Wednesday, February 18, 2004

N.M. 2nd in '03 in Energy Funds

By Tania Soussan
Journal Staff Writer

    New Mexico received the second-highest amount of revenue from oil and gas drilling on federal lands in 2003, Interior Secretary Gale Norton said Tuesday.

    The state received $318.8 million, second only to Wyoming. Colorado, Utah and Louisiana rounded out the top five states, according to the Interior Department.

    Most of the money that comes to New Mexico is spent on public schools.

    "In K through 12 classrooms, teacher salaries are being paid in part by federal energy production," Norton said in a telephone interview.

    Half of all the revenue the federal government gets from oil and natural gas drilling on Bureau of Land Management and other public lands in New Mexico goes to the state.

    The state's high ranking in the revenue numbers reflects its prominent role in U.S. oil and gas production.

    "New Mexico has traditionally been a very large contributor to America's energy production," Norton said.

    While energy production is a big contributor to the state's budget, it also is controversial.

    Conservationists, ranchers and sportsmen have criticized the industry for the damage they say it causes to wildlife, domestic livestock and the environment.

    New Mexico's share of federal revenue was up last year from $193.6 million in 2002 but down slightly from $364.8 million in 2001.

    Fluctuations in natural gas prices account for the difference.

    Norton said the Interior Department is working to make natural gas more affordable by increasing production on federal lands and offshore areas.

    For example, the department is working on coal-bed methane gas production in New Mexico. Norton said that is the area of energy development that offers the largest potential growth.