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PROSPERITY FOR THE PUBLIC: State Trust Lands and the New Mexico Economy

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CONTENTS

Revenues - Oil & Gas - Mining & Minerals - Renewable Energy - Agriculture - Outdoor Recreation

By the Numbers

Executive Summary

Introduction

Distributions - Public Schools - Higher Education - Children’s & Rural Health Care - Behavioral Health Services - Water & Land Conservation

Opportunities - Permian Basin - Renewable Energy - Mining & Minerals - Agriculture - Outdoor Recreation

Conclusion

Cover and image above courtesy of the New Mexico State Land Office

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BY-THE-NUMBERS

Approximately

11.6% of New Mexico’s 77.6

million acres are held in trust by the state and managed by the State

Land Office.

Funds linked to state trust lands have contributed

$3.1 BILLION

to New Mexico education over the last five years.

Distributions to all beneficiaries totaled

$3.5 billion.

Payouts from state trust land funds saved

each New Mexico household about

$1,105 in taxes last year. Over the past decade, these

savings add up to $8,600 per household in taxes.

93% OF REVENUES

from state trust lands come from oil and gas

development.

15 APPLICATIONS

for new renewable energy projects applications

were processing in the State Land Office at the end of the most recent

fiscal year.

Leasing of state trust land is critical for ranching, a $1.68 billion industry in

New Mexico that supports

16,000 JOBS.

Revenues from non-oil-and-gas mining

and mineral development totaled

$18 MILLION

in Fiscal Year 2018, an increase of more than

100% from the previous fiscal year.

100%

State trust lands generated a record

$851.9MILLION

in revenue in Fiscal Year 2018, an increase of 28%

from the previous year.

28%

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Executive SummaryApproximately 9 million of New Mexico’s 77.6 million surface acres – or roughly 11.6% – are state trust lands. These lands, managed by the State Land Commissioner, are an important source of tax revenue and job creation in the New Mexico.

Revenue for state trust land beneficiaries is generated by eco-nomic activities – such as oil and gas development, grazing, mining, renewable energy, and outdoor recreation – on specific acreage designated to them.

State trust lands support tens of thousands of jobs for New Mexicans in oil and gas production, agriculture, mining, and renewable energy. For decades these activities have safely oc-curred alongside other important uses of state trust land, such as outdoor recreation, which is also a major contributor to the New Mexico economy. While only about a quarter of state trust land are leased for oil and gas development, this use accounted for 92.9% of state trust land revenue in Fiscal Year 2018.

About 85% of the revenue generated each year on state trust lands goes to public education. The rest helps fund colleges and universities, health care, and other public services and projects. In turn, these beneficiaries help strengthen the state economy. The revenues generated from state trust lands and distributions from their corresponding funds have trended upward over the last decade and recently reached record highs last year of more than $800 million each.

New Mexico has the opportunity to enhance this success in the future thanks to a wealth of resources, including a high concentration of state trust land in the Permian Basin and high potential for wind and solar power generation. State trust lands also make ranching economically feasible for many ranchers, which benefits the state’s wildlife and helps to improve outdoor recreation opportunities.

Taking advantage of these unique opportunities will expand and diversify New Mexico’s economy, create jobs in multiple industries, and help build a stronger future by generating in-creased revenue for education, health care, and public institu-tions across our state.

IntroductionApproximately 11.6% of New Mexico’s 77.6 million surface acres are state trust lands. In terms of total state trust land acreage, New Mexico is second only to Arizona, which has 9.2 million surface acres of state trust lands. However, because New Mex-ico also has nearly 13 million acres in subsurface estate, which includes oil and gas, New Mexico’s state trust lands generate far more revenue ($851.9 million in New Mexico versus $204.5 million in Arizona, based on the last full fiscal year).1

NM4EP | Prosperity for the Public

Unlike federal lands – such as those under control of the U.S. Forest Service or Bureau of Land Management, which are typ-ically managed with a multi-use mission – state trust lands are managed to generate revenue. These revenues come from many different activities on state trust land, including oil and gas production, farming and ranching, mining of minerals like potash, renewable energy like wind and solar, outdoor recreation and many others.

These activities are critical for the New Mexico economy and budget, particularly education. In Fiscal Year 2018, develop-ment on state trust lands generated $851.9 million in revenue for our state, which is equivalent to 14% of the entire state budget that year.

Depending on the source, this revenue flowed to either the Land Grant Permanent Fund or Land Maintenance Fund. Distributions from these funds totaled $828.2 million in Fiscal Year 2018. Eighty-five percent of these distributions went to K-12 public schools. The rest helps fund colleges and univer-sities, rural and children’s health care, behavioral health ser-vices, and water conservation projects, among other public services and projects.

State trust lands also support tens of thousands of jobs for New Mexicans in energy, mining, and agriculture. For de-cades these activities have safely occurred alongside other important uses, such as recreation and tourism, which are also major contributors to the New Mexico economy. This balanced approach to development has created a boom for New Mexico in recent years: the state currently has one of the fastest growing economies in the country and had a $1.1 billion budget surplus in the 2019 legislative session.

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REVENUESA wide range of activities on state trust lands generate reve-nues for beneficiaries, from agriculture and mineral develop-ment to outdoor recreation and leases for billboards. These revenues are then deposited into two funds, depending on the type of activity that generates them. Royalties for oil, gas and other minerals become part of the Land Grant Perma-nent Fund, as do proceeds from one-time land sales. Rental revenues for activities like agriculture, rights-of-way, and oil and gas leases go to the Land Maintenance Fund.

In Fiscal Year 2018, the total revenue to these two funds was $851.9 million – the highest level in state history. Of this revenue, $161.5 million went to the Land Maintenance Fund and $690.4 million went to the Land Grant Permanent Fund. Overall, this represents an increase of 28.3% from Fiscal Year 2017. Royalties generate several times more revenue than rentals every year, ranging from 4.3 times to 9.9 times more in the last decade.

Oil and GasLess than a quarter of New Mexico state trust land is leased for oil and gas development, yet 92.9% of all state trust land revenue came from this industry in the form of royalties, rentals, bonuses, and interest. In Fiscal year 2018, oil and gas rentals, bonuses, and interest amounted to $112.2 million, or about 69.5% of the total $161.5 million Land Maintenance Fund revenue. Oil and gas royalties amounted to $679.4 mil-lion, or 98.4% of all royalties.

Mining & MineralsMining and mineral resources that also generate both rental and royalty income include coal, potash, industrial minerals, sand and gravel, geothermal, and salt and fresh water. In all, mining and minerals combined for $9.3 million of royalty

revenue and $8.7 million of rental revenue in Fiscal Year 2018. The $18 million total mining and mineral revenue from Fiscal Year 2018 was more than double the revenue from these resources in the previous fiscal year.

Renewable EnergyWind and solar energy together generated $937,118 for the Land Maintenance Fund in Fiscal Year 2018. This was a slight increase from the previous year and nearly double the revenue from Fiscal Year 2015. There are wind farms located on state trust lands in Torrance and Quay counties, among others, while the largest solar plant in New Mexico is located on 500 acres of state trust lands in Luna County.

With 15 applications for renewable energy projects applica-tions processing in the State Land Office at the end of the fiscal year, renewable energy has the potential to play a larger part in generating revenue for the state in the near future.

AgricultureNew Mexico’s culturally and economically important agriculture industry also makes use of state trust lands for both livestock grazing and cropland production. There are about 3,500 agri-culture leases on state trust land that coexist with other types of leases such as renewable energy production, oil and gas development, and commercial leases. The income from these agriculture leases has risen every year since Fiscal Year 2012, generating $56.2 million for the Land Maintenance Fund in that time. In Fiscal Year 2018, agricultural leasing generated $11.2 million, more than double the revenue from Fiscal Year 2012. Agricultural activity on state trust land benefits the state in other ways, according to Chad Smith, CEO of the New Mexico Farm and Livestock Bureau:

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“ Through grazing fees, cattle grazing on public lands benefit local school children. Fees collected by the State land office provide over $10 million for public schools and higher education in our state. Cattle grazing on state trust land takes rangeland that is too rocky or arid to be productive and creates commodities that benefit all New Mexicans.”

Outdoor RecreationOutdoor recreation is another important use of state trust land that also generates revenue for the state. The State Game Commission pays an annual rental fee of $1 million to the State Land Office so that New Mexicans and others can use state trust lands to hunt, trap, and fish.2 The easement secures access to most state trust lands for hunters and anglers during season and one week prior for scouting. This includes 12,000 acres of prime wildlife habitat3 that is home to elk, deer, bears, mountain lions, turkey, and other species in the White Peak area of northern New Mexico. Additional revenue is generated from outfitter and hunting guide per-mits, which cost $500 annually.

State trust lands are also home to other significant recreation opportunities and historic sites such as the Mystery Stone in Valencia County, Monticello Box in Sierra County, and part of the Rio Grande Bosque in Bernalillo County. These sites and others offer opportunities for New Mexicans to hike, rock climb, mountain bike, and view wildlife with a $35 per year recreational permit from the State Land Office. Across New Mexico, outdoor recreation is a $9.9 billion industry that supports 99,000 direct jobs. Although these figures include activities on state trust and non-state trust lands, they demonstrate the recreational value of state trust lands and the importance of continuing a balanced approach to development.

Over the last ten fiscal years, revenue from state trust lands has totaled more than $6.25 billion. During that time, oil and gas development accounted for $5.85 bil-lion (93.5%) of that revenue. Even though an overwhelm-ing majority of the revenue from state trust lands is gen-erated by oil and gas development, less than 25% of New Mexico’s 9 million state trust land acres are leased for this purpose. The majority of state trust land is leased for agriculture, which helps to generate revenue on land that does not have significant mineral resources. Recent projections suggest New Mexico will also continue to expand renewable energy such as wind and solar power, including on state trust lands, and access for outdoor recreation will continue to be a key part of New Mexico’s broader strategy on state trust lands.

DISTRIBUTIONS Each year, hundreds of millions of dollars are distributed to nearly two dozen public institutions that are designated ben-eficiaries of state land. Beneficiaries include New Mexico K-12 public schools, colleges and universities, hospitals, and water agencies, among others. Each acre of state land is assigned to a beneficiary that receives revenue distributions from the activities that take place on the specific land held in trust for it.

In the last ten years, more than $6.55 billion has been distribut-ed from the Land Grant Permanent Fund and the Land Mainte-nance Fund. These distributions have become an increasingly important part the state budget. In Fiscal Year 2018, these two funds contributed $851.2 million to public institutions across the state, an increase of 50% from a decade ago.

The Land Maintenance Fund pays for the operations of the entire State Land Office, with the remaining balance distributed to beneficiaries on a monthly basis. In Fiscal Year 2018, activity on state trust lands generated $161.5 million for the Land Main-tenance Fund (LMF). After deducting the State Land Office op-erating costs, $139 million was disbursed to the beneficiaries.

Royalties are transferred monthly from the State Land Office to the Land Grant Permanent Fund (LGPF), which is managed by the New Mexico State Investment Council (SIC). The SIC makes investments in equities, bonds, and real estate with the goal of growing the fund beyond direct revenues. Then 5% of the rolling five calendar year average market value is distribut-ed to the beneficiaries each year via the state legislature. The LGPF’s value4 as of February 2019 was $17.97 billion. In Fiscal Year 2018, a total of $689.2 million was distributed to benefi-ciaries from the fund.

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EducationNew Mexico public schools receive the most revenue from state trust lands. In a typical year, about 85% of the total dis-tributions from the LGPF and the LMF flows to public schools. For Fiscal Year 2018, this amounted to $698.4 million, 14% more than the previous year and a 40% increase from five years ago. This money is distributed following the State Equalization Guarantee Distribution, meaning every single student who attends public schools in New Mexico benefits from revenues derived from economic activity on state land.

In addition, the state-run New Mexico School for the Deaf in Santa Fe and the New Mexico School for the Blind and Visual-ly Impaired each have their own designated state trust lands. These two schools have received more than $126.4 million in the last five years.

In all, funds linked to state trust land have contributed $3.1 bil-lion to educating young New Mexicans in just the last five years.

Today, the state’s high school graduation rate is at an all-time high and more schools in New Mexico are receiving “A” grades while fewer are getting “F” grades in their state assessments.

There is still progress to be made, but a stronger education system in New Mexico is critical to sustained prosperity, and increased economic activity on state trust lands is a major contributor to this mission. Having a skilled and educated workforce will continue to attract new industry to New Mexico and enable existing businesses to expand.

Public Colleges and UniversitiesAll seven of New Mexico’s public colleges and universities – University of New Mexico, New Mexico State University, Western New Mexico University, Eastern New Mexico Univer-sity, Northern New Mexico College, New Mexico HighlandsUniversity, New Mexico Institute of Mining and Technology –receive funding from state trust lands, as does the New Mexi-co Military Institute, a public military junior college in Roswell.

“ Economic activity on state trust lands provide an integral source of funding for our state’s higher education system. Without the millions of dollars these lands provide every year, our public colleges and universities would be forced to cut programs, raise tuition - or both. Instead, we are using these resources to help prepare students for careers and training the next generation of leaders right here in New Mexico which further enhances the economic

landscape in our state.” - Dan Salzwedel, former regent, Western New Mexico University.

Over the last five years, these institutions have received $192.5 million in revenue linked to their state trust lands. This includes $48.8 million in Fiscal Year 2018, the highest total ever.

Rural & Children’s Health Care Thirty-two of the 33 counties in the state face shortages of healthcare providers such as doctors and nurse practitioners. These short-ages are particularly pronounced

in New Mexico’s rural counties. But multiple institutions are helping to fill these gaps, and those institutions are supported directly by state trust lands revenues.

Miners Colfax Hospital, for example, provides acute and long-term care services to Raton and surrounding rural communi-ties in northeastern New Mexico. Carrie Tingley Hospital was founded in Truth or Consequences as a hospital for children

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stricken with polio. Now, it is part of the University of New Mexico health care system and provides health care to children and adolescents with complex musculoskeletal and orthopedic conditions, rehabilitation needs, developmental issues and long-term physical disabilities. This care is provided regardless of ability to pay, aided by funds from state trust lands.

These two hospitals received $11.4 million from state trust lands in Fiscal Year 2018 – an increase of 62% from the previous year – and $42.4 million over the past five years to provide health care to children and in rural communities.

Behavioral Health ServicesThe New Mexico Behavioral Health Institute (NMBHI) also contributes to health care in rural communities. The hospital, located in Las Vegas, operates community mental health ser-vices in three counties and its telemedicine program allows outreach to clients around the state.

State trust land funds contributed $5.4 million to these ser-vices in Fiscal Year 2018 (an increase of 25.3% over the pre-vious year), bringing the five-year total to $20.8 million. In a state that faces significant challenges such as above-average rates of illicit drug use and overdose deaths, state trust lands are a critical source of funding for behavioral health services.

Water & Land ConservationEven with above average snowfall in many parts New Mexico during the 2018-19 winter, a portion of the state still faces5 severe drought, making water infrastructure vital to our eco-nomic well-being. Revenue generated by economic activity on certain state trust lands is designated to help fund irriga-tion projects along the Rio Grande and other water projects around the state via the Irrigation Works Construction Fund. These beneficiaries received $10.2 million in Fiscal Year 2018, bringing the five-year total for state trust land-funded water projects to $47.1 million.

A portion of the Land Maintenance Fund revenue also flows into the State Trust Lands Restoration and Remediation Fund, which is then used for projects that reclaim damaged surface lands and watersheds. Started in 2017, the fund has already financed land improvements in Bernalillo, Catron, Chaves, Rio Arriba, and Torrance counties.

In the last ten years, more than $6.55 billion has been distributed from the Land Grant Permanent Fund and the Land Maintenance Fund. Without these distribu-tions, New Mexicans would either pay higher taxes or see cuts to these public services. The $851.1 million paid out in Fiscal Year 2018 saved each New Mexico household about $1,105 in taxes. Over the past decade, distributions from state trust land funds have saved New Mexico households $8,600 in taxes.

A study by the New Mexico Tax Research Institute notes the importance of the Land Grant Permanent Fund as a “large, stable revenue stream addition” for New Mexi-co’s government that provides “predictable investment income streams to help stabilize” the state budget. Based on the myriad public services that it helps fund, it’s easy to see why NMTRI came to that conclusion.

OPPORTUNITIESEconomic activity on state trust lands generated a record $851.9 million of revenue last fiscal year, helping to fund edu-cation along with other services and projects that are helping to create a brighter future for New Mexico. Yet activity on this land and the resulting benefits for our state have the potential to expand in the coming years thanks to abundant resources, state trust land distribution, and environmental stewardship.

Permian BasinIn November 2018, the U.S. Geological Survey (USGS) identified an estimated mean of 46.3 billion barrels of oil, 281 trillion cubic feet of natural gas, and 20 billion barrels of natural gas liquids in the Wolfcamp Shale and overlying Bone Spring Formation in the Delaware Basin portion of Texas and New Mexico’s Permian Basin. This was the largest assess-ment of recoverable oil and gas USGS had ever made in the United States.6

A large part of these formations lies under Lea and Eddy counties in southeastern New Mexico, and a significant por-tion of the mineral acreage in these counties is held in trust by the State Land Office. Twenty-one percent (572,272 acres) of the mineral estate underlying Eddy County is held in trust by the state. Lea County is home to the largest state trust min-eral estate holding in terms of acreage (1.3 million acres) and percentage of the county (46%). In Chaves County, where Permian production also occurs, the state holds 1.05 million acres (26%) of the mineral estate.

Accompanied by subsequent and separate announcements7 by two major energy companies that they are planning to increase production in the Permian to 1 million barrels each per day within in the next several years, New Mexico should continue to see strong revenue growth from state trust lands in southeastern New Mexico.

“ New Mexico’s Permian Basin is among the best in the world for oil and natural gas production. We are rising to the challenge of driving New Mexico’s economy, and we can continue to safely develop our oil and natural gas resources and enjoy robust growth for the foreseeable future.” - Ryan Flynn, executive director, New Mexico Oiland Gas Association.

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One obstacle faced by operators in the Permian has been a pipeline bottleneck. Two significant pipeline projects are expected to go into service by the end of the year that will significantly increase takeaway capacity from the Permian. Eleven others are under construction that will take resourc-es from the Permian to the Gulf Coast, from which export capacity is also being expanded.10,11

Given the relative concentration of state trust lands in the region, pipelines that begin in New Mexico could generate additional right-of-way revenues, building on the $15.4 million generated in Fiscal Year 2018.

Renewable EnergyWhile New Mexico ranks high among states for potential wind and solar power capacity, renewable energy only accounted for about $937,000, or 0.1% of total state trust land revenue in Fiscal Year 2018. However, as of the end of the fiscal year, the State Land Office was processing 15 additional renewable energy applications.

An analysis by the State Land Office determined that there are about 475,000 acres of state trust land suitable for wind development based on average wind speed and elevation. This is enough to support up to 3,711 wind turbines, which would generate annual revenues of about $27.9 million.

The New Mexico Workforce Solutions Department predicted that solar photovoltaic installers and wind turbine service technicians would be top occupations in terms of job growth at 112.6% and 57.5%, respectively, between 2016 and 2026. Some of this additional employment will likely be supported by renewable energy projects on state trust lands.

These projects will also require new transmission lines to distribute the electricity generated around New Mexico and potentially to other states with growing renewable energy markets, such as California. These transmission lines, par-ticularly high-voltage lines that can support industrial-scale projects, can take years to build because of patch-work permitting processes and opposition from landowners and environmental groups.12

Like oil and gas pipelines, transmission lines across state trust lands pay for leases and rights of way on state trust land and offer another opportunity to increase revenue for the state.

Mining & MineralsThe revenues from non-oil-and-gas mining increased 109% between Fiscal Years 2017 and 2018 and could see additional increases in the years to come. New Mexico is already the largest potash producing state in the country, some of which comes from state trust lands. Strong global demand for the mineral, which has a wide variety of agricultural and industrial applications, has triggered a recent increase in prices.13

New Mexico may gain additional jobs and revenue if potash production is increased in response to this growing demand.

AgricultureThe State Land Office leases about 8.8 million acres to ranchers and farmers.14 This widespread availability of leasable land makes many New Mexico ranching operations viable, according to New Mexico Farm and Livestock Bureau CEO Chad Smith.

“Most ranchers don’t own enough private land to provide forage for a decent sized herd, so they lease land from the state land office and are charged a fee per animal, per month,” Smith said.

The State Land Office in March announced that the 2019-20 grazing fee will be $5.56 per animal unit month (AUM), a decrease of 1.8% compared to the previous year in response to market conditions such as private grazing land lease rates, beef cattle prices, and the cost of livestock production.15

A report released by the Linebery Policy Center for Natural Resource Management quantified beef cattle ranching’s contributions to New Mexico’s economy: more than 16,000 jobs, $1.68 billion in economic output, and $448 million in labor income.16 Much of this impact is made possible by state trust lands.

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In addition to new jobs and economic activity, leasing state trust lands to ranchers contributes in other ways. Smith add-ed, “Agriculturists are great stewards of the land, making im-provements for livestock that also benefit the state’s wildlife.”

Outdoor RecreationRevenues generated by recreation on state trust lands have been largely driven by hunting and fishing through an ease-ment with the Department of Game and Fish. However, land commissioners have recently undertaken efforts to expand access and recreational use of state trust lands.

Because of the different management purposes of federal land (multi-use) and state trust land (generating revenue), opportunities for New Mexicans to recreate on state trust lands are more restrictive. For example, while most land managed by the U.S. Forest Services or the Bureau of Land Management is generally open to anyone who hikes, bikes, or drives up to it, those wishing to access state trust lands for recreational purposes must submit an annual notarized affidavit and contract to the State Land Office.

In 2019, Land Commissioner Stephanie Garcia Richard signed a special use permit with the Continental Divide Trail Coalition granting them the ability to issue permits to hik-ers and horseback riders to use portions of the Continental Divide Trail that cross state trust land. Approximately 400 people per year attempt to hike the entire trail, which begins in southern New Mexico and ends in Montana. Many more people access portions of the trail throughout New Mexico for day or section hikes.

Previous Land Commissioner Aubrey Dunn also sought to expand recreational use as a means to generate revenue, launching a “Recreation for Education” initiative that iden-tified ten sites around the state offering “exceptional oppor-tunities for hiking, biking, horseback riding, rock climbing, wildlife viewing, and even a little mystery.”17

The newly created Outdoor Recreation Division within the state’s Economic Development Department may increase the opportunities from state trust lands. Doing so could increase visitation and further develop New Mexico’s outdoor recre-ation economy.

Seizing on these historic opportunities in oil and gas production, renewable energy development, mining, agriculture, and outdoor recreation will expand and diversify New Mexico’s economy while creating jobs in multiple industries. Continuing to leverage the revenues generated for state trust beneficiaries will help build a brighter future by supporting a stronger education system, better health care, and other important public institutions and projects.

CONCLUSIONNew Mexico is fortunate to have its state trust lands. These 9 million surface acres and 13 million subsurface acres deliv-er immense benefits to our economy and state coffers, far exceeding what any other state receives from their state trust lands.

In Fiscal Year 2018, economic activity on state trust lands generated $851.9 million in revenue. Nearly 93% of the revenue, $791.7 million, came from oil and gas development, although only about a quarter of surface acreage is leased for this purpose. The rest of the revenue was generated by farm-ing and ranching, mining, renewable energy, and other uses. State trust lands support tens of thousands of jobs in these industries, which have long coexisted alongside outdoor rec-reation, such as fishing and hunting.

Revenues have risen and fallen over the last decade – from as low as $420.2 million in Fiscal Year 2010 to the record-high last year – but are trending upward. In that time period, state trust lands have generated $6.26 billion in revenue for the Land Grant Permanent Fund and the Land Maintenance Fund.

Distributions from these two funds have also been on an up-ward trajectory in the last ten years, up to $162 million from the Land Maintenance Fund and $689.1 million from the Land Grant Permanent Fund last year. This brought total distribu-tions to a record-high $828.2 million in Fiscal Year 2018 – an increase of 17.7% over the previous fiscal year, which had been the biggest year on record.

About 85% of the distributions every year go to New Mexico public schools, helping to strengthen our education system. Another 9% supported other educational institutions such as the New Mexico School for the Deaf, New Mexico School for the Blind and Visually Impaired, and the state’s seven public colleges and universities. These institutions help prepare the next generation of the New Mexico workforce and are critical to attracting new business and allowing existing business to expand.

The rest of the distributions support programs and services around the state that grow New Mexico’s economy, such as water infrastructure and conservation projects, and improve quality of life, such as rural and children’s health care and behavioral health services.

Looking ahead, New Mexico has the opportunity to extend the benefits we receive from state trust lands and expand the number of jobs and economic impact they support.

Global energy demand is continuing to grow, and New Mexico can help meet that need with oil and gas developed on state trust lands. With a portion of the largest continuous oil and gas potential ever measured by the U.S. Geological Survey

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underneath parts of New Mexico, and with high concentra-tions of surface and subsurface state trust land holdings, New Mexico’s state trust lands will be a critical source of energy – domestically and for America’s trading partners abroad. Con-tinuing to leverage this generational energy opportunity will create additional jobs, economic impact, and state revenues.

At the same time, New Mexico could greatly increase its re-newable energy production on state trust lands, creating new jobs and generating additional revenue. Renewable energy appears poised to play a larger part in generating revenue for the state if sufficient transmission line capacity (which will likely cross state trust lands and generate more revenue) can be built to get the energy to consumers.

Farming and ranching on state trust lands also create oppor-tunities for the state, as many ranchers do not own enough private acreage to sustain a decent herd size. Grazing cattle and sheep contribute to healthy soils, watersheds, and wildlife habitat, which improve opportunities for outdoor recreation to be a larger factor on state trust lands.

By capitalizing on these opportunities, state trust lands will expand and diversify New Mexico’s economy, create jobs in multiple industries, and help build a stronger future by generating increased revenue for education, health care, and public institutions across the state.

1 https://land.az.gov/sites/default/files/2018 Letter to the Governor.pdf 2 http://www.nmstatelands.org/uploads/files/Commercial/game and fish 2017-

2020.pdf3 https://elknetwork.com/white-peak-new-mexico-public-access-project/4 http://www.sic.state.nm.us/dashboard.aspx5 https://droughtmonitor.unl.edu/CurrentMap/StateDroughtMonitor.aspx6 https://www.usgs.gov/news/usgs-announces-largest-continuous-oil-assess-

ment-texas-and-new-mexico7 https://www.cnbc.com/2019/03/05/exxon-chevron-announce-plans-to-surge-

output-from-permian-basin.html8 https://www.nmoga.org/2018_new_mexico_oil_production_soars_to_a_re-

cord_250_million_barrels_in_20189 https://www.currentargus.com/story/news/local/2019/03/08/oil-and-gas-pipe-

lines-nm-texas-solve-permian-bottlenecks/3086329002/10 https://www.permian.texansfornaturalgas.com/permian-pipelines11 https://www.reuters.com/article/us-carlyle-group-oil-exports/carlyle-takes-step-

forward-on-1-billion-u-s-oil-export-project-idUSKCN1R92SY12 https://cronkitenews.azpbs.org/2018/08/20/sunzia-power-lines-would-destroy-

wetlands-kill-birds-opponents-say/13 https://www.forbes.com/sites/timtreadgold/2019/03/20/strong-de-

mand-from-farmers-for-crop-boosting-potash-triggers-a-mining-rush/#5c-b7810a4436https://www.forbes.com/sites/timtreadgold/2019/03/20/strong-demand-from-farmers-for-crop-boosting-potash-triggers-a-mining-rush/

14 https://www.rdrnews.com/2019/03/13/state-land-office-decreases-grazing-fees/

15 https://www.rdrnews.com/2019/03/13/state-land-office-decreases-grazing-fees/

16 https://aces.nmsu.edu/pubs/taskforce/lpc/LPC_1.pdf17 http://www.nmstatelands.org/uploads/PressRelease/9250263cb3c948359b-

511cb3e7f7d88b/7.18.17___Recreation_for_Education_Initiative.pdf