New Mexico's $72B Bet on Clean Energy
Lessons from the state using yesterday's energy windfall to fund tomorrow's.
New Mexico is the second largest crude oil-producing state in the U.S., after Texas. Fracking royalties have ballooned its sovereign wealth fund from $18 billion to $72 billion in less than a decade. That fund now covers roughly 25% of the state budget, funding universal free childcare, free college and trade programs, and breaking generational poverty cycles that go back centuries. And the same fund is now deploying capital into fusion energy, geothermal power, and the next generation of clean energy companies.
The stakes are existential. Bruce Brown, Head of Strategic Climate Initiatives at the New Mexico State Investment Council (SIC), puts it plainly: the present value of the state's oil and gas royalty inflows through 2050 is worth roughly $125 billion under current conditions. But if the energy transition accelerates, that number drops to $10 billion. We know there’s no stopping the inevitable shift to infinite, clean power, so offsetting that gap is exactly what Bruce’s fund is trying to do. SIC invests the wealth from the old energy economy into building the new one.
If there's a transition to clean energy, we want to be part of that. We want to have an industry in New Mexico that takes advantage of that… it's just good economic sense. - Bruce Brown, NM SIC
Rob Black, Cabinet Secretary of the New Mexico Economic Development Department, describes the state’s approach to attracting and supporting clean energy companies as “white glove service” with direct access to decision makers, hands-on support with permitting, site selection, workforce and infrastructure, plus a government that sees itself as a partner in company growth.
The bet is already paying off. In the last 18 months, companies building some of the most ambitious energy infrastructure in the world have chosen New Mexico as home.
Proof of New Mexico’s growing innovation economy is in our portfolio. Pacific Fusion is building the world’s largest pulse-power facility in the state. Last fall, the company announced that they selected Albuquerque as the site for its first Research and Manufacturing Campus.
"We were able to get entitlements done in about four months on our site and get all of our incentives actioned by the end of last year, and now we're off to the races." — Carrie Von Muench of Pacific Fusion
A similar entry point made New Mexico the obvious place for Carl Hoiland of Zanskar to prove out his company’s geothermal discovery technology at scale. Six years ago, Zanskar deployed sensors in New Mexico, and their data indicated a massive resource beneath a struggling geothermal plant. When the plant came up for sale, Zanskar bought it. Today, it’s the most productive pumped geothermal well in the country. Carl emphasized:
New Mexico more than any other state we're working with is kind of acting like a startup, trying all these new ideas, innovating, moving quickly.
Both Carrie and Carl point to the same reason for moving operations to New Mexico: the state gets out of the way and helps you move fast.
But the returns New Mexico is chasing aren't only financial. In 2018, the state ranked 50th in family income and 50th in child poverty. Today, it ranks first in family income growth, funded in large part by the same oil and gas royalties now being redirected into fusion, geothermal, and clean energy ventures. The energy transition, for New Mexico, is a generational opportunity to finish what the windfall started.
Listen to the latest episode of Inevitable or watch the live taping below to learn more.
🎥 The Lean Back
Watch the full conversation exploring New Mexico’s growing innovation economy.
🎙️ Inevitable Podcast
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👩💻 Climate Jobs
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