California Bans Future Fracking & Its Public Bank Could Finance GND. Maybe NM Should Pay Attention

A short blog with only the headline topic featured. May our Governor read it. Wishing you a meaningful holiday weekend. May you return inspired, motivated and committed to the work to come.

Saturday, Nov. 30 (TODAY) at 8:30am on KSFR 101.1 FM or KSFR.org, Retake Our Democracy interviews Mariel Nanasi, Executive Director of New Energy Economy. Mariel is fearless in her leadership and her focus not just on climate change but on climate justice. With Mariel, it isn’t okay to take a modest deal if it leaves ratepayers paying the freight. It isn’t enough to create renewable energy sources if they don’t first benefit those communities that are often forgotten. Hear her take on the Energy Transition Act, PNM, the PRC, the Governor, and more.

California Signs Fracking Moratorium & Its Public Bank Could Fund the Green New Deal. Is This a Lesson to NM?

We can learn from California as they have now implemented two key elements of a shift to a just transition: a moratorium on fracking and a public bank with the capacity to finance the necessary investments in renewable infrastructure and creating a green economy.

As reported in Truthout, in November 19, Governor Gavin Newsom signed an order to place a moratorium on all future fracking in California. While California does not produce as much gas and oil as NM, this is a big deal, as new leases for fracking in California have doubled in the past year and the state now ranks seventh in gas and oil production. From Truthout:

“Governor Newsom has shown the world today that the future of climate leadership means saying ‘no’ to the fossil fuel industry’s dreams of endless expansion,” said Stephen Kretzmann, head of Oil Change International, one of the organizations behind the Keep It in the Ground movement. “While there is still a long road ahead, the measures announced today are important steps towards comprehensive action to phase out California’s oil and gas production and align its economy with climate safety,” he added.

Are you reading this, Governor? There is certainly a lesson here. Despite California’s own dependence on gas and oil, Governor Newsom found the courage to just say no, an important first step toward achieving a truly carbon-free state. Our Governor has her sites on a carbon-free state, but her definition of carbon-free leaves much to be desired, as it includes an unhealthy dose of nuclear and a natural gas “bridge” to the future, as we will soon discover as PNM’s unfolds its plans for replacing the coal at San Juan.

California is not only taking the first steps to keeping it in the ground, they have put in place the financial mechanism to make financing the costs of a Green New Deal far more palatable.

Public banks can be created throughout the state with the explicit mandate of building green and resilient infrastructure, supporting communities’ economic diversification, and encouraging education and training programs that can create a local, 21st-century workforce. They can do all of that while ensuring that the transition is done equitably and democratically. “

Truthout: Could California’s Public Bank Finance a Green New Deal

Public banks have a number of important advantages over mainstream banks as they are most often chartered with a social purpose, not just the capitalist mandate to produce maximum profits. As such, they can offer financing for projects with some risk but with significant projected social or environmental outcomes. They also can be designed to have boards comprised of members coming from multiple stakeholder communities, including those communities that are never represented on a Wall St. bank. It is far easier to charter a public bank with a strong mandate to fuel social and climate justice goals. But there is one other tool a pubic bank offers:

Add these to the potential of public banks as depository institutions to leverage up to 10 times their capital, and it’s clear how they can play a unique role in financing the just transition in the form of cheaper renewable and resilience projects, lower energy rates and reduced energy poverty, while ensuring low-income residents, often left aside in renewable and resilience projects, have access to the benefits.”

Truthout: Could California’s Public Bank Finance a Green New Deal

With a public bank, a state would not have to finance the full cost of expensive green infrastructure projects, critical to launching a just transition. Instead the state could invest 10% of the cost of a project with the bank financing the other 90%. This can vastly change the calculations of any number of important investments in paving the way to a just transition. Unfortunately, there has been no leadership from our Governor on a public bank. In a meeting with her chief Legislative liaison, Victor Reyes, he indicated that the Governor would not be pushing for any bill that wasn’t “bulletproof,” i.e., something that can pass the NM State Senate.

But progressive leaders don’t take their cues from the most conservative members of the legislature. They lead, they make their priorities known, and then work behind the scenes to build the political capital needed to advance those priorities. Worst case, the bill fails and those responsible for its failure must face the voters in 2020.

I am guessing that our Governor, Senator Wirth, and Speaker Egolf do not read our post with great regularity, so I’d like you to send them the link to this blog along with your own personal message encouraging them to look to California for direction and to find the moral and ethical courage to not just support, but to strongly advocate for:

  • A fracking moratorium on all future leases;
  • A public bank study to create a public bank and mirror what California has done to create the financial mechanism to support a just transition; and
  • An independent study to create a plan for making a just transition.

While a fracking moratorium would indeed have a financial impact, it would not be nearly the crippling blow described by Democratic Party centrists like US Rep. Xochitl Torres Small who was quoted the other day to have said:

“I know that if we were to shut down oil and gas drilling in New Mexico today, we’d have to shut down our schools tomorrow, statewide.”

In truth, a fracking moratorium such as the one introduced by Senator Antoinette Sedillo Lopez in 2019 (SB 459) would apply only to new leases. As such its impact on our financial bottom line would be far less than NMOGA and oil-thirsty Democrats might lead us to believe. A moratorium would serve two important goals: reducing our carbon footprint and stalling the massive over-development of southeast NM.

Right now roads, hotels, and other amenities are being developed at breakneck pace. What happens to all this development when the looming climate catastrophe makes it imperative that we keep it in the ground? Or when the gas and oil runs out? Are we simply building only to experience an inevitable bust?

Would it not make more sense to do as California has done and put future fracking on pause so that we can take a more thoughtful look at what we are doing to our planet and to a region of the state that may be loving the jobs now, but will be looking at an overbuilt infrastructure when the gas and oil industry exits in bankruptcy?

See below for contact info and be sure to send our Democratic leaders a link to this post.

In solidarity,

Paul & Roxanne

Governor Michelle Lujan Grisham

Speaker of the House, Rep. Brian Egolf.

Senate Floor Leader, Senator Peter Wirth

  • Address: 708 Paseo de Peralta, Santa Fe, NM 87501
  • Capitol Phone: (505) 986-4727
  • Capitol Room: 119
  • Office Phone: (505) 986-4727
  • Email: peter.wirth@nmlegis.gov

3 thoughts on “California Bans Future Fracking & Its Public Bank Could Finance GND. Maybe NM Should Pay Attention

  1. Comparing the impact on California and New Mexico of fracking bans and other limitations on the revenue the two states collect from Oil & Gas should start with comparing the relative contribution of Oil & Gas to the revenue to the general fund of each of the states. I can’t find the relevant data on the web, but I would expect that the percentage revenue to the general fund from Oil & Gas in California is probably much less than 10% of that in New Mexico.

    No doubt in my mind that we in New Mexico should be doing fracking bans and other limitations on Oil & Gas. But in doing so, we need to recognize the very significant impact on revenues to New Mexico’s budget. We need to develop other taxes, perhaps including taxes on renewable energy, that will fill the gap. We may need to phase them in more gradually than we would like. The politics of losing all that revenue from Oil & Gas is frightening, and BTW, much greater than it will be in California.

    • Agree Paul on the financials. But life on Earth is depending on us. It will not wait for political calculations. We missed the chance to do this with less pain. If we don’t, children born today likely won’t reach retirement age.

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