Our blogging of the historic oil reserves discovered in the SE corner of the state and the $1.1 billion state budget surplus already generated by the oil boom there drew an unusually large amount of e-mail.

For a minute we thought we were being spammed by the Sierra Club since so many of the writers damned the oil discovery and the oil surplus because of the climate risk of fossil fuels. So in contrast to what one reader dubbed our "giddiness" over the oil discovery and the state surpluses being generated, we proceed to Reader Vox Populi

Reader Greg Smith writes:

Joe, Take a deep breath. Think about the Permian basin discovery in the context of climate change. Sadly, NM needs the cash now. It would be foolish to cut back our state's oil production today and let other producers make up the difference while global demand stays so high. That would simply shift money without helping the climate. However, the world needs to leave roughly 80% of proven oil and gas reserves in the ground. The time is fast approaching when the world must agree to act accordingly. So let's not count on perpetually pumping Permian. Let's plan on being ready to cooperate with the rest of the world, starting on a time scale measured in years--not decades--and then ramping it down to zero

Reader Alan Schwartz says:

Joe, When I moved here 22 years ago a different group of "experts" told us that the Albuquerque aquifer was the size of Lake Michigan. I guess we just have to hope that this latest group of experts has done a better job.

Reader "Crockagator" writes:

Hey, Joe. If we are on the road to many, many dollars from the oil discovery who needs a top bond rating? We just need to pay for everything with cash plus pre-pay all outstanding bond debt. The Crockagator. 

Actually, Crockagator, the state House Speaker is now suggesting that many upcoming construction projects be paid for with the cash surplus--not bonds.

Reader Bruce Shah writes:

I guess for me the irritation is that not one of the policy players in the oil boom added a climate caution. I agree completely with your comment about our state's critical needs. But we have an $18-billion reserve in the form of the Land Grant Permanent Fund. A tiny portion of that could do the trick--at the same time we slowed the drilling. 

Any bets on Senate Finance Committee Chairman John Arthur Smith hiding behind the Permian estimates and again stonewalling dipping into the reserves? Not sure I am accurate but we are last--or second to last--in every social index and first, second or third in reserves.

Well, Bruce, you didn't have to wait long. The top legislators dealing with finance are all putting up warning flags about spending the surplus on other than one time expenses and most of them also continue to oppose using a small portion of the Permanent Fund for early childhood education. It's not easy getting rid of a poverty mentality, even as the riches pile up in front of them.

ANONYMOUS BUT QUOTABLE

An anonymous reader from ABQ writes:

I am in complete agreement with you and your “no bullshit economists” about the need to invest in people to improve our state’s economy. However. I despair at the lack of discussion about the conflict between the source of the surplus and the need to reduce emissions of greenhouse gases, and the lack of discussion about targeting a significant part of the investment in people toward reducing emissions and our state’s dependence on them. While doing the basic reinvestment so desperately needed in our schools and our support services for children, we also should be looking at things like:

--Tax credits for investment in renewable energy and in improving the energy efficiency of both public and private buildings;

--Replacing transportation vehicles with others that reduce fossil fuel consumption 

--Economic development that does not rely on producing or using fossil fuels;
making our state more resilient in anticipation of continued climate change (reduced snowpack and precipitation, increased risk of drought/heat waves/fires).

Yes, New Mexico is an economically poor state, and we need to take advantage of the economic opportunity that has landed in our lap. And the oil and gas is likely to get extracted and used no matter what our state does alone. But we need to bear in mind that this is all being done on the back of our climate and the long-term health of the natural systems we depend on (and that make New Mexico the place so many of us love).

Good stuff, Mr. Anonymous. Why didn't we write that?

BOOM AND BUSTS

Longtime reader Norm Gagne writes:

The discovery of huge oil and gas reserves in the Permian Basin has many counting and planning the spending of enhanced state revenues far into the future. While we surely could use a financial boost for a cash starved state budget today and tomorrow, the collective huzzahs overlook sobering facts. As surely as dawn follows the dark, oil busts follow oil booms. While increased U.S. production has decreased the impact of unscrupulous and less politically stable suppliers, worldwide supply of oil still depends too much on the likes of Russia, Venezuela and the Middle Eastern countries. 

The increasingly dire reports of climate scientists highlight the urgency of moving away from carbon fuel energy sources. The lessons, it would seem, are to spend the new money wisely, to meet vast unmet needs to be sure, but with a significant chunk devoted to developing a non-carbon based future economy for New Mexico.

Larry Gioannini writes:

I'm dismayed and disappointed by your giddiness over the Permian Basin oil boom. Either of the two most likely outcomes of this are disastrous. If the rest of the world acts quickly and responsibly with regard to Climate Change New Mexico will be among those possessing the largest stranded asset of all time. If we don't act quickly enough to limit the damage from Climate Change, New Mexico will contribute significantly to the ever accelerating and underestimated climate disasters bring misery to billions of people. Really not a time for Champagne and cigars.

Thanks, Larry. But we remain giddy (and unapologetic) about the good that extra money could do in making New Mexico a better place in which to live. We're with you on climate change but the youth of today who are being shortchanged certainly qualify as a stranded asset. As for champagne and cigars, is there ever a bad time for them?

Paul Sandman writes:

Joe, With all the talk about oil and gas, what about the conversation in Poland about getting rid of all fossil fuel use? The protests outside the House Minority Leader's office by fellow Dem’s shows their determination.

SAVE IT ALL

Kevin Garcia writes:

Joe, in regards to the projected budget surplus of $1.1 billion, you sure sound like many of the politician's in the past who have argued for over fifty years to spend the corpus of the Permanent Funds on recurring outlays! Since these revenues are from a Extractive and Depleting revenue source, we would be prudent to spend funds on education and other critical programs, but we should also continue to work to build the corpus of these Permanent Funds for future generations! What would be so wrong in building these funds up to $50 or $100 billion over time before the oil runs out and thus thereby securing a permanent source of investment revenues for future generations of New Mexicans? Given a projected earnings rate of 7% a permanent recurring revenue source of $3.5 to $7 billion for programs could be our legacy for the education of future generations of New Mexicans! 

The state's two large permanent funds now hold $24 billion.

NOT PERSONAL, JOE 

Cheryl Haaker writes:

"Massive and historic reserves of oil and natural gas." The need and the greed preclude New Mexico and Texas from doing the right thing, which is leaving the stuff in the ground. It's actually shocking that these discussions centering around money will totally avoid the global warming/climate change aspects of producing and burning this oil and gas. I would like to see every initiative to drill or frack be paired with an initiative to increase the supplies of renewable energy sources. Charge higher royalties for existing and new production to further equalize and tilt the playing field. Global climate change doesn't stop just because you turn to the financial pages.  Don't take this rant personally. I really appreciate the way you've helped us understand La Politica. It's just that the pervasive blindness towards climate change frequently gets to me.

No offense taken, Cheryl. We are not unaware of the paradox the oil discovery presents--a potentially huge gift for the aspirations of our people today--in this moment--and the potential danger of fossil fuels to future generations. Previous reader suggestions are helpful--that today we embrace our good financial fortunes to help resolve the state's long-standing social conditions crisis but also lay plans to gradually wean ourselves from oil dependency.

RICH AND/OR DEAD

Deryle Perryman writes

Interesting predicament presented in your column, eh? If those reports of the oil bonanza are anywhere near likely, apparently we're being presented the option of becoming "rich" and/or dead.

ART ATTACK

Charles Knoblauch writes of ART, the boondoggle rapid transit project for ABQ's Central Avenue:

Joe, for reasons I can’t quite figure out, there has been no real noise about the switch of the ART vehicles from electric to diesel. One of the great selling points was the non-polluting buses. Now that has been jettisoned with no outcry to have the heads of the city council members, former Mayor Berry, or the planners. We are now stuck with an unnavigable Central, belly up businesses, unnecessary new buses, and a big ass bill.
Maybe the problem is the lack of yellow vests in NM. Just a thought.

For those unsure about the "yellow vest" reference, check your Paris news feed.

Thanks for the mail. Social media sites such as Facebook are full of comment and opinion and while often entertaining. it's not always thoughtful. That's why we look forward to Reader Vox Populi and that's why. . . .

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(c)NM POLITICS WITH JOE MONAHAN 2018