NMSU’s Arrowhead Center awarded $1.2 million to study energy, jobs and water

Oct. 24, 2008 by Justin Bannister NMSU News Center

New Mexico State University’s Arrowhead Center is set to tackle three of the biggest issues in the state – energy, jobs and water. The U.S. Department of Energy awarded a three-year, $1.2 million grant to Arrowhead Center to study connections between fossil fuel production, economic development and water in New Mexico.

“We want to see how fossil fuels benefit the state and what can be done to improve that relationship,” said Meghan Starbuck, an assistant professor of economics at NMSU and the energy economist for the project. “When New Mexico provides more energy, it reduces dependence on foreign fuel and creates jobs in the state.”

Starbuck said New Mexico has the third largest reserves of natural gas in the nation. The state is also a large producer of crude oil, coal bed methane and uranium. She said New Mexico has an opportunity to create wealth and jobs by using its own energy better rather than importing it from other countries.

“New Mexico is rich in natural resources and home of major technological advances over the last century, yet we have a per capita income that’s 20 percent below the national average,” said Jim Peach, co-director of Arrowhead’s policy analysis unit and the energy project’s principal investigator. “The question is, can we do anything about that.”

“Fossil fuel production is an important part of the state economy. In recent years, oil and gas production has accounted for more than 10 percent of New Mexico’s gross domestic product,” Starbuck said. “New Mexico is also an ideal place for wind, solar and biomass production. An important issue is how traditional and new energy sources will shape future economic development in the state.”

Starbuck said she was surprised at the small amount of information that existed in New Mexico about energy and its economic impacts. Students in the newly created Doctorate of Economic Development program, a joint effort between the NMSU College of Business and College of Agriculture and Home Economics, will work with Starbuck and Peach on the project. The hope is to create a centralized location for information to be used by energy companies, environmental entities and state agencies when formulating policy.

“The energy-water connection runs in both directions,” Starbuck said. “Water, often contaminated, is produced as a by-product of oil and gas production. At the same time, it takes a lot of energy to get water to where we need it.”

“In an arid state, these energy and water connections are very important,” Peach said. “Obviously, the issues become even more complex given the current financial and economic crisis and highly volatile energy prices.”

Arrowhead Center is a nonprofit organization owned by NMSU. Its mission is to promote economic development and student engagement in New Mexico. Funding for this project was made possible by New Mexico’s congressional delegation.

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