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Fed eyes renewable energy projects

Feb 23, 2009- McClatchy-Tribune Regional News - James Monteleone - The Daily Times

The federal stimulus bill is anticipated to steer $43 billion in nationwide investments into a yearling renewable energy industry, but the slumped oil and gas industry likely will be left out.

New Mexico is anticipated to receive nearly $32 million to invest in research and development of renewable energy technologies and improving outdated energy transmission infrastructure, according to the U.S. Senate Committee on Appropriations

Funding also will go to improve weatherization of New Mexico homes to improve energy efficiency and reduce heating and cooling costs. More than $30 million is anticipated to be invested for improved weatherization statewide.

Specific funding programs have not been announced by the state Energy, Minerals and Natural Resources Department, so it remains unclear whether new energy programs may target San Juan County, but the outlook for stimulus subsidies to traditional oil and gas producers looks bleak.

"They've laid people off in those jobs because the price of gas dropped precipitously," Sen. Jeff Bingaman, D-N.M., said of the oil and gas industry during a recent interview with The Daily Times. "Their view is we'll leave this gas in the ground until the price gets back. There's nothing in this bill that brings the price of gas back to the levels that some of these folks would like it at."

Bingaman noted that any effort by Congress to drive up the prices of gas and oil during the economic downturn would cause hostile responses from the American public.

But hiking the price of natural gas is not the only thing that can be done to stimulate the oil and gas industry, which is a major contributor to the national economy, New Mexico Oil and Gas Association President Bob Gallagher said.

"As we're developing wind (power) and we're developing solar, which we need to do, we ought to also not forget about what's fueling the engine right now," Gallagher said.

Noting that approximately 18 percent of oil and gas production comes from small business providers, programs such as low-interest loans or production incentives could help keep those producers drilling rather than yielding demand to foreign oil and gas sources, he said.

"I think they missed a great opportunity to stimulate the oil and gas industry, both on-shore and offshore," Gallagher said.

But with the intent of the stimulus funding expressed to be the creation of new jobs, investing in an unestablished regional renewable energy industry could better accomplish that goal, environmental protection advocates said.

The localized funding for renewable energy development could be an excellent asset in San Juan County, where solar and wind power capabilities are ripe to be harvested and developed into a sustainable energy system, said Jeremy Nichols, climate and energy program director for Santa Fe-based WildEarth Guardians.

"There's a great possibility it could directly benefit northwest New Mexico," he said of the stimulus energy program funding. "I think this might be a good opportunity to say, Let's try shifting course.'"

And the change doesn't have to come at the cost of oil and gas industry jobs, he said.

"The bottom line is the fossil fuel industry is very much thriving. It's still active, it's still an important part of sustaining our economy. But we do need to get on track in terms of making that transition and making that shift," Nichols said. "Given the solar and wind resources in northwest New Mexico, I think it's going to be ground zero as far as showing off the potential for making that transition, and doing it in a way that doesn't shut the door on people and families."

The U.S. senator agreed, saying new energy development doesn't mean excluding the needs of the oil and gas industry.

"We've got to find alternatives," Bingaman said. "I don't see the two (industries) as competing with each other. We need to do all we can with oil and gas, but we also need to do all we can in these other areas."

James Monteleone: jmonteleone@daily-times.com