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Thursday, October 06, 2005
Governor's Request Is Worrisome, Oil Industry Says
By Deborah Baker/
Associated Press
SANTA FE — Gov. Bill Richardson's bid to get the oil and gas industry to give the state $50 million to pass along to consumers sets a worrisome precedent, an industry spokesman said Thursday.
Bob Gallagher, president of the New Mexico Oil and Gas Association, said producers are "in a state of disbelief'' over the governor's request.
Richardson has proposed $100 million in state spending to help residents cope with high gasoline and home heating prices.
Oil and gas producers should kick in another $50 million to expand the relief further, the governor has said.
Gallagher said all New Mexico industries should find that an alarming signal that "when an industry does well, the state will expect a direct contribution.''
Richardson has been complaining that he hasn't had any formal response from the industry to the proposal he made two weeks ago. Gallagher said he has sent the association's member companies a copy of a letter Richardson sent him last week.
The governor, in the letter, cited "the unprecedented, in some cases almost incomprehensible, profits being recorded by the industry.''
The selling prices of energy products "seem to bear no relation whatsoever to the cost of production and have reached such levels that they seriously threaten the economic, and in some cases physical, livelihood of consumers,'' wrote Richardson, who was U.S. energy secretary during the Clinton administration.
New Mexico offered "substantial tax relief'' to the industry when prices were low in the late 1990s, and "the industry should be there for them now when the people are suffering,'' Richardson said.
In the special legislative session that began Thursday, the governor is asking lawmakers to endorse a plan to spend $75 million to provide rebates of between $50 and $200 to all taxpayers, and another $20 million to beef up a program that helps low-income residents pay heating bills.
"It's going to be an expensive winter,'' Public Service Company of New Mexico spokeswoman Mary Homan told lawmakers Thursday in presentations to the Senate and House.
Because of high natural gas prices, the average monthly home heating bill this winter will be $157, up from $99 last winter, she said.
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