|Select Economic and Energy Data†||Value||State Rank|
|Real Gross Domestic Product, per capita||$30,935||11th lowest|
|Gasoline Price, per gallon||$2.77||25th lowest|
|Electricity Price, per kWh||8.2¢||20th lowest|
New Mexico has below average electricity prices. Coal produces more than 70 percent of New Mexico’s electricity, and natural gas provides over 20 percent.
New Mexico’s natural gas production is almost 10 percent of the United States’ total. The San Juan Basin, located on the New Mexico-Colorado border, is the nation’s largest field of proven natural gas reserves. New Mexico is a leading coalbed methane producer, along with Colorado and Wyoming, supplying about one-third of the state’s natural gas production. The state also supplies about 3 percent of the United States’ oil production. Most of New Mexico’s coal deposits are in the San Juan Basin, which supply the state with its coal needs. About 40 percent of the state’s coal production is shipped to Arizona. New Mexico reportedly has substantial renewable energy potential through wind and solar power and has geothermal potential. Wind provides about 4 percent of the state’s electricity, but solar and geothermal make negligible contributions to the state’s electricity supply.
Regulatory Impediments to Affordable Energy
Although affordable energy is a vital component of a healthy economy, regulations frequently increase energy costs. Regulations imposed in the name of reducing carbon dioxide and greenhouse gas emissions are especially costly. Carbon dioxide is a natural byproduct of the combustion of all carbon-containing fuels, such as natural gas, petroleum, coal, wood, and other organic materials. Today, there is no cost-effective way to capture the carbon dioxide output of the combustion of these fuels, so any regulations that limit carbon dioxide emissions will either limit the use of natural gas, petroleum, and coal, or dramatically increase their prices.
Below are some facts about New Mexico’s regulatory environment that are likely to affect the cost of energy or the cost of using energy.
- New Mexico does not cap greenhouse gas emissions. However, the Environment Department requires power generators, cement plants, and refineries to report greenhouse gas emissions to the state.[i]
- New Mexico is a member of the Western Climate Initiative (WCI), a regional agreement among some American governors and Canadian premiers to target greenhouse gas reduction. The central component of this agreement is the eventual enactment of a cap-and-trade scheme to reduce greenhouse gas emissions to 15 percent below 2005 levels by 2020.
- New Mexico requires utilities to sell a certain percentage of electricity from renewable sources. The state’s renewable portfolio standard requires investor-owned utilities to provide 20 percent of total retail electricity sales from renewables by 2020 and cooperatives to provide 10 percent of total retail sales from renewables by 2020.[ii]
- New Mexico requires diesel to be mixed with renewable fuels. Senate Bill 489, passed in 2007, mandates that all diesel contain 5 percent biodiesel by 2012.[iii] Also, during the winter New Mexico requires the use of oxygenated motor gasoline in the Albuquerque metropolitan area.[iv]
- New Mexico imposes automobile fuel economy standards similar to California’s, which include attempts to regulate greenhouse gas emissions from new vehicles. Governor Bill Richardson issued Executive Order 2006-069 in 2006, which established goals and timetables to reduce greenhouse gas emissions, including plans to adopt California’s vehicle emissions standards.[v] The Environmental Improvement Board implements the standards.[vi]
- New Mexico requires new residential and commercial buildings to meet energy efficiency standards. Residential buildings must meet the 2006 International Energy Conservation Code (IECC), while commercial buildings must meet ASHRAE 90.1-2004.[vii] The IECC (developed by the International Code Council) and ASHRAE 90.1 (developed by the American Society of Heating and Refrigeration and Air Conditioning Engineers) are model codes that mandate certain energy efficiency standards. In 2006, Governor Bill Richardson issued Executive Order 2006-001, requiring all executive state agencies to meet the U.S. Green Buildings Council’s Leadership in Energy and Environmental Design (LEED) standards.[viii] All new public buildings larger than 15,000 square feet or using more than 50 kilowatts of electricity at peak demand must meet the silver LEED standard.
- New Mexico does not impose state-based appliance efficiency standards.
- New Mexico does not allow utilities to “decouple” revenue from the sale of electricity and natural gas. Some states decouple revenue from actual sales, allowing utilities to increase their revenue by selling less electricity and natural gas.
† Data Sources: Real GDP per capita 2008: Bureau of Economic Analysis, News Release: GDP by State (June 2, 2009), http://www.bea.gov/newsreleases/regional/gdp_ state/gsp_newsrelease.htm; Unemployment: Bureau of Labor Statistics, Regional and State Employment and Unemployment–February 2010 (Mar. 10, 2010); Gasoline Prices: American Automobile Association, AAA Daily Fuel Gauge Report (Mar. 30, 2010); Electricity Prices: Energy Information Administration, Electric Power Monthly, Table 5.6.B., Average Retail Price of Electricity, (March 15, 2010), http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_b.html; Electricity Generation Data: Energy Information Administration, Electricity Generation 2009, http://www.eia.doe.gov/cneaf/electricity/epa/generation_state_mon.xls.
[i] New Mexico Environment Department, Air Quality Bureau, Greenhouse Gases Reporting, http://www.nmenv.state.nm.us/aqb/ghg/ghgrr_index.html.
[ii] Lawrence Berkeley National Laboratory, Renewables Portfolio Standards in the United States, http://eetd.lbl.gov/ea/ems/reports/lbnl-154e.pdf.
[iii] S.B. 489 (N.M. 2007), http://www.nmlegis.gov/Sessions/07%20Regular/final/SB0489.pdf.
[iv] Energy Information Administration, New Mexico, Apr. 8, 2010, http://tonto.eia.doe.gov/state/state_energy_profiles.cfm?sid=NM.
[v] N.M. Exec. Order 2006-69 (Dec. 28, 2006), http://www.governor.state.nm.us/press/2006/dec/122806_01.pdf.
[vi] N.M. Stat. Title 20, Ch. 2, Part 88 (2009), http://www.nmcpr.state.nm.us/nmac/parts/title20/20.002.0088.htm.
[vii] Database of State Incentives for Renewables and Efficiency, New Mexico Building Energy Code, http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=NM10R&re=0&ee=1.
[viii] N.M. Exec. Order 2006-001 (Jan. 16, 2006), http://www.governor.state.nm.us/orders/2006/EO_2006_001.pdf.