Dec. 8—The New Mexico State Land Office, bringing in its second-highest revenue ever, announced this week that it earned $2.56 billion in fiscal year 2024.
Unsurprisingly, most of that money came from the oil and gas industry, although fossil fuels are down significantly from last fiscal year – the only time the Land Registry has earned higher revenues. Revenues from renewable energy are still less than 1% of total revenues.
The $2.56 billion will go to state beneficiaries, with public schools receiving the most.
“We are proud to once again bring in billions from activities on state lands to make a long-term difference for our children,” Land Commissioner Stephanie Garcia Richard said in a statement.
Oil and gas accounted for about 94% of Stand Land Office’s total revenue in FY24. About $2.3 billion came from royalties, and another $97 million came from land leases. That’s down from FY23, when the oil and gas industry generated $2.66 billion, about 97% of total land office revenues in that fiscal year.
The State Land Office highlighted that in FY24, $214.5 million came from sources other than oil and gas – a record amount.
“We have strived to diversify our revenue-generating activities every step of the way, and we are starting to see real results with our highest revenues from sources other than oil and gas rights ever,” said Garcia Richard. “These revenues keep our public institutions running while keeping money in the pockets of New Mexico taxpayers.”
Yet the money coming in from renewable energy continues to account for less than 1% of total revenue, as was also the case last financial year.
In FY24, approximately 0.17% of total revenue came from renewable energy, including $3.2 million from wind energy and approximately $904,500 from solar energy – equating to $4.4 million. It compares to FY23, when solar and wind rentals also brought in about $4.4 million.
Renewable energy revenues will never match oil and gas, Garcia Richard has long said, telling the Journal via email this week that clean energy revenues will likely never surpass oil and gas royalties.
“But we know oil is a finite resource. Once a producer pulls oil out of the ground, it’s gone forever,” Garcia Richard said. “Understanding that reality, we need to get revenue from as many sources as possible so that money continues to flow into our schools once the sources start to dry up.”
That’s also why she wants higher royalty rates for the oil and gas industry, she said — to generate more revenue while oil production is still at high levels.
The State Land Office supported legislation this year and last that would raise New Mexico’s cap on royalty rates, raising the maximum amount oil producers pay on the value of oil or gas removed from 20% to 25%. Both times it died.
After the attempt failed again this year, Garcia Richard decided to stop leasing the prime land for oil and gas exploration. She said the pause is still in effect and will remain until lawmakers raise the cap on royalties to 25%, which she said could happen in the 2025 Legislature.
“New Mexico schools have subsidized the oil and gas industry for too long. … It just wouldn’t make sense for lawmakers to continue to leave money on the table that could go to our public schools and other vital institutions,” Garcia said. Richard said.
Despite the emergence of a federal government that is more vocal in favor of oil and gas than renewable energy, the New Mexico State Land Office has a mandate to make as much as possible for the state’s beneficiaries, “regardless of who is in power at the federal level. Garcia Richard said.
Garcia Richard said she has made a point of institutionalizing revenue diversification efforts at the State Land Office, such as her agency’s codified Office of Renewable Energy.
“I am confident that the steps we have taken to diversify our revenue sources at the State Land Office are now not only effective, but also provide a blueprint for how we can maximize all resources available to the trust,” she said.
