put politics to the side and embrace an all-of-the-above approach to sustainable energy if our state is to recover from the pandemic and advance our shared goal of combatting climate change.

A federal judge recently ruled in an ongoing lawsuit that the Biden administration must, for now, rescind its pause on oil and gas leasing on federal lands after more than a dozen states sued, citing that they had met the threshold for proving that the ban would result in significant community harm and economic loss. This comes on the heels of former New Mexico congresswoman and current Secretary of the Interior Deb Haaland’s testimony before the House Natural Resources Committee where she made clear there is no “plan right now” to enact a permanent ban on oil and gas leasing on federal lands.

This is all welcome news for New Mexicans and speaks to the need for honest conversations around the role oil and gas must continue to play in New Mexico’s future.

Our state has long been reliant upon the jobs and funding provided by oil and gas operations for critical public outlays like education, health care and infrastructure. Federal lands currently compose nearly 35% of our state’s total area – a permanent leasing ban would immediately threaten the welfare and future of our state while offering no direct alternatives to replace lost public funding and jobs.

Serving on the board of the Rio Grande Foundation, I am proud to work toward bringing meaningful reform to New Mexico. After one of the most devastating periods in history, marked by financial hardship and tremendous loss, it is vital – now more than ever – that energy policy decisions are balanced and take into consideration the vital economic benefits the industry provides to New Mexicans in every corner of the state.

The tax revenues derived from oil and gas operations are essential to N.M.’s economy, bankrolling schools, hospitals, roads and other infrastructure without hurting the pockets of N.M.’s taxpayers. The state’s Land Grant Permanent Fund, also known as the Permanent School Fund, is financed directly by oil and gas operations and is one of the largest such funds in the United States. It annually provides over three-quarters of a billion dollars to New Mexico’s public schools, universities and other related beneficiaries – in 2021 it is estimated the fund will produce roughly $836.5 million in benefits.

Furthermore, New Mexico’s … unemployment rate of 7.9% is tied for the highest in the entire country according to the Bureau of Labor Statistics. The oil and gas industry supports 134,000 jobs and contributes over $16 billion to our state’s economy annually. If this leasing ban were ever to be made permanent, it could result in (the loss of) over 60,000 jobs and nearly $1.1 billion in public funding.

Finally, the oil and gas industry is crucial to our national energy transition and continuing to meet consumer demand without increasing energy prices. Instead of focusing on demonizing oil and gas producers, our officials should be working hand in hand with them to incentivize innovative solutions like Carbon Capture and Storage (CCS) that can reduce carbon emissions without destroying jobs and revenues.

Although the recent court ruling and Haaland’s comments suggest the current leasing pause will come to an end, nothing is for certain. As some of our state’s lawmakers continue to try to appeal to partisan groups in Washington rather than their own constituents, it is important for all of us to remind them a balanced approach is necessary for New Mexico’s energy and economic future.

The Rio Grande Foundation is an independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.

 

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Oil and gas both a blessing and curse for New Mexico

The following appeared on Sep. 16, 2021 at KRWG.

 

 

 

The news that New Mexico’s oil and gas industry has again generated record-breaking revenues for the State was welcomed by policymakers and interest groups alike. But the disconnect between the State budget picture and the economic situation for average New Mexicans could not be starker. And this is one of the “problems” associated with the state’s dependence on oil and gas.

Don’t get me wrong: we at the Rio Grande Foundation fully support the oil and gas industries. The so-called “progressive” Democrats in the Legislature who signed a letter to the Biden Administration earlier this year in support of the Administration’s illegal moratorium on new permits on federal lands definitely believe oil is a curse. We believe that New Mexicans are the recipients of a fabulous gift and that there is no reason for us to be among the poorest states in the nation as is currently the case.

New Mexico is “cursed” by bad politicians, not by its bountiful resources. But those resources all too often prop up bad decisions made by our political leaders. Until voters hold them accountable, New Mexico, blessed as it is by nature, will continue to founder.

Our poverty contrasts with our resource wealth in the same way as the new revenue picture contrasts with the state’s outsized unemployment rate. At 7.6 percent, New Mexico has the 2nd-highest jobless rate in the nation. It is not entirely surprising that our workforce participation rate which measures the percentage of people actually engaged in gainful work, also lags badly.

New Mexico’s poverty rate is high (3rd-worst in the nation) and according to the US Census Bureau the state badly lagged its region in population growth over the past decade. We were named the number one “economically-failing” state another recent report and the “progressive” Voices for Children’s own report ranks us a dismal 49th.

It’s not a lack of money or government spending. Government in New Mexico is already bigger than it is in our neighboring states by quite a bit and our faster-growing neighbors spend much of their money on state/local government than we do. It is anathema to New Mexico’s “progressives,” but it is time to return a healthy chunk of this surplus to the private sector.

The low-hanging fruit and an absolute “must” for the 2022 legislative session is reform of our state’s onerous, business-killing, and regressive Gross Receipts Tax (GRT). This regressive tax directly and unnecessarily impedes the growth of small businesses in our state. Reforming the GRT to eliminate taxes on business inputs is a must this session. It can be done with relatively minimal revenue reductions, but, reducing high GRT rates would be a welcome move.

Social security tax reform has also been discussed in recent years. The tax brings in approximately $85 million annually. Eliminating it would make New Mexico a more attractive destination for retirees.

Finally, while it is a bit of a stretch for such a left-leaning body, New Mexico could do a lot to make itself more attractive as a business destination by simply doing away with its corporate income tax. The tax generates about $130 million annually or about 1/10th of next year’s surplus. This is eminently “do-able” and when combined with long-overdue GRT reform would go a long way to getting New Mexico’s economy moving again.

New Mexico’s Democrat-controlled legislature has a once-in-a-generation opportunity to use this windfall to diversify New Mexico’s economy. If they fail, voters must hold them accountable.

Paul Gessing is president of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility

 

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Heinrich coming for your gas heater, stove

The following appeared in the Albuquerque Journal on July 21, 2021. While the newspaper cannot include hyperlinks to the data used in the piece we have added those links here:

Natural gas is a clean and affordable fuel they use to cook, heat their water, and provide warmth in the winter. Millions of Americans appreciate its benefits, even if they don’t think about them.

Just because you don’t think about natural gas doesn’t mean radical environmentalists (including New Mexico’s senior US Senator Martin Heinrich) aren’t. Heinrich recently wrote in the New York Times that “working to electrify our vehicles, homes and businesses is a critical part of achieving economywide net-zero emissions.”

He’s pushing legislation in Congress and for funding in the “infrastructure” bill for “electrification” – which is really another way of saying phasing out or banning your natural gas stove, oven, and furnace and requiring you to use electric heat and stoves.

Sacramento recently became the 46th US city to begin “phasing out natural gas in new buildings.” It’s not just happening in California. According to the Wall Street Journal, “Seattle, Denver and New York have all either enacted or proposed measures to ban or discourage the use of the fossil fuel in new homes and buildings.”

Just a decade or so ago the Sierra Club and other environmental groups supported natural gas as a cleaner-burning alternative to coal. Now, Senator Heinrich – counter to the economic interests of the state he represents (New Mexico is a major natural gas producer) and against the expressed preferences of consumers who use such appliances – is pushing to eliminate natural gas.

The push for a natural gas ban is premised on the idea that we should replace fossil fuels with wind and solar technologies that put us on a path to “net-zero emissions.” Of course, we’re not just talking about replacing all existing electricity generation; just 10% of current electricity production comes from wind, solar, and geothermal combined. Experts say “electrification” would increase US electricity consumption by 40 percent.

To say the least, Sen. Heinrich’s “electrification” scheme will require astonishing amounts of new electricity generation (at great economic cost) not to mention batteries to ensure reliability and new transmission lines to distribute it. We’ll be the ones paying for all that new redundant generation.

It’s an even bigger problem considering the reliability and demand issues already facing the Western United States this summer and utilities’ (including PNM’s) difficulty bringing new “renewables” online.  

And then there are consumer preferences for natural gas, which for some reason get casually ignored. You will have to search far and wide to find an electric stove in your favorite restaurant. That’s because natural gas is superior to electricity for cooking on both food quality and price.  Banning natural gas in restaurants means you would be waiting longer for your favorite meal while also paying more.

Any serious push for “electrification” of our economy will require massive government subsidies (thus Heinrich’s push in the current “infrastructure” bill), with electricity reliability already an issue the reliability of natural gas can be a literal lifesaver.

We all want clean, affordable, and reliable energy. Natural gas provides all three. And while the US has been steadily-reducing CO2 emissions for over a decade, China now emits more CO2 than the rest of the developed world combined(that includes the US, Canada, Europe, and Australia). Sen. Heinrich’s forced-shift to all-electric in the US will be costly and won’t achieve the environmental gains he seeks.

The Rio Grande Foundation is an independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.

 

 

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Biden Energy Policy: How Red States Saved New Mexico

The following appeared on July 9, 2021 at National Review’s Capital Matters:

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On June 15, 2021, U.S. District Court Judge Terry Doughty issued a preliminary injunction halting the Biden administration’s moratorium on new oil and gas permits on federal lands and in federally controlled offshore areas in the Gulf of Mexico. The lawsuit was filed by 14 states that were set to lose out on significant oil and gas development if the moratorium remained in place indefinitely.

Ironically, of all the states impacted by Biden’s moratorium, increasingly deep blue New Mexico had the most to lose. According to an analysis from the American Petroleum Institute, New Mexico would be expected to lose over 62,000 jobs and $1.1 billion in revenue from the moratorium. Ranking third among all states in oil production and a leader in natural-gas production as well, New Mexico would have lost nearly half of total production in both had the moratorium stuck.

Wyoming, the next-most-affected  state would have lost just a bit over half as much revenue ($641 million) as New Mexico. And, with an annual General Fund budget of $7.4 billion, that is a lot of revenue to make up. Unfortunately, in this world of “red” and “blue” states, self-interest was not enough to get New Mexico Attorney General Hector Balderas to join the lawsuit.

So, no thanks to any of our own elected officials (or former New Mexico Congresswoman, now Interior Secretary, Deb Haaland), New Mexico likely just dodged a dagger aimed straight at the heart of the state’s economy. Better still, a combination of market forces and geological discoveries means that New Mexico’s oil and gas industries (like America’s) could be heading into an era of unprecedented prosperity, if  the political forces arrayed against them can be held at bay.

Prior to the COVID-19 pandemic, oil production in New Mexico’s Permian Basin (which it shares with Texas) had been growing rapidly. As recently as 2010 New Mexico was the 7th-leading oil-producing state in the nation with 65 million barrels a year. By 2020 (despite the pandemic), annual production had risen to 379 million barrels.  

Now, it appears that New Mexico is on the verge of surpassing North Dakota to become the nation’s 2nd-largest crude-oil producer. March 2021 data (the most recently available) from the Energy Information Administration (EIA) show New Mexico producing 1.16 million barrels of oil per day compared to 1.11 million in North Dakota.

Like most of New Mexico’s post-2010 surge, the state’s continued growth is being driven by new discoveries that are accessible through new technologies; notably, “fracking.” Furthermore, as the Permian Basin  has already been producing large quantities of oil and natural gas for decades, the infrastructure to access and move the product is already in place.

As if all of these convergent factors acting in support of New Mexico’s oil and gas industry weren’t enough, while motorists may not be thrilled, prices at the pump clearly show that the industry is doing quite well in the wake of COVID-19. If analysts from Bank of America are right, the boom is just getting started. They predict that by 2022 crude-oil prices could hit $100 per barrel. This means even more jobs and tax revenues flowing into New Mexico and it means reliable (if not necessarily cheap) energy for Americans.

Ironically, despite all of this good economic news for the state, New Mexico’s history of rule by left-wing Democrats has left it in pretty bad shape, thanks in no small part to the intense lockdowns during the pandemic. Oil and gas and the money it brings may help, but if the state’s political leadership doesn’t do a better job managing the boom, the next bust could be harder to manage.

According to the Bureau of Labor Statistics data for May, New Mexico’s unemployment rate is 2nd-highest in the nation at 8 percent. Worse, due to the state’s poor performance on a variety of education, economic, and crime rankings, New Mexico was recently ranked as the worst state in the U.S. in which to live. Agree with the data or not, the Land of Enchantment has some deep-seated and serious issues to deal with.

And, while most problems are made easier with money as opposed to without it, a system where politicians have plenty of resources to spend regardless of the success or failure of their economic policies is not a great system. In fact, it is a system that has fueled awful government in places like Saudi Arabia and Venezuela (to name just two poorly governed petro-states).

Will things be different this time for poor New Mexico? The political and economic situation are extremely volatile and it is hard to tell. With energy largesse flowing in, the Land of Enchantment  could finally add a strong economy  to its name. Political will has always been the missing ingredient.

PAUL GESSING is president of New Mexico’s Rio Grande Foundation.

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Democrats walk fine line on energy

The following appeared in the Albuquerque Journal on April 18, Santa Fe New Mexican, and other New Mexico media outlets.

If there were an overall theme for New Mexico’s current political situation it would be the ongoing attempts by Democrats to placate their environmentalist base which opposes traditional energy sources while at the same time keeping energy dollars flowing into the State’s coffers.

The Biden Administration’s moratorium on oil and gas permitting is the most notable example of this conflict. Gov. Lujan Grisham has publicly spoken out about it, but Attorney General Balderas has refused to join a lawsuit challenging the policy that was recently filed by a dozen states. None of those states have as much to lose as does New Mexico, but our elected leaders are unlikely to challenge a President of their own party.

The internal conflict was on full display in the recently-completed legislative session as well. Thankfully, the most radical bill on energy which would have banned “fracking,” (an oil and gas drilling process without which New Mexico’s oil and gas industry would be immediately decimated) failed without gaining traction.

Making it much further in the process only to fail unexpectedly was Sen. Mimi Stewart’s “clean fuel standard” SB 11. In 2019 Gov. Lujan Grisham made national headlines stating that New Mexico was going to increase vehicle mileage in New Mexico to 52 MPG by model year 2022.

SB 11 would have instead forced motorists to use “alternative” fuels with the goal of reducing carbon emissions while passing off the hard work of actually developing the technology onto the private sector. Presumably blame for higher fuel costs would have been shifted as well. The bill faltered after passing the Senate.

Anti-energy bills that did make their way into law included SB 8 which allows local governments  to enact more restrictive air quality regulations than are imposed by the federal government. It is unlikely that conservative counties where much of the Industry is located (and people are far more supportive of the Industry than liberal Albuquerque or Santa Fe) will enact such regulations, but this is about politics, not policy.

Speaking of politics, SB 112 which also made its way into law creates a “sustainable economy task force.” The task force’s stated goal is “diversifying New Mexico’s economy while reducing reliance on traditional energy sources.” Of course, New Mexico Democrats have controlled the Legislature for decades and with total Democrat control under Lujan Grisham, they have had ample time to enact the public policies necessary to “diversify” New Mexico’s economy.

Unfortunately, Santa Fe has repeatedly failed to reform the gross receipts tax, eliminate Social Security taxes, reduce onerous regulations, and expand educational choice (to improve workforce preparedness). In recent legislative sessions we’ve instead seen tax hikes passed at times of big budget surpluses. During both the 2019 (HB 6) and 2021 (SB 317) sessions tax hikes were adopted. Such cash grabs do nothing to diversify New Mexico’s economy. At best they diversify government revenues. In addition to tax hikes, policies like minimum wage hikes, paid sick leave mandates, and ongoing COVID restrictions imposed by the Executive only hinder economic growth and diversification.

Finally, this session, while the Legislature continued its piecemeal attacks on energy, after a decade of attempts they passed an amendment to increase distributions from the Land Grand Permanent Fund (the fund is generated by oil and gas). HJR 1 not only increased distributions by 1% but added an additional .25% to that amount for a total increase of 1.25%.

Continued existence of the fund happens only if the oil and gas industry thrives, so Democrats’ plan to take more money out while less money is put in seem problematic at best.

Rather than killing off energy first, New Mexico’s elected leaders should focus on diversifying the economy. When we are no longer among the very poorest states in the nation the Legislature can address ways to make the New Mexico less dependent on oil and gas.

Paul Gessing is president of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility

 

 

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New Mexico session another missed opportunity

The following appeared in the Las Cruces Sun News on Sunday, March 28, 2021. UPDATE: Originally the article stated there was a production moratorium on federal lands. There is “only” a moratorium on new permits.

New Mexico is in one of the most unusual economic times in its history. Profound forces have impacted our State over the last year in unforeseen ways.

    • The Gov. and COVID shut down much of our State for much of the past year. COVID is declining, but New Mexico remains among the most locked-down states in the nation;
    • Oil and gas prices plummeted last April due to the pandemic and an international price war, but have come roaring back and produced $300 million in “new” money and a budget surplus;
    • Democrats in Washington recently passed a $1.9 trillion dollar “stimulus” that will dump an astounding $9 billion on New Mexico State and local governments. Meanwhile the Administration’s moratorium on oil and gas permits on federal lands will cost our State more than $700 million over the next few years according to Gov. Lujan Grisham;
    • While New Mexico governments are awash in money, businesses are struggling to recover. The State’s unemployment rate is 8.7 percent, 4th-worst in the nation.

To say we are living through unpredictable times would be an understatement. Oil and gas have always been volatile but are now more unpredictable than ever. This reflects broader economic uncertainty, but with the Biden Administration targeting the Industry, the Legislature must diversify our economy (this does not mean simply new sources of government revenue).

The unprecedented stream of federal spending flowing into our state is currently augmented by a flow of people. Housing markets are tight in most of our cities as Americans from big, expensive, states like California embrace remote work or simply move to states like New Mexico where they can spread out and buy a house for a lot less money.

Current trends are favorable, but long-term economic prosperity requires enacting policies that make the State more attractive as a business destination. The 2021 Legislature had a few successes but ultimately failed to enact policies that will bring long-term prosperity to New Mexico.

Despite a big budget surplus, the Legislature raised taxes on health insurance (SB 317). They imposed a new sick leave mandate on businesses, including small ones (HB 20). And, passage of HB 4, the misnamed “Civil Rights Act” will impose massive new legal costs on New Mexico governments without actually improving policing or protecting civil rights.

There were bright spots. HB 255 reformed New Mexico’s liquor licensing to make it easier for bars and restaurants long-term. HB 177 passed which allows New Mexicans to start micro-businesses by making non-perishable food items in their homes for sale.

But the gross receipts tax and its taxation of busines inputs and services remains a stumbling block for businesses. New Mexico also remains among a relatively small group of states that tax Social Security. No significant tax cuts or reforms were adopted. Also, no widespread reform of burdensome regulations (like the State’s “prevailing wage” law that artificially increases costs on public works) projects was enacted.

Some will argue that (after a decade of trying) tapping the Permanent fund to boost various education programs will help improve our workforce, but the track record of governments (including New Mexico’s) spending more money to boost education outcomes is spotty at best. Empowering parents and families with the resources needed to choose the educational option that is right for them (especially after a year of Zoom education), is more likely to succeed and at a fraction of the cost, but legislation to that effect was quickly defeated this session.

Microchip manufacturer Intel just announced that it is investing $20 billion in neighboring Arizona to build two new facilities. Such “economic diversification” is exactly what we need and what the Gov. and Legislature claim to want. Until the Legislature gets serious about reforming our economy we’ll continue riding the wave of luck, boom and bust in the oil patch, and Washington debt.

Paul Gessing is president of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility

 

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Video of discussion: Kevin Hassett and Paul Gessing Evaluate the Impact of President Biden’s Energy Policy

On Wednesday Feb. 24, the Paul Gessing of the Rio Grande Foundation and Kevin Hassett of the National Review Institute discussed the impact of the Biden Administration’s energy policies on New Mexico. You can watch the discussion which lasts about an hour below:

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RGF’s Gessing in National Review: Deb Haaland Could Be a Disaster at Interior

This week, President Biden’s nominee for secretary of the Interior, New Mexico congresswoman Deb Haaland, is up for confirmation in the Senate. Haaland, a self-described “progressive,” and a member of the Pueblo of Laguna, would, if confirmed, become the first Native American to head Interior. The Department manages approximately 500 million acres of surface land, or about one-fifth of the land in the United States.

The agency’s work is of interest to all Americans because it oversees more than 400 National Parks, from Yellowstone to White Sands. However, the department is of particular importance to Westerners, as more than 90 percent of the lands it manages are located in the Western United States.

The nomination of Haaland makes a certain amount of political sense for President Biden, allowing him to place a Native American in a position of leadership over Interior’s vast network of Native reservations. These reservations, including the Navajo Reservation in Northwest New Mexico, remain among the deepest pockets of poverty in the country. The fact that no Native American has ever managed those reservations is indeed worth remedying.

But Interior is a large department with many lands of varying purposes, and Western resource-intensive states including New Mexico have already seen the Biden administration act in ways that will do significant harm to their economies.

At Interior, Deb Haaland would be a cheerleader for Biden’s early anti-energy policies and would likely look for opportunities to expand upon them. She has taken radically anti-fossil-fuel positions throughout her political career. In 2016, prior to being elected to Congress, Haaland traveled to North Dakota to cook food for the protesters demonstrating against the Dakota Access Pipeline. She stayed in the camps for four days that September.

In May 2019, the newly minted congresswoman told The Guardian, “I am wholeheartedly against fracking and drilling on public land.”

Are Haaland’s positions and opinions based on sound science and history? In a 2019 Los Alamos Monitor story, Haaland claimed that “climate change in the U.S. started when Europeans arrived and started killing the buffalo.” Considering the numerous, dramatic changes that were a feature of the climate in prehistoric North America (and everywhere else on this planet), Haaland’s understanding of environmental forces is a bit off.

Given her radical views, it is not surprising that Haaland has been a strong supporter of the Green New Deal. The ambitious plan put forth by Represenative Alexandria Ocasio-Cortez (D., N.Y.) and others would cost trillions in subsidies and lost economic activity. Among the plan’s radical proposals is a mandated shift to 100 percent renewable electricity by 2030 and an increase in the top marginal tax rate to 70 percent.

On day one, the Biden administration pulled the permit for the Keystone XL pipeline. While this pipeline won’t directly affect energy-producing states, the cavalier approach to the permit raised red flags. Shortly thereafter, the Biden administration placed a moratorium on new oil and gas leases on federal lands. If confirmed, Haaland would be a staunch defender of such policies.

Haaland’s home state, New Mexico, is particularly impacted by what happens at Interior. The state has the third-highest Native American population in the U.S. and also happens to be the state most financially dependent on energy produced on federally managed lands within its borders.

According to the American Petroleum Institute, a ban on federal oil and gas leases could cost New Mexico 62,000 jobs, reduce state revenues by $1.1 billion, and reduce oil and gas production within the state by nearly 50 percent.

With Haaland’s nomination up this week and Biden already taking an aggressive anti-energy stance, it is ironic Haaland wasn’t Biden’s first choice for the job.

In fact, according to several New Mexico media outlets, Biden initially offered the position to New Mexico governor Michelle Lujan GrishamOn December 2, media outlets reported that Lujan Grisham had been offered the top job at Interior but turned it down. Lujan Grisham has never stated publicly why she refused the job, although she is just halfway through her first term in a “blue” New Mexico where she likely expects to be reelected in 2022.

As has been the case since the early days of Biden’s run for the White House, identity politics loom large for him. The president seemingly had the Interior secretary set aside to be filled by a Western, female, minority Democrat. A few weeks after Lujan Grisham turned him down, Biden settled on Haaland for the post.

The case for the slot at Interior being based purely on demography is buttressed by the fact that Lujan Grisham and Haaland have very different views regarding federal-land management. While both are New Mexican females (one Hispanic and one Native American), they exemplify opposite wings of the Democratic Party on energy.

From 2013 to 2019, Lujan Grisham represented the same Albuquerque-area congressional district as Haaland does now (Haaland will relinquish the seat if confirmed), and took a practical, moderate view on energy. This moderation is notably reflected in her 2015 vote to repeal the ban on crude-oil exports. She was one of just 26 Democrats in the House voting to repeal, with 153 of them voting to keep the ban in place.

Lujan Grisham continued to express moderation on energy issues when she moved into New Mexico’s Governor’s Mansion in 2019. During her time in office, she has expressed strong support for the state’s oil and gas industry and even said she’d consider asking for a waiver in case of a federal leasing ban.

As a governor concerned about her state’s economic and financial interests (and one who enjoys having oil and gas generate anywhere from 30 to 40 percent of her state’s budget), Lujan Grisham has attempted to placate environmentalists in her political base without doing serious harm to the state’s most important industry. Based on President Biden’s early energy policies, Haaland seems to make a better fit for the administration.

Senator Steve Daines (R., Mont.) has announced his opposition to Haaland’s nomination. Montana’s junior senator signaled he would not only vote against her confirmation, but also attempt to block her nomination from advancing.

“I’m deeply concerned with the Congresswoman’s support on several radical issues that will hurt Montana, our way of life, our jobs and rural America, including her support for the Green New Deal and President Biden’s oil and gas moratorium, as well as her opposition to the Keystone XL pipeline,” Daines said in a statement. Is that enough to stop Haaland from taking her radical policies to Department of the Interior? We should all hope so.

 

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Hurting the Economy without Helping the Climate? We’ve Got this Inside-Out

In the last month, New Mexico and the United States as a whole have witnessed unprecedented attacks on the traditional energy sector. Nationally, President Biden’s ban — for now, just described as a pause — on new oil and gas leases on federal lands has been well documented. So too has his revoking of the permit for the Keystone XL pipeline.

While such decisions are undoubtedly popular with radical environmentalists and their well-funded allies, it is hard to see how they — or anyone likely to follow them — will achieve the reductions in CO2 emissions necessary to make any difference to the climate. Look, for example, at the impact of the Keystone XL pipeline decision. With no available pipeline, Canada and its oil producers will simply load their oil onto trains or trucks, relying instead on modes of transport that are more risky and less energy-efficient. Indeed, doing so will involve higher greenhouse-gas emissions than the pipeline would have, especially considering the pipeline developers’ recent promise to use only renewableenergy to operate the project.

Overall, less than 10 percent of American oil and gas comes from federal lands. Cutting production from them won’t have a real impact on producers on private and state lands, nor will it reduce demand for foreign oil. Nevertheless, this new policy could end up inflicting significant economic pain on an already shaky U.S. economy.

Even if a relatively small amount of U.S. oil and gas production comes from federal lands, bans or restrictions there will have a disproportionate effect on a good number of states and their economies (like my own in New Mexico). Half of New Mexico’s oil and gas production — much of it fracked — is on federal land. Long-term curtailment of oil and gas drilling on federal lands would devastate the state’s budget.

Not to be outdone by the Biden administration, the Democrat-dominated legislature here in “deep blue” New Mexico is considering a number of proposals of their own. (Mind you, the state is one of the poorest in the Union and, thanks to fracking, is the country’s third-largest oil producer.) Chief among them is legislation that would require all new construction (homes and schools) in New Mexico to incorporate solar panels and mandate that 75 percent of all state-government vehicles be electric-only. Another bill would require dramatic reductions in “carbon intensity” for vehicles purchased by everyday New Mexicans. The technology to reduce carbon-intensity of New Mexico vehicles is left unsaid because the regulation would oblige fuel producers to work this out for themselves.

Writing for the Albuquerque Journal, two Democratic state legislators explained the proposals:

By requiring fuel providers that refine, blend, make or import fuel used in New Mexico to gradually reduce the carbon intensity of the transportation fuel itself, we can reduce emissions by 4.7 million metric tons in carbon dioxide equivalent by 2040. That’s like taking 44,000 cars off the road every year for 15 years. A clean fuel standard would not apply to retail gas stations or cause cost increases at the pump.

Yet, the heavy-handed, economy-killing efforts in New Mexico and in various state capitals across the country will do little to rein in global CO2 emissions. In fact, CO2 emissions are already being curbed in the United States through a combination of market forces and government policies. The real problem is that emissions are exploding elsewhere, most notably in China.

In late 2020, Forbes noted that U.S. CO2 emissions already comply with the Paris agreement. Goosed by an 11 percent drop in CO2 emissions in 2020 due to COVID-19–induced travel reductions, the United States has seen emissions drop since the mid 1980s. Nowadays, despite a population that is 40 percent larger than it was in the mid 1980s, U.S. CO2emissions are approximately the same as they were back then. This is a remarkable feat.

Indeed, the combination of a long-term shift in electricity generation from coal to natural gas (in no small part thanks to fracking), along with the energy efficiency generated both by market competition and regulatory pressure, fuel-mileage mandates, and the Clean Air Act, have made the United States a more CO2-efficient national economy.

China, on the other hand, is not just rapidly increasing CO2 emissions, it is massively expanding coal-fired electricity production. According to Voice of America, “China put 38.4 gigawatts (GW) of new coal-fired power capacity into operation in 2020, more than three times the amount built elsewhere around the world and potentially undermining its short-term climate goals.”

Furthermore, according to research released on Wednesday by Global Energy Monitor, China’s coal-fired fleet capacity rose by a net 29.8 GW in 2020 (including decommissions), even as the rest of the world made cuts of 17.2 GW.

China, which still has millions of citizens living in real poverty, certainly has a right to develop its economy. But if the Biden administration is serious about addressing climate change, it ought to use the bully pulpit to cajole China to move toward lower CO2 intensity. After all, China is already the global “leader,” with CO2 emissions approximately doubling those of the United States. Those emissions rose even during the pandemic year of 2020.

Even if the Biden administration and states such as New Mexico make a concerted and focused effort to reduce CO2emissions (an open question to say the least), the United States won’t be able to halt climate change. Any CO2reduction we make is only displaced by a doubling from China, who seems more serious about developing its own economy than the Biden administration and many “blue” states like New Mexico are about theirs.

President Joe Biden and New Mexico governor Michelle Lujan Grisham telling us to pay more for energy while destroying thousands of energy jobs is a hard pill to swallow even if we were to make serious progress toward achieving our climate goals. But to do immense damage to the U.S. and New Mexico economies while allowing American progress on CO2 emissions to be undermined by our economic and geopolitical rivals in China is woefully misbegotten.

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