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Op-ed: Clean Car Rule is Lujan Grisham’s latest policy imposition

Gov. Lujan Grisham recently continued her attempt to simultaneously keep the oil and gas revenue spigot flowing while enacting enough policies from the radical environmental agenda to placate her political and fundraising base.

Her latest plan, known as the Clean Car Rule, was adopted by her handpicked Environmental Improvement Board (EIB). Governor-appointed boards are far more willing to do what they are told than are unruly and sometimes uncooperative (albeit overwhelmingly Democrat) legislative bodies with their own political calculations and aspirations.

Incredibly, New Mexico’s newly Clean Car Rule undermines democracy and self-government (along with our economy) by placing New Mexico automobile regulations under the control of another state, California. The current rules are California’s and if California changes them, New Mexico will have to go along with them or reverse course and opt out.

New Mexico’s new automobile standards will require roughly 7% of new cars sold in the State to be zero emission in 2025. In the latest report available (3rd quarter of 2021) zero emission vehicles amounted to just 2.29% of new vehicle sales in New Mexico. So, to comply with the new rule, sales of zero emission vehicles will need to just more than triple from Q3 of 2021 to 2025.

But the real kicker is by subjecting itself to California’s political whims New Mexico could be forced to adopt even more aggressive “Clean Car” standards soon. California Gov. Gavin Newsom has issued an  executive order that, if adopted, would end the sale of gas-powered cars in California by 2035. Final adoption of that rule could come in California as early as this August.

If California enacts this rule, 35% of new cars, SUVs and small pickups sold in California (and thus New Mexico) must be zero-emission starting with 2026 models. That number will increase yearly, reaching 51% of all new car sales in 2028, 68% in 2030 and 100% in 2035.

“Just” tripling sales of electric vehicles (EV’s) in two years in New Mexico means dealerships will cross-subsidize EV’s by raising prices on gasoline vehicles or they will look to the State to further subsidize sales of “chosen” vehicles. This could make gasoline vehicles purchased in New Mexico more expensive leading to purchases made at out-of-state car dealers. That would result in lost jobs and tax revenues in New Mexico. That situation will get much worse if California (and New Mexico) adopt the even more aggressive rules being considered.

Current tax credits and subsidies include a $7,500 federal tax credit and various credits for upgrading connectivity to the electrical grid further help with deployment of electric vehicles. Of course, those credits and subsidies are paid for by increasing costs on taxpayers and utility rate payers.

Deployment of EV charging stations will be another expense associated with this plan. A recent report found New Mexico to have just 401 public charging stations statewide. And those need to be maintained. A recent report from EV-friendly San Francisco found that 27 percent of the Bay-areas charging stations were not functional.

All of this comes at a time when New Mexico’s largest utility (PNM) is keeping its coal fired power plant open just to keep the lights on and says it won’t have half the solar/battery replacement power needed to keep the lights on during the summer of 2023.

There are so many problems and costs with a drastic shift toward electric vehicles that at the very least New Mexico’s elected Legislature should have had a say, but instead we have a Governor in a tight reelection battle who wants to make big promises to environmental groups and their funders no matter how disruptive or damaging to New Mexicans and their livelihoods.

The fact is that the real costs of these unrealistic and damaging policies will be borne after this election. Sadly, that is all by design.

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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Rio Grande Foundation in National Review’s Capital Matters: “Where’s Deb Haaland”

Any car-owning American who has taken a recent trip to the pump will be able to tell you one thing: Gas is expensive. Really expensive. Indeed, as of last week, a gallon costs $4.231 — up $1.379, from a year ago. (The same trend is true for natural gas.) The crisis has evidently lasted longer — and proved more economically serious — than the Biden administration suggested.

Curiously, the cabinet official best equipped to address it has remained completely mum on the issue. I’m referring to former New Mexico political activist, former member of the U.S. House of Representatives, and current secretary of the Department of the Interior, Deb Haaland.

Secretary Deb Haaland manages the federal government’s onshore subsurface mineral estate — about 700 million acres (30 percent of the United States) held by the Bureau of Land Management alone. There are, of course, additional oil and gas resources to be found on tribal lands, in the Alaska National Wildlife Refuge, and on the outer continental shelf.

According to the website operated by the Department of the Interior’s Bureau of Land Management, in fiscal year 2018 (which is unfortunately the most recent data available), sales of oil, natural gas, and natural-gas liquids produced from the federal and tribal mineral estate accounted for only a small fraction of total sales in the U.S. (8 percent of all oil, 9 percent of all natural gas, and 6 percent of all natural-gas liquids).

These numbers could be much higher. In the best of times, the federal government might be a more difficult partner for oil and gas companies than private landowners or even state land offices that have a much stronger financial incentive to approve permits than does Washington. Now, with the avowedly anti-fossil-fuels Biden administration and anti-oil-and-gas activist Deb Haaland in control of the Interior Department, the permitting situation is much worse.

And that’s the point of this critique. If the Biden administration really wanted to address rising gas prices, it could do so most readily by encouraging drilling on federal lands — especially on onshore resources in Deb Haaland’s home state of New Mexico.

Yet rather than pursuing that fairly simple solution, the administration would rather plead with such hostile nations as Venezuela and Iran to expand their production.

Whether it is Deb Haaland calling the shots within the administration on energy policy or whether she is just one of many decision-makers, the Biden administration’s embrace of anti-energy environmental groups and their policies appears to be the root cause. Not surprisingly, Haaland herself rose to some level of prominence by opposing traditional energy, calling for a fracking ban, and promoting the Green New Deal. “I am wholeheartedly against fracking and drilling on public lands,” Haaland said in an interview with the Guardian in May 2019.

Haaland is unlikely to moderate her views, even as skyrocketing energy prices have become a major problem. Instead, she avoids dealing with the issue entirely. Consider just a few examples:

  • The Interior Department and its associated agencies have not issued a single press release on the energy-crisis situation, much less about increasing production on federal lands.
  • There have been no tweets from Secretary Haaland on the issue of increasing energy production on federal lands.
  • When the secretary does focus on energy issues, as she did in a visit to Ohio, the focus is on infrastructure — cleaning up orphan wells, legacy pollution from extractive industries, and moving toward renewables.
  • Oddly, even Haaland’s calendar hasn’t been updated in nearly a year (since March 2021).

While the Interior Department and Deb Haaland have been completely missing in action during the ongoing energy crisis, Energy secretary Jennifer Granholm is at least publicly calling for ramping up production. Previously the White House was “quietly” calling for more production, but you can look far and wide for specific Biden-administration policies to increase supply. The best you’ll get is the recently announced release from the Strategic Petroleum Reserve.

Unfortunately for hard-pressed motorists and, more generally, American consumers being throttled by high inflation, the Department of Energy can’t really do anything directly to address America’s energy crisis. The department that can, though, is nowhere to be seen. Perhaps the administration simply doesn’t want Haaland front and center because she has such a long track record of opposing the very energy resources necessary to solve the current crisis.

Will Haaland come out of “hiding” to lead the charge on behalf of increasing American supplies of oil and gas? I’m not holding my breath. This administration remains more beholden to radical environmental groups than any in history. Prices may come down a bit if the war in Ukraine ends, but high gas prices and constrained American production are a feature, not a bug, for the Biden administration and its interior secretary.

Paul Gessing is president of New Mexico’s Rio Grande Foundation.

 

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NM leaders must balance reality with green’ aspirations

The following opinion piece recently appeared in several New Mexico media outlets including the Eastern New Mexico News.

There are many things that make New Mexico unique, but one of the most noteworthy political nuances is the State’s deep and unusual relationship with energy. New Mexico’s Democratic politicians love the money and jobs generated by the traditional energy industry, but also wish to be seen as pushing back against it to placate their environmentalist base.

Nonetheless, New Mexico, a state blessed with all sorts of energy resources (both traditional as well as wind and solar) has continued to embrace Democrat politicians despite the Party’s leftward shift on energy in recent years. With oil prices skyrocketing and electricity reliability in question, it is time for voters to demand sensible energy policies from politicians.

The Russian invasion of Ukraine caused gasoline prices to jump dramatically after having risen throughout Joe Biden’s time in the White House (due in part to his anti-energy policies and rhetoric). And, while there are limited things to be done in the short term, in the intermediate and longer term, former New Mexican and Secretary of the Interior Deb Haaland should be a pivotal figure in addressing America’s energy issues. Instead, she is nowhere to be found.

Haaland manages the sprawling federal estate including the Bureau of Land Management. Immediately upon taking office the Biden Administration instituted a permitting moratorium on federal lands. Rather than changing directions and opening the leasing process as prices rose, under Haaland’s direction, new oil and gas lease auctions have remained on hold.

Expediting new drilling on federal lands is just one of many ways Haaland could get serious about reducing gas prices (and at least partially defanging Russia which relies heavily on oil and gas exports to Europe) but remains silent on the issue, even on her official Twitter account.

Speaking of natural gas which often takes a back seat to oil in New Mexicans’ minds, New Mexico leaders could and should be advocating for natural gas as a cleaner energy solution relative to coal and others. New Mexico is one of the leading natural gas producing states in the nation.

Thanks to a fracking-driven production boom, natural gas has been used to replace coal in electricity generation. This has been one of the primary tools in reducing US CO2 emissions in recent years, a fact recognized by former President Barack Obama. Furthermore, exports of US-produced liquefied natural gas (LNG) have created home-grown American jobs, narrowed the trade deficit, and helped foreign countries like China reduce their CO2 emissions.

Russia’s invasion of Ukraine provides the United States (and by extension New Mexico) an ideal opportunity to expand production of natural gas. Unfortunately, our State’s senior Senator Martin Heinrich remains obsessed with eliminating natural gas in favor of “electrification.”

Rather than focusing on alleviating the pain of high energy costs (driven both by the Russian invasion and Biden Administration policies) Heinrich is pushing to replace natural gas in home heating and cooking. He remains uninterested in transitioning Western Europe away from Russian energy to New Mexico-produced natural gas.

Electrification is a fool’s errand. According to new Department of Energy data, electricity costs $41.79 per million BTU’s. Natural gas costs $12.09 per million BTU’s. And that’s in today’s numbers. Electrification would increase US electricity consumption by 40 percent. Public Service Company of New Mexico was concerned about blackouts and brownouts this summer due to the shuttering of one coal fired power plant. A 40% increase in electricity consumption over current levels will increase prices well above today’s levels.

A greener and more affordable future can be had, and New Mexico can lead the way. With abundant nuclear resources, natural gas, and renewable power, New Mexico has a lot to offer the nation and the world. But first, our leaders including, but by no means limited to Secretary Haaland and Heinrich need to get serious about balancing economic and technological reality with their “green” aspirations.

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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2022 Freedom Index Results Published

The Rio Grande Foundation uses its “Freedom Index” vote tracking site to  hold New Mexico legislators accountable for their stances on individual freedom and personal liberty. We have rated all bills that impact individual freedom that received floor votes for the 2022 session and thus the current Index results are “final.”

Every bill receiving a score is rated on a scale from -8 through +8 depending on its overall impact on YOUR personal freedom. In the 2022 session the most impactful vote (-8) was on SB 14, the Clean Fuel Standard. A full analysis of that bill can be found here.

The BEST bill voted on this session was HB 163, that is the bill which includes several tax cuts (RGF analysis of that bill here). It received a +4 rating in the Index.

Rep. Stefani Lord (R) who represents parts of the East Mountains of Albuquerque scored a 45 which was the highest rating of the session.

Rep. Randall Pettigrew (R) who represents Lea County scored a 43 which was good for the 2nd-highest rating of the session.

Sen. Craig Brandt (R) who represents Rio Rancho scored 33 which was the highest rating for any senator (the Senate and House vote on different bills and the House typically takes more votes and thus has higher and lower scores).

Sen. Antoinette Sedillo-Lopez (D) who represents parts of Albuquerque scored -66 which was the lowest rating for any member of the Legislature.

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Best bills of New Mexico Legislature…so far

Despite there being A LOT of bad bills in the 2022 session even with only 30 days to consider them, there ARE some good bills. Here are some of the BEST bills introduced so far. We’ll also “handicap” the likelihood that each bill will pass:

HB 40/HJR 3: Reps. Greg Nibert (R), Daymon Ely (D), Randall T. Pettigrew (R), Stefani Lord (R), and Rachel A. Black (R). This bill/amendment would place limits on the Governor (whoever that may be) and give the Legislature a “seat at the table” in future emergencies. Unfortunately, while similar bills were introduced in the 2021 session which lasted 60 days and a recent special session, this worthwhile bill which has bipartisan sponsorship has a LOW chance of passage.

HB 48/HB 49/SB 108 These bills introduced by Reps. Gail Armstrong (R), Cathrynn N. Brown (R), Randall T. Pettigrew (R) , Candie G. Sweetser (D), Rebecca Dow (R), and Sen. Padilla (D) would end taxation of Social Security under New Mexico’s personal income tax. This issue has been around for a few years, but Gov. Lujan Grisham has said that she supports eliminating the tax. We don’t know EXACTLY what she means (like if she’ll raise other taxes to do it), but these bills DO NOT offset the tax with new taxes. MODERATE chance of passage.

HB 76/SB 85  Reps. Phelps Anderson (I),  Harry Garcia (D)
T. Ryan Lane (R), Joy Garratt (D), Jane E. Powdrell-Culbert (R), and Sen. Harold Pope (D) would give a $30,000 exemption for military pensions. This bill is a worthy follow-up to the Social Security discussion, especially with New Mexico’s large number of ex-military. But, it is unlikely to happen this year. 

HB 91: Reps. Rebecca Dow (R),  Luis M. Terrazas (R),  James G. Townsend (R),  Candy Spence Ezzell, (R), and  Randall T. Pettigrew would prohibit the teaching of Critical Race Theory in New Mexico schools. It is unlikely to pass this year.

HJR 11: Reps. James G. Townsend (R), Ryan Lane (R), Larry Scott (R), Rod Montoya, (R), and Stefani Lord (R) would amend New Mexico’s constitution to specifically allow school funding to flow to families to choose the education option that makes sense for them which may include private schools or home school. Zero Chance of Passage until the unions no longer control New Mexico’s Legislature and Gov.

SB 5: Sen. Bobby Gonzalez (D), reduces the Gross Receipts Tax rate imposed by the State of New Mexico from 5.125% to 4.875 percent. This WAS a top priority of the Gov. prior to the session, but when she asked the Legislature to eliminate the Social Security tax in her State of the State address she seemed to shift emphasis away from reducing GRT rates. We still believe this has a High Chance of Passage.

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Here are some early contenders for worst bills of the 2022 Legislature

As of the day before the 2022 Legislature kicks off, here are some of the worst bills introduced in the session (so far). You can see the updated list of bills introduced in the session here as of January 17, 2022. More will be added. Given the large number of bills likely to be introduced, I’ll also offer a brief thought on how likely they are to pass:

HB 6, Reps. Nathan Small (D) Brian Egolf (D), Kristina Ortez (D), Sens. Siah Correa Hemphill (D), Mimi Stewart (D). Sets legislative framework for “net-zero” CO2 emissions in State of New Mexico. Likelihood of passage: High as Gov. MLG has said she wants to make New Mexico “net-zero.”

HB 11, Reps. Debra Sariñana (D) and Meredith Dixon (D). Creates a tax credit of up to $5,000 and 40% of the cost of “energy storage” systems. Likelihood of passage: High This yet another part of the push toward unreliable forms of electricity that will demand massive and costly battery storage.

HB 14, Reps. Christine Chandler (D) and Debra M. Sariñana (D). Allows local governments to issue Industrial Revenue Bonds (IRB) and gross receipts tax deductions for “energy storage” systems. Likelihood of passage: High(see above).

HB 33, Rep. Joanne Ferrary (D). Imposes massive (regressive) tax hike on tobacco consumers at a time of massive budget surpluses. Likelihood of passage: Moderate (it will hard for legislators to explain a tax hike at a time of record budget surpluses).

HB 34, Rep. Joanne Ferrary (D). Expands and extends an already-generous solar panel tax credit that disproportionately benefits wealthy New Mexicans. Likelihood of passage: High (furthers “green” agenda and benefits well-connected, wealthy solar customers and companies).

HB 71, Rep. Matthew McQueen (D) and Jason C. Harper (R). Allows taxes on residential property to rise by up to 10% ANNUALLY (as opposed to 3% currently). Likelihood of passage: Moderate (Property taxes are notoriously unpopular and it is hard to see the Legislature passing a big tax hike in an election year, even with a GOP co-sponsor).

HB 75, Rep. Sponsor Patricia Roybal Caballero (D). Sets up a state-run bank in New Mexico. New Mexico already has a robust network of banks and credit unions, the last thing it needs is a government-run and taxpayer-financed bank. Likelihood of passage: Moderate this is a concept likely to be seen as too far beyond the pale even for many Democrats.

HB 78 and HB 132 Rep. Patricial Roybal Caballero (D) is on HB 78 while HB 132 is more likely to pass and sponsored by Rep. Susan K. Herrera, Speaker Brian Egolf, Reps. Joy Garratt (D), Phelps Anderson (I) and Daymon Ely (D). Both bills create artificial limits on interest rates charged by certain lenders in New Mexico that will limit credit availability to those with poor or no credit. Likelihood of passage: High (HB 132) as this concept has numerous groups supporting and high-interest loans are misunderstood and by legislators, the media, and the population at large.

HB 126, Reps. Tara L. Lujan (D) and Pamelya Herndon (D), Creates all manner of “diversity” requirements for state government employees, creates a “Chief Diversity Officer” as well as “diversity” and “inclusion” liaisons in State government, requires an annual report on whether the State is achieving its diversity and inclusion goals. Is New Mexico State government not “woke” enough? This legislation is for you. Likelihood of passage: Moderate.

HJR 2 / SJR2 Reps. Joanne J. Ferrary (D), Tara L. Lujan (D), Gail Chasey (D), Sens. Antoinette Sedillo Lopez, (D), Harold Pope (D). Purports to provide the people of New Mexico with vaguely-defined “environmental rights” includng the right to a “clean and healthy environment and the “right to protction of the environment.” The vague provisions contained in this amendment will simply result in more expensive lawsuits and unnecessary regulations. This is a Constitutional amendment and extremely vaguely worded which might scare away supporters.  Likelihood of passage: Moderate.

SB 8, Sens. Peter Wirth (D),   Katy M. Duhigg (D), Harold Pope (D) Carrie Hamblen (D), and  Rep. Javier Martínez (D) would “reform” voting in New Mexico by allowing 16 and 17 year olds to vote, creating a permanent absentee voter list, and permitting people without an official state ID to register to vote online by using their full Social Security number. Likelihood of passage: High

SB 21, Sen. Bill Tallman (D), Provides a tax subsidy for electric vehicles which tend to be driven by wealthy New Mexicans and is thus “regressive.” If there is one policy area where New Mexico’s Legislature loves to pour subsidies it would be for supposed “green” initiatives. Likelihood of passage: High

SB 99, Sen. Leo Jaramillo (D), Creates a new “State Transit Fund” to further funnel money from state taxpayers to failed transit projects. This is a new idea this session, but with so much money floating around there is always reason to be concerned about new wasteful spending. Likelihood of passage: Moderate

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Santa Fe New Mexican op-ed: An energy crisis looms in New Mexico

The following appeared in the Santa Fe New Mexican on October 24, 2021.

Western Europe is facing an energy crisis this winter. Prices have skyrocketed. Natural gas is 400 percent higher than the start of 2021 while coal is up over 300 percent.

As if high prices weren’t enough of a problem, 40 percent of the natural gas that Europe uses comes from Vladamir Putin’s Russia, an unreliable supplier to say the least.

New Mexicans should take heed. Thankfully, despite the Biden Administration’s permitting ban on federal lands (since invalidated by a judge), New Mexico has steady supplies of oil and natural gas.

Those supplies help protect us from wild price swings and supply disruptions like those that could cause massive economic pain and human suffering in Europe this winter.

While we’ll be fine this winter, New Mexico’s largest utility is facing serious challenges finding enough electricity by next summer.

Due to the Energy Transition Act of 2019 which forms the cornerstone of Gov. Michelle Lujan Grisham’s “Green New Deal” agenda, the San Juan Generating Station is slated to be permanently shut down next June during the hottest part of next summer.

PNM executives have stated clearly that the hunt for “renewable” power to replace San Juan Generating Station is not going well. Even in the best of circumstances “renewables” like solar and wind are inconsistent and require backup like batteries, but the pandemic has hit supply chains hard and projects are being delayed.

Unless Gov. Lujan Grisham acts quickly to keep San Juan Generating Station open, the plant will be taken offline as scheduled this summer and blackouts and brownouts could be the result. If you don’t believe me, Tom Fallgren, PNM’s vice president of generation told the Public Regulation Commission recently, in discussing the possibility of brownouts and blackouts said, “Am I concerned? Yes. Do I lose sleep over it? Yes. Can we solve it? Yes.”

He further noted that PNM practices for scenarios, such as brownouts, have detailed procedures to handle them and prioritize power for places such as hospitals.

Finally, Fallgren noted, “We are looking at any and all options. … And we continue to beat the bushes, so to say, for other opportunities as well.” Are you feeling reassured? I’m not. Interestingly enough, PNM continues to reject new natural gas-powered resources in New Mexico as replacement supply.

Even if we escape serious power outages this summer, the issue is not going away. In fact, it will only get worse. In 2023 and 2024, PNM is abandoning its leases for power from Palo Verde (a nuclear power plant in Arizona), and by the end of 2024, PNM will no longer receive power from the Four Corners plant, yet another coal-fired plant here in New Mexico.

Ironically, as has been discussed in PRC hearings, the Navajo Tribe wants to take over Four Corners plant (saving jobs and tax revenues) while environmentalists are pushing hard to shut it down completely. Regardless of what happens next summer or over the next few years, these are policy-driven decisions made by Lujan Grisham and Democrats in the Legislature. They could have massive implications for New Mexico families.

Already, with the price of everything already going up, New Mexicans’ electric bills rose 5 percent just last year. Those rate hikes will continue to escalate for years into the future regardless of whether PNM or Avangrid is in charge. Wasn’t the Energy Transition Act supposed to hold the line on price increases?

New Mexicans and their elected officials must be aware of the very real problems facing them as June of 2022 approaches. It is not too late to prevent this crisis.

Paul Gessing is president of New Mexico’s Rio Grande Foundation, a tax-exempt organization dedicated to promoting prosperity and individual responsibility.

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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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Economy Energy and Environment Legislature Notable News Oil & Gas Top Issues

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