So I have a question for you, which is a follow-up on something that you mentioned the other day, and that is that in order to transition from a fossil fuel system to a renewable energy system, you need to take into account the economic transition. And right now the revenue from the fossil fuel economy keeps New Mexico, and other states that have extractive industries, afloat. Although, you know, there’s a bit of a boom bust cycle there too, when gas prices go up and down. But basically the revenue that New Mexico gets from oil and gas is not just from income taxes, corporate taxes, but also royalties real estate taxes, the severance tax. And if those things go away, they won’t be made up for by solar and wind at least as they’re structured now. This is New Mexico, this is other states that have extractive industries that are both in some ways toxic, but also economically beneficial. So the big question is, how do we think about this? How do you think about this?
Teresa Leger Fernandez:
So I think about it a lot as how we think about it, because we need to be very cognizant of the fact that we are ground zero. I call it ground zero, that New Mexico is ground zero for two things. One is that we will be hurt some of the hardest. We will suffer tragically if we don’t address the climate crisis. Because as some of the science shows, we will become the Sonoran desert. If anybody has not yet read Bill Debuys’ book, I recommend it. But you might cry, because he does a beautiful job of sleuthing through the science and coming up with the answer of what is likely to happen. If we do not take action, New Mexico will become the Sonoran desert
And the book is called A Great Aridness.
A Great Aridness. So I love New Mexico as it is, and I don’t want New Mexico to become the Sonoran desert. So I’m willing to take every action necessary to move us away from the warming that we need to do. I’m willing to take every action possible so that we don’t get the kind of warming that will lead New Mexico to become the Sonoran desert. On the other hand, we are incredibly dependent on the revenues from the extractive industries to fund our government, from our schools to other aspects of our government. So we want somebody in Congress, we want people in Congress, and I think we have people in Congress right now with the senators, and we have somebody over at the department of interior, who’s very aware of these two poles–that we must move away from extractive industries to save New Mexico, but at the same time, we must look at the kinds of alternatives that will generate the revenue we need to continue to operate our schools.
But that’s not say we can’t. It just means we have to think about that. And the options I am suggesting we review include a tremendous diversification of our economy. So to do that, we need to actually have significant federal investments in diversifying our economy so that we both work on the training of the workforce, and I’m working with people here in Congress who want to look at putting the money into retraining the workforce in those economies that will be moving away from fossil fuels. So part of it is let’s get ourselves ready for that. Another is investment in innovation technology. I would like New Mexico to be an innovation hub because we have what it takes. We have smart people. We have universities. We have national labs. So we have the nexus of what could be an innovation hub. And there was a need for more innovation hub.
They shouldn’t all exist on the coasts, in San Francisco and San Diego and Boston, New Mexico could be an innovation hub. That would be a wonderful way to diversify our economy, to create the kind of jobs. There is going to be a transition period where we might need to say to the federal government, look, we are going to suffer harm in order to help contribute to the effort to save our planet. We are going to need to have tax assistance in that process. We do it right now for impact aid for our schools, right? We recognize that the federal government has said we have all of these federal lands in New Mexico. You cannot tax those federal lands. So we will provide you with impact aid to make up for the loss of tax revenue. That same kind of structure could it be applied to the loss of tax revenue from the transition from fossil fuel.
There are lots of other alternatives that we can start exploring. And I am asking everybody I know to think about what are some of the ways in which we can make this step. And I think that that’s the endeavor that we need to set our minds to, is to be real honest about the need, and instead of just saying, we can’t do anything because New Mexico relies on it, say, of course we can do something because we must do something. And instead, what are ways in which we can think about how we make that up. And we have committed minds thinking about it, creative minds thinking about it, activists thinking about it, tax policy experts thinking about it, everybody thinking about it and coming up with ideas, that’s how we get to the solution. And so we’ve started that conversation here in Congress. I know that conversation is ongoing in the Senate and that conversation is ongoing with the White House. At the ideas conference those kinds of things were being discussed. I didn’t get to ask my question of Senator Kerry about it because we ran out of time, but I am going to send a letter saying this is really important. What can we do about it? I’m going to suggest some alternatives and we’re going to have that conversation with the White House.
One of the things that I’ve wondered for a long time is when you talk about the severance tax, I mean, that is, when oil comes out of the ground, that oil just at the ground level is taxed. It’s not about what you do with it afterwards, or how it gets processed or where it goes. It’s just like from the ground to the company, that’s extracting it, that’s where the severance tax is. Is it conceivable to do something like that with renewable energy? I mean, obviously they’re not extracting it, that’s why it’s renewable. But at the same time, is there a way to tax that at the source?
There are lots of different alternatives we can look at, including whether or not we need to look at the tax structure for renewable energies right now. I don’t think we’ve gotten to that. We’ve always been a point of listen, we need to help incentivize the building of renewable. Are we going to get to a point where we are at a point where we need to now say you are contributing, the industry is strong enough. We can start having a tax on the development of this energy. That is a conversation that can be had. I am not in a position to say I favor or disfavor that, but that is what tax policy would need to look at is, are we at a place where we can actually say this makes sense now? And maybe it’s somewhere where we say, well, not today because we’re really still in an incentive mode, but maybe when we hit this marker, we’re going to then be at that place. But that’s the conversation that we have to have.