Energy policy in New Mexico

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Energy policy in New Mexico
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Quick facts
Energy department: Energy, Minerals and Natural Resources Department[1]
State population: 2.1 million
Per capita income: $35,079
Energy consumption
Total energy consumption: 331 trillion BTU[2][3]
Per capita energy consumption: 688 trillion BTU
Energy spending
Total state energy spending: $8,846 million
Per capita energy spending: $4,256
Residential natural gas price: $9.45 per thousand cubic foot
Residential electricity price: 11.09 cents per kWh
See also
Energy on the ballot
Statewide fracking on the ballot
Local fracking on the ballot
Policypedia Energy logo.jpg
Energy Policy Project
Energy policy in the United States
Energy use in the United States
Energy terms and definitions
Energy policy in New Mexico
Fracking in New Mexico

Energy policy in New Mexico depends on geography, natural energy resources, how electricity is generated, how much energy consumers use, politics and the influence of groups such as environmental and industry organizations. Decisions by policymakers, such as state and local governments, utilities and regulatory agencies, affect all citizens economically and environmentally, and are generally geared toward providing reliable, affordable energy. The cost of energy affects not only home heating and electricity bills, and thus disposable income, but also economic growth, including jobs, investment and the cost of doing business in the state.

How energy is produced and consumed also has an impact on the environment and pollution. Energy policy in New Mexico, and many other states, focuses on decreasing emissions and dependence on fossil fuels by increasing energy efficiency and the use of renewable energy. As the infrastructure for producing and delivering renewable energy sources is not as advanced as it is for energy generation from traditional sources, these policies often require subsidies to make the produced energy affordable, and their effects are difficult to measure.

Energy policy involves tradeoffs between providing an affordable, consistent energy supply on the one hand, and limiting pollution and protecting the environment, on the other. How states attempt to balance these two differs between states, and often boils down to costs to consumers versus costs to the environment. This article provides general energy information about the state as the context within which energy policy is made, as well as information about major legislation and public and private groups that play a role in setting energy policy in the state.

See also: Energy policy in the United States for more information on energy policy.
See also: Fracking in New Mexico

Energy overview

State facts

Below are quick facts about New Mexico's energy climate.

"New Mexico"

  • has fossil fuels in the form of natural gas and petroleum.
  • has renewable energy in the form of wind, geothermal and solar energy.
  • ranks among the top ten in the nation for natural gas production for which New Mexico is a net exporter.
  • a leading state in the nation to distribute grid-connected solar PV capacity.
  • ranked 6th in on-shore crude oil production.
  • iis in the bottom fifth nationally for electricity consumption.
  • mandates that 20 percent of all electricity sold in-state come from renewable sources by 2020.[4]

In New Mexico

  • household consumption of natural gas is among the top one-fifth of states.
  • two thirds of households use natural gas as their main home heating resource.
  • geothermal energy is used mainly for greenhouse agriculture.
  • industry is the largest energy-consuming sector in the state.[4]

Available energy resources

New Mexico has traditional energy resources including oil, coal and natural gas. Between three and four of every one-hundred barrels of petroleum produced nationwide are from New Mexico's Permian Basin, which contains three of the one-hundred largest oil fields in the United States. Four active coal mines produce enough for the state and excess to export to nearby states such as Arizona. About five percent of natural gas production comes from the state, ranking it among the top ten states.[4]

New Mexico has renewable energy resources with high potential for wind, solar and geothermal energy. Nearly a dozen wind farms in the state are operating with more in the planning stages. New Mexico has high solar potential, as it enjoys over 300 days of annual sunshine. Rooftop installation has seen an increase in solar photovoltaic (PV) facilities, ranking New Mexico among the top states for use of this technology. Geothermal energy mainly supports greenhouse agriculture, mostly among the state's farmed green chiles. The geologically active Rocky Mountain area has promising geothermal energy resources. With bountiful renewable resources, the Renewable Energy Transmission Authority (RETA) aims to connect Arizona and California to its market. RETA aims to send up to 5,200 megawatts of renewable energy to other states across federally held lands.[4]

Consumption and prices

Energy consumption in Alabama
NM energy sector usage chart.png

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As shown on the pie chart in 2011, more than one-third of New Mexico's energy use was industrial, and slightly less than one third was used for transportation. The rest was used mostly in residential and commercial buildings--for heating, cooling, lighting and other functions. Most of the energy used in the state is in the form of petroleum (used primarily for transportation), followed by electricity and natural gas.[4] Gasoline, used in transportation, accounts for about 75 percent of the petroleum consumed in the state. Generally the price of gasoline in the state tracks slightly lower than the national average.[6][7] According to the U.S. Energy Information Administration's (EIA) February 2014 report, the federal excise tax is 18.40 cents per gallon of gasoline and 24.40 cents per gallon of diesel fuel. In addition to that, New Mexico collects a total tax of 18.9 cents on every gallon of gasoline, gasohol diesel fuel, which ranks it at the 43rd highest in the United States.[8][9]

Comparisons tables

The table below compares New Mexico's consumption and spending for energy, as well as prices for gas and electricity, and carbon emissions to those of Arizona, which has similar population, resources and consumption needs because of climate and geography. Also given are the U.S. averages and the state rankings. All rankings are from highest to lowest, so, for example:

  • New Mexico's rank of 35th in carbon emissions means that carbon emissions are lower in New Mexico than in Arizona, which has a ranking of 23rd.
  • These two states are very similarly placed for per capita income and electricity prices.
  • Per capita income in New Mexico (at 44th) is somewhat lower than in Arizona (at 42nd), but per capita spending in New Mexico is significantly higher since it ranks 33rd to Arizona's ranking of 50th. This is somewhat surprising because electricity prices are nearly similar but natural gas prices are significantly higher in Arizona which was ranked at fifth highest price.

The higher price of natural gas in Arizona may result from the fact that most of the resource is exported from New Mexico, on which both states rely to use as the primary home heating source.[4][10]

Consumption and Expenditures Comparisons Summary
Type New MexicoArizonaU.S. Figures
FigureU.S. Rank*FigureU.S. Rank*Totals
Population2.1 million366.6 million15313.9 million
Per Capita Income Average$35,07944$35,97942$42,693
Total Consumption688 trillion BTU371,431 trillion BTU2697,301 quadrillion BTU
Per Capita Energy Consumption331 million BTU23221 million BTU44312 million BTU
Total Spending on Energy$8,846 million38$22,465 million24$1,394,088 million
Per Capita Spending on Energy$4,25633$3,47450$4,474
Price of Residential Natural Gas, dollar per thousand cubic feet9.4531$15.015$12.48
Price of Electricity, cents per kWh11.092711.062812.31
Total Carbon Dioxide Emissions, million metric tons (2010)54.83595.9235,631
*Rank is from highest to lowest.

Natural gas is the main source for home heating in New Mexico, accounting for 67.7 percent of all homes. Electricity is the next most common source, followed by LPG, other sources and fuel oil.

See also: State Energy Rankings to compare all 50 states
Consumption of energy for heating homes in New Mexico
Source New Mexico 2011 U.S. average 2011
Natural gas 67.7% 49.5%
Fuel oil 0.1% 6.5%
Electricity 15.5% 35.4%
Liquid Petroleum Gases (LPG) 8.9% 5%
Other/none 8.0% 3.6%

Production and transmission

New Mexico produced 3,040 MWh of energy in 2011. Of that over 70 percent came from coal and nearly 30 percent from natural gas. One-half of a percent came from what the U.S. Energy Information Administration classifies as 'other,' which is "assumed to equal consumption of all renewable energies except biofuels."[11]

Energy production by type in New Mexico, 2011
Type Amount Generated
(trillion BTU)
% of State % of USA
Crude oil 6 0.2% 0.05%
Natural gas 698 22.96% 2.63%
Coal 2,132 70.13% 9.67%
Other 192 6.32% 2.69%

Natural gas production ranks New Mexico among the top ten in the states, producing about 5 percent of national output. Interstate pipelines send natural gas to Arizona, Texas and on to markets from the West Coast to the Midwest. The San Juan Basin is home to a natural gas production center named Blanco Hub. It connects the major trading states carrying Rocky Mountain natural gas. Nuclear power provides almost one-fifth of electricity and is produced at the Point Beach nuclear plant, which was built in 1970, and is licensed to operate until 2025. In May 2013 the only other nuclear power plant in the state closed after 40 years of operation due to economic circumstances.[4]

Electricity produced and consumed in New Mexico comes primarily from coal. Coal in New Mexico produces almost 2 percent of U.S. net generated electricity in 2011. The state has been mining coal since the mid 1800's all over the state. San Juan Basin in the northwest region of the state is currently the only area being mined. Surplus electricity generated from coal and natural gas is shipped to Texas, Arizona, California and Utah. It is also used in New Mexico.[4]

New Mexico ranked sixth in the nation in 2011 for crude oil production, excluding federal offshore areas. In the Mountain West, it is the largest petroleum producer and contributes between three and four of every one-hundred barrels nationwide. Existing pipeline capacity has been filled with petroleum and some producers are using railroads as alternative transportation. Artesia, the larger petroleum refinery, processes heavy crude oil imported from Canada and light crude oil from the Permian Basin in the southeastern part of New Mexico. The refineries serve the southwestern U.S. and northern Mexico markets. San Juan Basin crude oil is the main supplier of diesel, motor gasoline, heavy oils, butane and propane to pipelines mainly in the southwestern markets.[4]

Where electricity comes from in New Mexico[12]
Type Amount generated (MWh) % of state** % of U.S.**
Petroleum-fired 413,400 18.28% 1.37%
Natural gas-fired 1,405,200 62.14% 0.14%
Coal-fired 406,000 17.96% 0.02%
Hydroelectric 4,200 0.19% 0%
Other renewables 32,400 1.43% 0.02%
Total net electricity generation 2,261,200 100% 0.06%
**Note: Because the U.S. Energy Information Administration (EIA) does not include all of a state's energy production in these figures, the EIA totals do not equal 100 percent. Instead, we have generated our own percentages.

In New Mexico there are currently 20 municipal and cooperative electric utilities and three investor-owned utilities. Tribal, military and other local utilities collaborate to take part in reducing greenhouse gases. For natural gas there is one municipal utility and 10 private natural gas utilities.[13]

Most of the coal produced and consumed is mined within New Mexico. The electric transmission system in New Mexico is primarily supplied by three utilities: Tri-State Co-op and Transmission Association supplies electricity to 13 co-ops; Xcel supplies four.[14]

Energy policy

Policy Issues

The below average price of electricity in New Mexico may be affected by the state's energy regulations. New Mexico's does not have a cap for greenhouse gas emissions and does not impose state-based appliance efficiency standards. The state does require utilities to sell a specified amount of renewable energy and has commercial building codes.][15]

See also: Fracking in New Mexico

Energy policy is made, executed and influenced by many organizations, both public and private, and is codified in the laws and regulations of the state. Each state’s energy policy involves tradeoffs in which energy production and prices are weighed against environmental concerns and efficiency. New Mexico has been relatively supportive regarding energy efficiency and renewable energy use. With its bountiful resources in solar, wind and geothermal energy, New Mexico has great potential for meeting its renewable energy mandates. As of 2012, New Mexico's renewable portfolio standard (RPS) required investor-owned electric utilities to provide 20 percent of electricity sold in-state from renewable sources by 2020. No less than half of the renewable sources must come from solar and wind energies.[4][16][17][18]

New Mexico ranked 24th out of 50 on the Energy Efficiency Scorecard produced by the American Council for an Energy-Efficient Economy.[4][19] There are differing estimates about the economic impact of these mandates in terms of costs that may affect prices and jobs, as well as the impact on the environment and pollution. Thus, for example, there are many new studies of what is called the "rebound effect" which refers to the fact that "some of the theoretically estimated gains in energy efficiency will be eroded as consumers consume additional goods and services."[20][21]

Major legislation

  • Renewable Energy Act (2005) set state Renewable Portfolio Standards and goals. Public utilities are allowed to create rate-making programs to recover costs through producing renewable energy that meets the qualifications. This act promises public utilities and their customers reasonable cost thresholds as they transition to increased use of renewable energy.[22]
    • Mandatory Utility Green Power Option is an additional requirement of New Mexico's RPS. It requires investor-owned utilities to offer their customers programs for purchasing renewable energy. An education program must be created by utility companies and made available to their customers. The programs need to describe the benefits and availability of green power option.[23]
  • Efficient Use of Energy Act (2005) allows public natural gas and electric utilities to participate in energy reducing and cost effective programs. The act requires electric utility organizations to provide written documentation of energy-efficient programs to the New Mexico Public Regulation Commission. Governing bodies of each cooperative utility will be approved for such programs to implement cost-effective energy reduction programs. Funds for these programs are provided through a tariff rider for load management and energy-efficiency. Monitoring, verification, and periodic reporting are also provided through the act. The utility is responsible for demonstrating overall program success and efficiency expenditures.[24]
  • New Mexico's Solar Right Act (2006) allow property owners to create solar easements to protect and maintain adequate access to sunlight. The act created the right to use solar energy as a property right. The goal is to prevent residents from building or planting anything that may block another person's access to their sunlight.[25]
  • Resource Diversity and the Renewable Portfolio Standard, Rule 572 mandates that investor-owned utility (IOUs) must offer a renewable energy program to their customers. To achieve a diversified portfolio of renewable energy, investor-owned utilities should meet the following percentages of New Mexico's total renewable sold resources: 30 percent wind, 20 percent solar, 5 percent other technologies, 1.5 percent distributed generation and 3 percent distributed generation by 2015.[26]
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State energy policy

State fracking policy

Energy policy terms

Fracking in the U.S.

Energy use in the U.S.

Energy policy in the U.S.

See also
Local fracking on the ballot

Statewide fracking on the ballot

Government agencies and committees

  • The New Mexico Public Regulation Commission (NMPRC) is made up of five representative commissioners. They work together to assure adequate and reasonable services to the communities of New Mexico as provided by law by tracking utilities, motor carrier industries and telecommunications.[28]
  • Within the New Mexico State Energy Offices is the Energy, Minerals and Natural Resources Department, which was created through a merger between the Natural Resources Department and the Energy and Minerals Departments in 1987. The mission of the department is "to position New Mexico as a national leader in the energy and natural resources areas for which the Department is responsible." They envision a sustainable environment and economic future for New Mexico where organizations, agencies and individuals work together on natural resources and energy management. The department strives to make New Mexico a leaders in creating energy efficient technology and balancing traditional and renewable sources. The department is managed by the New Mexico Secretary of Energy, Minerals and Natural Resources.[29]
  • The State Land Office administers 9 million acres of state-owned land and 13 million acres of mineral rights for the state. The office is managed by the New Mexico Commissioner of Public Lands. The office is tasked with generating and maximizing revenue from state land trusts while concurrently protecting, conserving, and maintaining the lands for use by future generations. The money generated is used to support public education and other beneficiary institutions. These revenues are generated by the land commissioner by leasing lands for grazing, agriculture, commercial use, oil and gas drilling, mining and other activities.[30]

Major organizations

  • The Renewable Energy Industries Association of New Mexico (REAI) promotes renewable energy. The group represents hundreds of businesses and strives to maintain and produce jobs related to renewable energy. REAI attempts to create more jobs and strengthen New Mexico's economy by fighting for continued growth in the renewable energy industry through a combination of technology, financial incentive programs, environmental policies and public interest.[31]
  • Northern New Mexico Group has more than 2,700 members who want a healthy and safe community. They value using smart energy solutions and lifestyles to tackle climate change and to preserve America's natural land. Educational material on these topics is provided through the group. Priorities of the organization include: solar energy efficiency, dirty to clean coal transitioning, energy efficient practices and protecting public lands.[32]
  • The New Mexico Center for Energy Policy (NMCEP) brings communities together to challenge energy security issues within the nation. The center believes that developing government and private sector ties will advance the potential for development in diversified energy and energy policy within neighborhoods. The state contains many resources: natural gas, wind, oil, biofuels, solar and nuclear energy. The group facilitates economic energy development programs, encouraging local social capital towards policy risk for energy reduction.[33]

In the news

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See also

External links


  1. National Association of State Energy Officials, "New Mexico," accessed March 9, 2014
  2. These figures come from the U.S. Environmental Information Administration State Profiles and Energy Estimates, New Mexico Overview. Statistics for population and per capita income are for the year 2012; consumption and spending estimates are for 2011; and prices are for October 2013. Updated pricing information is available on the state's EIA profile. Prices will be updated on this page biannually.
  3. U.S. Energy Information Administration, "New Mexico Overview," accessed February 22, 2014
  4. 4.00 4.01 4.02 4.03 4.04 4.05 4.06 4.07 4.08 4.09 4.10 U.S. Energy Information Administration, "New Mexico Profile Analysis," December 18, 2013, accessed February 22, 2014
  5. This chart depicts the state's energy consumption as reported by the EIA for 2011. Click the image to enlarge.
  6. Gas Buddy, "Historical Gas Charts," accessed February 22, 2014
  7. To compare current gasoline prices in New Mexico to the U.S average, go to
  8. U.S. Energy Information Administration, "Petroleum Marketing Monthly," February 2014, accessed February 14, 2014
  9. The Tax Foundation, "State Gasoline Tax Rates, 2009-2013," March 21, 2013
  10. U.S. Energy Information Administration, "Arizona Profile Analysis," December 18, 2013, accessed February 25, 2014
  11. U.S. Energy Information Administration, "State Energy Data System, Production," accessed February 22, 2014
  12. These figures come from the EIA State Profiles and Energy Estimates U.S. Energy Information Administration, "New Mexico Overview," accessed February 22, 2014
  13. Dreaming New Mexico, "Governance," accessed February 23, 2014
  14. Dreaming New Mexico, "Governance," accessed March 11, 2014
  15. Institute for Energy Research, "New Mexico," accessed March 17, 2014
  16. According to a report called "The Status of Renewable Electricity Mandates in the States," by the free-market Institute for Energy Research, the cost of electricity in states with RPS were on average 38 percent higher in 2010 than in states without a RPS.
  17. Institute for Energy Research, "The Status of Renewable Electricity Mandates in the States," accessed March 24, 2014
  18. Manhattan Institute, "The High Cost of Renewable-Energy Mandates," February 2012
  19. American Council for an Energy-Efficient Economy, "State Energy Efficiency Policy Database," accessed February 27, 2014
  20. International Risk Governance Council, "The Rebound Effect: Implications of Consumer Behavior for Robust Energy Policies," accessed March 3, 2014
  21. Scientific American, "How Bad Is the Rebound from Energy Efficiency Efforts?," May 21, 2013, accessed March 3, 2014
  22. U.S. Department of Energy, "Renewable Energy Act (New Mexico)," accessed February 23, 2014
  23. Database of State Incentives for Renewables & Efficiency, "Mandatory Utility Green Power Option," accessed February 23, 2014
  24. Database of State Incentives for Renewables & Efficiency, "Use of Energy Act," November 6, 2012, accessed February 23, 2014
  25. Database of State Incentives for Renewables & Efficiency, "Solar Easements & Rights Laws," accessed March 15, 2014
  26. New Mexico Public Regulation Commission, "Resource Diversity and the RPS," accessed February 23, 2014
  27. American Council for an Energy-Efficient Economy, "Utility Policies New Mexico," accessed February 22, 2014
  28. New Mexico Public Regulation Commission, "Regulation Commissioners," accessed February 22, 2014
  29. Energy Conservation and Management Division, "About," accessed February 22, 2014
  30. New Mexico State Land Office, " Agency History," accessed June 11, 2013
  31. Renewable Energy Industries Association of New Mexico, About, accessed February 22, 2014
  32. Sierra Club, "About the Northern New Mexico Group," accessed February 22, 2014
  33. New Mexico Center for Energy Policy, "About the NMCEP," accessed February 22, 2014