Proving, once again, that there’s no tax on the books that New Mexico’s “progressives” don’t want to hike, the Santa Fe New Mexican recently reported that several “candidates for commissioner of public lands argue the state is not getting a big enough cut from the natural resources behind a renewed boom in southeastern New Mexico.”
Stephanie Garcia Richard, George Muñoz, and Garrett VeneKlasen, all Democrats, want higher royalty rates for production from state-trust land. “I do not believe for 100 years the industry has paid its fair share to New Mexico,” Garcia Richard sniffed.
If New Mexico were one of only a handful of places to produce petroleum on Planet Earth, perhaps tax hikes wouldn’t have any consequences. But with state-of-the-art tech, including fracking and deepwater drilling, crude can be tapped in a vast number of locales. And taxes, as well as regulation, impact where drillers do business.
The Canada-based Fraser Institute‘s latest “survey of petroleum industry executives and managers regarding barriers to investment in oil and gas exploration and production facilities in various jurisdictions around the globe” found that the Land of Enchantment is no star.
Among jurisdictions with “modest reserves,” New Mexico ranked 12th, with a “Policy Perception Index Score” of 75.54. That was well behind Oklahoma (94.14), North Dakota (91.53), and Wyoming (85.79). But hey — the Land of Enchantment beat Vietnam, Mexico, and Uganda.
Right next door, Texas, a “large reserve holder,” notched a perfect index score of 100.00.
The oil-and-gas sector produces nearly a third of the state’s indigenously raised revenue. And the industry’s decision-makers closely monitor proposed policy shifts. It’s safe to assume that they saw the article in the New Mexican, and didn’t like what they read.