July 2013

Geothermal Energy and Jobs Coming to New Mexico


Ray Powell, Commissioner of Public Lands


As New Mexico’s Commissioner of Public Lands my job is to generate revenue from our 13 million acres of State Trust Lands while protecting the health of these lands and resources for future generations.


Despite last year’s record-breaking $653 million in State Land Office-generated revenue, which goes to support our state’s public schools, universities and hospitals, we at the Land Office are always searching for ways to earn more money for the people of New Mexico and to better protect our lands and the environment. One energy source that can do both things is geothermal, an abundant renewable resource in our state.


This is a very exciting time for geothermal power production in New Mexico. For example, about 20 miles south of Lordsburg, on federal land, is a project to generate electricity from relatively shallow groundwater that is heated to over 300 degrees Fahrenheit by the earth’s natural heat. Cyrq, the company that is developing the project, already has an agreement in place with Public Service Company of New Mexico to sell the plant’s 10 megawatts of electric power to the utility. Construction on the project is expected to begin in the last half of this year.


One thing that makes geothermal stand out among renewable energy resources is that it produces electricity 24 hours a day, 365 days a year. This stands in contrast to solar energy, which depends on the sun being up, and wind energy, which needs to have the wind blowing at certain minimum speeds. In comparison, geothermal power provides a steady energy supply, just like the coal- and gas-fired plants it can replace. A number of western states already have geothermal power plants on line, but Cyrq’s project will be New Mexico’s first—with others to follow, if we do it right.


Advancing clean energy, creating jobs, and investing in New Mexico are core priorities for me at the State Land Office. Construction of the plant will result in an initial investment of $100 million in our state, create over 300 construction jobs over a two-year period, and provide good-paying jobs in our rural communities. Initiatives like this are key to helping us shake our current economic blues and create a strong, sustainable economic future.


In terms of royalty income, Cyrq will send nearly $150,000 per year to New Mexico for the first 10 years of the project. In subsequent years, that figure doubles to $300,000. If Cyrq were to double the size of the plant—perhaps on State Trust Land—then those figures could double again.


One of my priorities for the 2013 legislative session was HB85, our geothermal royalty bill, which was drafted by the State Land Office and makes New Mexico more competitive in attracting these clean-energy companies to state lands by matching federal royalty rates. The bill was sponsored by Rep. Brian Egolf, carried by Sen. Peter Wirth in the Senate, and signed into law by the governor. The bill unanimously passed both houses of the New Mexico Legislature and was a shining example of bipartisan work—something all New Mexicans want to see more of at all levels of government.


Finally, HB85 also requires the Land Office to manage geothermal resources as renewable resources. This means that we cannot allow users of geothermal waters to take so much heat from the waters that the temperature begins to drop. This added level of protection makes both good economic and environmental sense.


In closing, geothermal power production is just one of the many things that my staff and I are working on at the New Mexico State Land Office to generate revenue for the state and to protect one of our most treasured resources—our land.


The bottom line is, when we take care of our land, the land takes care of us.





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