Geothermal brings jobs to New Mexico

Palinpinon Geothermal power plant in Philippines - courtesy of wikipedia

Guest Column by Land Commissioner Ray Powell

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 an exciting time for geothermal power production in our state. 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 more than 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 more than 300 construction jobs over a two-year period, and provide good-paying jobs in our rural communities.

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 state Senate, and signed into law in early April by Gov. Martinez. The bill unanimously passed both houses of the New Mexico legislature and was a shining example of bipartisan work.

Finally, HB85 also requires the Land Office to manage geothermal resources as renewable resources. This means that we can not 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.

Geothermal power production is just one of many things that my staff and I are working on at the New Mexico State Land Office to generate revenue for the state