Oil and gas companies in New Mexico’s booming Permian Basin have a new landlord—a former teacher who wants the industry to pay more to drill on state lands.
That goal is a work in progress for state Land Commissioner Stephanie Garcia Richard, a Democrat who took office in January. While her proposal to raise oil and gas royalty rates failed in the Legislature, Garcia Richard’s first few months as commissioner have already changed a role that men had held since the office was established in 1899.
Garcia Richard is the first woman elected to what is considered one of the state’s most influential positions, leading an office that oversees millions of acres of land leased for various uses.
Her campaign focused on raising more revenue for education and tripling renewable energy projects on state lands—platforms that some opponents criticized as being in opposition to oil and gas companies.
“Resources from state lands have been controlled by a small but powerful industry, resulting in sweetheart deals that take money from our schools, hospitals, and colleges,” Garcia Richard told the Albuquerque Journal during her campaign.
New Mexico’s State Land Office generated $852 million in lease payments, oil and gas lease sales, fees, royalties, and other revenue in fiscal 2018, according to the office. That money funds public institutions in a state that depends heavily on oil and gas.
Proposing changes to an industry that reached record production in New Mexico last year inevitably draws controversy. Garcia Richard said some of her priorities will take time, but that her focus is on negotiating how the state can profit the most from its land while protecting it as a resource.
“I think there’s a lot of potential to do good in this office,” she told Bloomberg Environment.
Pressure ‘To Get Things Right’
The ties between the land office and the money it generates for schools inspired Garcia Richard to run for the position. Her background as a public educator means she knows “the value of a dollar in a classroom,” she said.
She grew up in Silver City in the southwestern part of the state, and family ties to ranching connected her to public lands early on, she said.
She spent six years serving in the state House, where she chaired the Education Committee and worked on legislation aimed at increasing access to education, transparency, and investments in renewable energy, job training, and economic development.
The State Land Office is undergoing a culture shift, Garcia Richard said. More than 60 percent of the leadership team are women, according to the office.
It is also working on an internal rule change to make sure leases and documents are gender-inclusive instead of defaulting to “he.”
In a recent announcement outlining her first 100 days as commissioner, Garcia Richard said she felt “a tremendous responsibility to get things right” as the first woman in the role.
The team of female leaders is a change for Jordan Kessler, the office’s new assistant commissioner for mineral resources who previously worked for private law firms on oil and gas regulatory issues. The chance to address water and methane policies as well as work with Garcia Richard convinced Kessler to take the role, she said.
“I so much admired her vision for New Mexico,” Kessler said.
Rate Increases Denied
Industry advocates and other opponents, though, have pushed back on some of Garcia Richard’s positions. One group has criticized her office’s new logo, which features windmills instead of oil wells.
The Rio Grande Foundation, a free-market think tank in Albuquerque, started a contest to redesign the logo to focus on the oil and gas industry. Garcia Richard called the idea a gimmick and said the office logo shows a commitment to sustainability and renewable energy.
Legislators also killed a proposal this year to raise the state’s royalty rates on high-producing oil and gas leases and to require a royalty for vented and flared gas. Garcia Richard argued the rate increase would put New Mexico on par with Texas.
Opponents, though, said the legislation would make New Mexico state lands less attractive to businesses. Producers would move elsewhere, which would reduce competition and hurt the state’s income, they argued.
“We should be looking to attract capital, not push it away,” Aimee Barabe, a lobbyist for the New Mexico Oil and Gas Association, told lawmakers earlier this year.
But Garcia Richard said she’s seen some early successes. Democratic Gov. Michelle Lujan Grisham signed a law to increase transparency and public input for state land deals.
Garcia Richard also established a renewable energy office within her agency to actively recruit projects to state lands. New Mexico could become a wind and solar leader and diversify its industries, she said.
“We’re shifting our focus,” she said.
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