Officials told lawmakers Monday that renewable energy projects on New Mexico’s state trust lands are already bringing in millions of dollars and could generate about $2.5 billion in revenue by 2040.
Deputy Commissioner Sunalei Stewart of the New Mexico State Land Office told the interim Revenue Stabilization and Tax Policy Committee that the 55 active wind and solar projects have generated $8 million this year, a 1,287 percent increase from 2019.
Officials also expect bigger revenues may be coming. The State Land Office manages about 12 percent of New Mexico’s land and leases these trust lands for energy development, commercial use, and agriculture.
The past eight years saw the office bring in $16 billion in total revenue. Last year, oil and gas alone added $3.1 billion to the state’s permanent fund. But Stewart said renewable energy offers a different long-term financial model.
Oil and gas leases can generate substantial returns early in their lives before production declines. Wind and solar projects, by contrast, require major upfront investments in equipment, infrastructure and land development but can provide a more consistent stream of lease revenue once they are operating.
Stewart said that the renewable projects already under lease, not counting those still pending or planned, are expected to generate $2.5 billion by 2040, offsetting air pollution equivalent to the carbon emissions from 380 million barrels of oil.
Lawmaker warns
Not everyone was convinced the long-term benefits came without risks.
Sen. George Muñoz, R-Gallup, questioned what could happen if renewable developers went out of business during the decades-long lifespan of wind and solar facilities.
The concern: taxpayers could potentially be left with the bill for dismantling abandoned projects.
“I think you’re putting us at risk,” Muñoz told Stewart.
Stewart said the State Land Office’s lease agreements already require developers to pay for decommissioning when projects reach the end of their useful lives.
Geothermal joins the race
The state is also looking beyond wind and solar. In May, the State Land Office adopted a new rule intended to make it easier to develop larger-scale geothermal energy projects on state trust lands.
Gov. Michelle Lujan Grisham has previously promoted New Mexico’s potential to become a major geothermal energy producer.
Stewart said the state is increasingly positioned to attract renewable energy investment, pointing to growing interest from the State Investment Council after it recognized the sector’s potential long-term value.
“New Mexico is primed to attract additional renewable energy business,” Stewart said.
The state’s public lands have long produced billions from oil and gas. And the numbers suggest a new energy economy is already taking shape, one lease at a time.
