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Energy in Communities: Las Cruces, New Mexico

Abundant Natural Gas, Oil Boost Economic Sectors Across New Mexico

The sun sets on the valley of the Rio Grande River near Hatch, New Mexico, splashing rows of green chilé pepper plants with one last burst of warmth. It’s a scene that has been re-enacted here since the conquistadors introduced the spicy plant to the region. Far removed from these conquerors of the past, the industry today is getting a boost from a new benefactor – the natural gas and oil industry.

This is the desert Southwest where, surprisingly, agriculture long has been a pillar of the regional economy. As you drive down Interstate 25, patches of green crowd around the banks of the river, following its winding path through the high mountain plateau. These fertile green fields and others across the state provide more than 40,000 New Mexicans with a living – including Marshall Wilson, who joined Adams Produce when he was just 18. More than a decade later, he walks through the chilé fields he manages with a deep appreciation for the interwoven relationship between energy and agriculture.

“Energy fuels everything. It’s not just economics. It’s also building infrastructure, investing in education, letting businesses thrive and providing a way for everyone to have a life that they can enjoy”
– Luis Morales, Researcher and Entrepreneur, New Mexico State University

“Energy affects everything we do, whether it’s the fertilizer that’s produced from natural gas or the diesel fuel for tractors, pumps and transportation. These are all bottom-line considerations for farmers,” says Wilson. “Even the power we use on-site to process the crops and support electric well pumps ties back to energy production.” The U.S. Energy Information Administration reports that more than 35% of the state’s power needs are provided by natural gas.

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Wilson’s chilé fields are hundreds of miles from the nearest natural gas and oil well. Yet, he is acutely aware of the broad, empowering nature of abundant energy. This includes direct industry benefits – jobs, investments and generated revenues for governments – as well as the foundational support that affordable energy provides for virtually all other endeavors. It’s a realization hitting home across industries and economic sectors across the state.

Natural gas and oil are produced in only a handful of New Mexico’s 33 counties, and yet state and local government agencies are seeing a funding renaissance from industry’s activities -- operations and pipeline and other infrastructure builds to maximize the benefits of energy production. The New Mexico Oil and Gas Association says its members contributed more than $2.2 billion to the state’s general fund in 2018. That’s money for schools, bridges, water treatment plants and a number of other critical state and local priorities for growing municipalities like Las Cruces.

Located 40 miles south of the Hatch chilé fields, Las Cruces is the second-largest city in the state. The county seat of Doña Ana is a hub for military installations, educational institutions, space flight companies and retirees – none of which would be possible without significant infrastructure upgrades.

Sue Padilla served as county manager for Doña Ana and speaks about the promise additional funding from natural gas and oil development brings to the state. “If we go back 10 or 15 years and look at where we were with growth in the county, we see a dramatic increase that could never have occurred without a significant infrastructure build-out supported by natural gas and oil revenues.”

She notes that in past years local governments like Las Cruces were more dependent on state funding, but the boon from natural gas and oil has given these governments a new ability to provide services and capital improvements that would have been impossible before. This is especially true for the state’s school systems.

In New Mexico’s 2nd Congressional District, where Las Cruces is located, the natural gas, oil and petrochemical industry:

27,090 direct jobs

Accounts for more than 8% of the district's jobs

51,100 indirect jobs

Supports 51,100 jobs overall, more than 15% of the district’s total employment

$6 billion

Adds more than $6 billion each year – almost 20% of the district’s total economy.

Statewide studies reveal that the industry poured more than $1 billion directly into the state’s school systems in 2018. That’s an average of $2,472 for every student in New Mexico. Most of this funding was earmarked for k-12 education, but there is also a significant allocation for the state’s university system.

Going further, Gov. Michelle Lujan Grisham has proposed free college tuition for all state residents – largely funded by natural gas and oil revenues. “I could spend well longer than 30 minutes telling you about the benefits of what’s going on in the state of New Mexico because of what’s going on in the oil and gas industry — opportunities that we haven’t seen, ever,” Grisham said last fall.

If the plan is approved, it will help remove educational barriers for aspiring future entrepreneurs and business leaders like Luis Morales. He’s 36, holds a doctoral degree in biochemistry and is CEO of a startup company that is creating an advanced pipeline coating to protect the infrastructure for transporting natural gas and hydrogen.

A product of New Mexico State University in Las Cruces, Morales is well aware of the important link between the industry and educational institutions for the future success of new entrepreneurs.

“Energy fuels everything,” he says. “It’s not just economics. It’s also building infrastructure, investing in education, letting businesses thrive and providing a way for everyone to have a life that they can enjoy.” Indeed, additional infrastructure – pipelines and other projects – are critically important to development, here in New Mexico and other parts of the country.

Luis Morales, H-Trap One, Las Cruces, New Mexico

Luis Morales, H-Trap One, Las Cruces, New Mexico

Morales grew up locally and was inspired by one of his high school teachers to become a scientist. Today he lives and works all over the world, pursuing the vision for his fledgling company. His success story is a hopeful theme you hear regularly repeated across the nearby desert highlands.

Local residents sense Las Cruces is poised for a time of growth and prosperity that directly reflects the regional expansion from El Paso to the Permian Basin near Carlsbad. Sue Padilla has a clear-eyed view of how important it is to seize this moment.

“My husband and I worked hard all of our lives to get where we are today,” Padilla says. “But that wouldn’t have happened without opportunities afforded us by economic development in the region.”

Back in Hatch, Marshall Wilson breaks a pepper off a plant and enjoys an afternoon snack as he surveys the fields that have become his home and workplace. A semi-truck piled high with peppers rumbles by on the nearby highway. That’s prosperity and progress – built on a foundation of responsibly produced natural gas and oil.

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