Latest Member Analysis
THE GREAT OIL PRICE RIGG
By: Tom Wright
Oil prices are up over 60% since President Biden took office. Locally, the gasoline average is up 35% and propane up 30-cents per gallon. Why? Because the president shut down production and pipeline transportation of crude. It is not because OPEC and Russia have refused to increase their production or because the oil companies are gouging, as President Biden has indicated.
According to the U.S. Energy Information Administration, the average price of gasoline in 2020 was $2.17. According to the AAA, as of November 21, 2021 the average in New Mexico was $3.347. In 2020, the average natural gas spot price at Louisiana’s Henry Hub was $2.05 per million British thermal units, the lowest annual in decades. The November 20, 2020 price was $2.40, due to cold weather and the increase in demand. The November 2021 spot price is $5.06. That increase is more than double in one year and a sure enough negative for the Biden Administration whose Secretary of Energy, Jennifer Granholm cackled at the idea we had any control over the price of oil. In a recent press conference she had no idea what our daily domestic consumption is and she also cameoed in a 2018 video singing about the end of fossil fuel. And she is our energy secretary?
Natural gas, largely used for home heating is also used to drive electric power plants so, there goes our cost of electricity.
Like him or not, President Trump gave us low gasoline prices, oil independence, and we became a net exporter country. Now, President Biden is begging OPEC and Russia to increase production so we can buy more from them instead of producing it at home, but OPEC told the president to take a hike and the president is in a bind.
To ease the price of gasoline, Biden has authorized selling oil from our 727-million-barrel strategic petroleum reserve (SPR) which is stored for emergencies like fuel shortages, national disasters and war.
The market intelligence firm Kepler estimates 12 million barrels of the SPR have left our shores for Asia in the past two months. The White House has just authorized 50 million barrels for release. The problem is, it amounts to only three days of domestic consumption and is fully priced at market value. Such will do nothing to reduce the local price and then it must be refined. The sensible answer is, resume domestic production in ANWAR, on government lands and remove the closure of pipelines.
President Biden and Secretary Granholm are scapegoating their own inflationary policies by blaming the oil companies. The investment bank, Goldman Sachs sees the SPR release as being mostly political in response to inflationary pressures across the economy.
The reality is, the Biden Administration is kowtowing to the climate change lobby by rigging prices and driving the price of fossil fuel higher so the public will beg for cleaner, cheaper energy sources which are now not economically affordable or able to replace fossil fuels as a reliable energy source. This administration is creating a calculated mess and we are paying for it. They want higher prices to precipitate consumer demand for greener energy and to blame inflation on the energy sector, which they see as a political adversary.
Here in New Mexico, we depend on the oil and gas industry for a large portion of our state’s revenue. Last year, that amounted to $2.8 billion which was 33.5% of our state’s spending.
Additionally, President Biden has nominated Moscow educated Saule Omarova as Comptroller of the Currency. She has stated she wants to force banks to withhold loans to oil companies as to bankrupt the sector. Now, that would really help us here in New Mexico. Watch how your senators vote on her confirmation.
By Tom Wright
News & Reports
The Long-Term Economic Costs of Lost Schooling
Lost study time for children during the pandemic has the potential to do lasting harm not just to their own long-term prospects but to American prosperity in general. On average, children lost 116 days of reading time during the early stages of the pandemic last year and 215 days of math work—instruction that will be hard to regain and could leave a whole generation of children struggling to keep up in their studies and testing. Children in rural areas and areas with large Black and Hispanic populations were hit the hardest.
APS funding has increased while enrollment continues to fall, evaluation finds
Albuquerque Public Schools has been steadily losing students for years and currently has 400 more teachers and staff members than it should.
Yet student achievement, especially among “low-income students,” has faltered, particularly since the COVID-19 pandemic.
It’s time for school officials to right-size and seize opportunities to improve student performance, analysts for the powerful Legislative Finance Committee said in a sobering review released Wednesday.
“Despite more funding, and fewer students, student outcomes in the district remain low and are getting worse,” lead LFC program evaluator Katie Dry told lawmakers. She noted that APS is the state’s largest school district, responsible for educating nearly a quarter of New Mexico students and for a similar percentage of the state’s public education budget.
See where ABQ ranks among cities with least student debt
Albuquerque has the 10th lowest student debt in the country, according to a LendingTree report. Washington, D.C was first among metros with high median student loan balances, where nearly 10 percent of loan holders owe more than $100,000.
The cost of a four-year education has increased by five times in the last 20 years, and student-debt is a $1.5 trillion industry, a huge leap compared to $600 billion a decade ago, says LendingTree.
The median balance of student debt in Albuquerque is $15,549. The average number of student loans held by a single person is 3.5. Nearly 19 percent of people in Albuquerque owe more than $50,000 and roughly 6 percent of people owe more than $100,000 in student-loan debt.
State chooses 10 high schools for training initiative
The New Mexico Public Education Department is launching a three-year training initiative for 10 high schools in the state.
The schools chosen by PED are: West Mesa, Belen, Bernalillo, Cuba, Española Valley, Rocinante, Miyamura, Gilbert L Sena Charter, Health Leadership and Las Montanas Charter high schools. PED picked the schools, which were identified for Comprehensive Support and Improvement or CSI, to be the first to partake in the inaugural New Mexico High School Redesign Network.
Secretary-designate Christopher Ruszkowski said the program aims to help the schools move out of CSI, a category for low-performing schools.
One of the main goals of the redesign network is to help raise graduation rates, as the schools’ rates are below 67 percent.
Economy and Job Creation
Viewpoint: Why I’m betting on NM’s oil sector
When the stampede for acreage in the Delaware Basin began in 2016, many across southern New Mexico had already given up on the state’s oil patch and left for jobs elsewhere. Despite a steady recovery, the previous two years of free-falling prices clearly took a toll on the local economy.
Eighteen months later, New Mexico is firmly at the center of a broader national comeback by the oil and gas industry. Last year, New Mexican output was nearly 470,000 barrels a day, up 17 percent from the previous year and more than doubling since 2011. New Mexicans haven’t seen an upswing in output like that since the 1960s.
The revival of the state’s oil sector has brought new employment and investment opportunities. Those opportunities are increasingly among the oilfield service companies that handle the drilling and day-to-day operational activities for the big producers.
Here’s what jobs we have in New Mexico (and what we’re missing)
(Part 4 in a 4 part series)
Government work. That’s the past and present of the New Mexico jobs story.
So, what’s the future of that story?
In the short term, health care looks likely to boom, along with the hospitality industry and education.
But what about the jobs that aren’t in the Land of Enchantment yet, the ones that might bring the state’s stubbornly high unemployment rate closer to parity with the national average?
While it is difficult to quantify an intangible, there are educated opinions on what might narrow the current jobs gap. New types of technology may bring job types to the state that aren’t here now. More mid-level careers could bolster a market already represented on the higher and lower ends. And getting significant numbers of people to relocate to New Mexico to make up for the young people who leave because they perceive a lack of opportunity would generate additional long-term jobs in existing categories like construction and health care.
Do What Works to Help Welfare Recipients Work
President Trump issued an executive order Tuesday encouraging federal agencies to adopt more-stringent work requirements for various welfare programs. What can Congress do to encourage work? Two possibilities are increasing the minimum wage and expanding the earned-income tax credit. My recent research shows that these two policies can have very different, and perhaps unintended, effects on the ability to become economically self-sufficient over time.
Texas healthcare company bringing 244 jobs to ABQ
Carenet Healthcare Services, a Texas-based health care support company, is expanding to Albuquerque with plans for 244 jobs over the next five years.
The San Antonio-based firm will also invest $3 million in the former Bank of America building at 303 Roma NW. The sum includes a 10-year lease, tenant improvements, furniture, fixtures and equipment, according to information provided by Albuquerque Economic Development Inc.
Gov. Susana Martinez, at a news conference Tuesday, called the Carenet announcement a “positive result of the reforms implemented to grow and diversify our economy.”
APD initiates child abuse investigation policy changes
In response to public concern and questions over how Albuquerque police handled a teacher’s child abuse report, all Albuquerque police officers have been issued what the mayor called “common sense” new orders.
Police Chief Michael Geier issued three special orders on Wednesday that require all officers called to a possible child abuse call to collect any possible evidence, preserve all on-body camera footage indefinitely and access a law enforcement portal that provides police with information on prior contact between the family and social workers.
Working on Food Stamps
A common refrain from businesses is that they can’t find enough workers. The unemployment rate is a low 4.1%, but one reason for the shortage are government benefits that corrode a culture of work. So credit to House Republicans for trying to fix disincentives in food stamps amid what are sure to be nasty and dishonest attacks.
New Mexico remains the worst state to raise a family
New Mexico was at the bottom of the list again this year, while Massachusetts was named the best state to raise a family, followed by Minnesota and New Hampshire.
Not helping New Mexico's case is having the highest unemployment rate in the country (6.1 percent), high child care costs, the state's violent crime rate and the percentage of families living in poverty. New Mexico had the second-highest rate of violent crimes per capita and the second-highest percentage of families living in poverty. New Mexico's median household income is $45,674 and 36.2 percent of children under the age of 5 in New Mexico live in poverty, according to the U.S. Census. Violent crime in the state rose by 6.8 percent between 2015 and 2016, according to the FBI.
Senate approves guardianship reform
The New Mexico Senate on Wednesday approved a two-pronged measure to provide “immediate relief” to those who have struggled for years with the abuses of a closed legal guardianship/conservator system, while creating the framework for a comprehensive system overhaul by 2020. Under the measure approved Wednesday, court hearings that are now closed would be open to the public as of July 1. Family members would have more access to guardianship records and visitation wouldn’t be as easily thwarted by commercial guardians, who also have been accused in some cases of profligate spending and excessive fees. Nonfamily conservators would have to post bonds in case financial impropriety occurred.
Adelante Now Foundation’s overall mission is to help improve education in the state of New Mexico. For over a decade Adelante Now funded tutoring in a few Rio Grande valley public schools. The tutoring was directed at elementary school children who were not reading at grade level or who were not grasping the elements of math. The tutoring program was rewarding to most of the tutored children – and to us. Yet, each year we were reminded that there are many more fundamental problems with New Mexico’s education system than our tutoring program was capable of remedying. We found that the problems are often circular in nature and often have unexpected causations.
Education problems in the state often are affected by family problems. Family problems often are connected to the lack of job availability. The lack job availability arises from the lack of sufficient job creation in the state. The lack of sufficient job creation arises from multiple problems including the lack of a sufficiently educated workforce to support broad job creation. Again, the problems appear to us often to be circular in nature.
We asked, “Would it be possible to devise a long term plan to move New Mexico away from many of these problems? Could a plan be devised that would improve educational outcomes in the state, improve job creation in the state, and strengthen families in the state?
Our new mission is to answer these questions. We started our new mission in 2015 by contracting with the Bureau of Business and Economic Research at the University of New Mexico to compare job creation in New Mexico with job creation in surrounding states. This was step one. Now for step two.