On the one-year anniversary of the announcement that state government officials in Santa Fe would oversee Sunland Park’s financial transactions, New Mexico Watchdog has learned the price tag for taxpayers is estimated at a quarter-million dollars — and the full-time state employee who has lived in Sunland Park since last summer may need to stay another year.

A QUARTER-MILLION AND COUNTING: The state of New Mexico has had to take over the financial supervision of the border town of Sunland Park after reports of massive mismanagement.

In the wake of arrests in 2012 stemming from a mayoral race that included charges of bribery and video of a stripper, as well as charges — and subsequent convictions — of voter fraud, the DFA sent representatives to Sunland Park to try to sort through the town’s messy financial records after State Auditor Hector Balderas reported instances of widespread financial fraud.

On May 14 of last year, several members of the DFA and other state agencies descended on the town of 18,000 that hugs the borders of Texas and Mexico and froze the city’s bank accounts, changed the signature cards for city checks and put new locks on the filing cabinets. DFA Secretary Tom Clifford suspended city officials and DFA assumed the duties of the town’s finance director.

Then officials sifted through the city’s disorganized and missing financial records.

“I don’t know that I have the words to describe how bad they were,” Gleason said.

A month later, DFA assigned Michael Steininger to physically move to Sunland Park to make sense of those records and act as finance director.

Gleason said Steininger lives out of an RV he owns and travels to his home in Valencia County on weekends to see his family. With salary, expenses and estimated reimbursements to the state auditor’s office, Gleason said taxpayers’ costs to monitor Sunland Park’s finances is “safely $250,000, all told.”

Steininger often works “75-80 hours a week,” Gleason said, and Sunland Park’s financial records are now in good enough shape that on Friday a much-anticipated report will come from the city’s independent public auditor. It will mark the first time in at least two years that Sunland Park has been able to produce audits.

“There is still a lot of data entry that needs to be done to ensure we know how much money they really have,” Gleason said, “but it’s a fairly remarkable improvement in the quality of the records.”

Plenty of work remains

THE KID MAYOR: 25-year-old Javier Perea is working to upend Sunland Park’s political reputation for corruption.

A new, 25-year-old mayor — Javier Perea — has received kudos in his efforts to turn things around since taking over in August.

“It’s a challenge, I don’t deny that,” Perea told New Mexico Watchdog in a telephone interview. “I felt a duty as a citizen of this city to try to change things.”

A graduate of New Mexico State with a degree in business administration, Perea is a getting an unofficial doctorate in business and government management every day he comes to city hall, where he often works side-by-side with Steininger.

“We get along well,” Perea said. “We’ll think things through together. I keep him in the loop and he keeps me in the loop.”

Perea and Gleason emphasized that DFA does not dictate financial decisions for Sunland Park.

“If they want to pave a road, let’s say, that’s up to the city council to decide,” Gleason said. “We simply tell them that whatever you decide, make sure you follow the procurement code, make sure you have the money, make sure you follow the correct procedure.”

Some members of the city council have grumbled about DFA oversight, Perea said, but generally, city officials approve.

“They’ve been beneficial,” Perea said. “I think things would have proceeded much slower (without DFA). They’ve been a great asset.”

In the overall scheme of a New Mexico state budget of nearly $6 billion, the expenses in the past year in Sunland Park is a drop in the bucket, but Gleason and Perea acknowledge that, for taxpayers, $250,000 is real money.

“It’s in everybody’s best interests that we get this cleaned up as quickly as we can and get Sunland Park back to running Sunland Park,” Gleason said.

“I know that people outside of Sunland Park would say, ‘the city got itself into this,’ ” Perea said. “But there are a lot of good people here who want to do good work. We want to change things. Be patient with us.”

***

A review of some of the recent Sunland Park scandals:

*In August 2011, then-mayor Martin Resendiz admitted in a deposition that he was drunk when he signed nine contracts with a California firm that’s suing the border town. The story prompted jokes from George Lopez on national television.

*In February 2012, extortion charges were filed against a mayoral candidate who allegedly tried to blackmail an opponent who was shown receiving a lap dance from a topless woman on videotape. Daniel Salinas — the alleged extortion guy — defeated Gerardo Hernandez — the lap dance guy — in city elections but could not assume office because the charges against him stipulated that he could not step foot into city hall.

*Later in 2012, Salinas and city manager Jaime Aguilera entered the equivalent of not guilty pleas to extortion charges.

*In May 2012, State Auditor Hector Balderas said his office confirmed that Salinas spent more than $42,000 from the city’s Border Crossing Fund to “pay for prostitutes for Salinas and the City’s former public information officer, Arturo Alba, during a trip to Mexico.”

*In March, former city employee Silvia Gomez admitted to multiple charges of voter fraud for inducing non-residents to vote in the 2012 Sunland Park elections, which were marred by allegations of voter tampering.

*At the most recent count, at least five Sunland Park officials have entered plea bargains while at least five others — including former Mayor Pro Tem Salinas, who faces 29 counts including extortion and conspiracy — are still awaiting trial.

***

Here are excerpts of New Mexico Watchdog’s interview with Ryan Gleason of the Department of Finance and Administration:

Contact Rob Nikolewski at rob@nmwatchdog.org and follow him on Twitter @robnikolewski

TAKING ON THE TAX MAN: An estimated 130 protesters gathered in front of the Albuquerque office of the Internal Revenue Service, protesting the agency’s targeting of conservative groups. Photo by James R. Scarantino

Angry at disclosures that the Internal Revenue Service has admitted targeting Tea Party groups and conservative organizations, an estimated 130 protesters gathered at the IRS office in Albuquerque during the lunch hour on Tuesday (May 21).

A number of the protesters were members of the Albuquerque and Rio Rancho Tea Parties and a line covered the block along Montgomery Blvd., spilling onto the adjacent block while some stood in the median and across street.

The protest was part of a loosely organized response from conservatives across the country who gathered in front of a number IRS buildings, including Washington D.C., Atlanta, Kansas City, Denver and Houston.

On Capitol Hill Tuesday, former IRS chief Douglas Shulman, who vacated his position last November, told the Senate Finance Committee he didn’t learn details about giving extra scrutiny to tea party and other conservative groups seeking tax-exempt status until he read last week’s report by a Treasury inspector general.

When pressed on how the targeting could have occurred in the first place, Shulman said, “Mr. Chairman, I can’t say. I can’t say that I know that answer.”

As first reported by New Mexico Watchdog, the Albuquerque Tea Party has been one of the organizations that has seen its application for non-profit 501(c)4 status delayed by the IRS. Rick Harbaugh, the president of the Albuquerque Tea Party, says his organization has been wrangling with the IRS for nearly four years.

Two more protesters in front of the Albuquerque IRS office, 5/21/13

“The abuses we saw was in the sheer volume of stuff they were demanding … that’s harassment,” said Harbaugh, who attended Tuesday’s protest. “We asked a number of CPAs who have experience with this if this was typical. By and large, they said, ‘this is crazy.’ ”

Harbaugh said the Albuquerque Tea Party has sent the IRS “20 inches of documentation” in response to questions.

In a odd twist, New Mexico Watchdog learned that the IRS ended up asking about an 83-year-old great-grandmother and Albuquerque resident who spent four years in a World War II internment camp. Click here to read that story.

In the meantime, a conservative legal firm — the American Center for Law and Justice – is representing the Albuquerque Tea Party and 26 other organizations, demanding that the IRS grant them the non-profit status.

“Regardless of whether the IRS complies, we are still planning on a filing a lawsuit,” ACLJ spokesman Gene Kapp told New Mexico Watchdog, citing what Kapp said was the agency’s “abhorrent and unconstitutional conduct.”

Harbaugh said the Albuquerque Tea Party’s board will meet later this month to decide whether it will join in the lawsuit.

“How would you feel if the IRS was sending you letters saying they’re looking over your shoulder every minute,” Harbaugh asked. “It affects potential donors … who wants to donate if they fear that in the back of their minds the IRS is looking at you?”

STILL AT 60% OR MORE: Another poll has come out showing Gov. Susana Martinez with high approval ratings. Photo courtesy of the Governor’s Office.

Gov. Susana Martinez seems to have kept her approval-ratings winning streak intact.

In a poll released by KOB-TV in conjunction with the polling outfit Survey USA, 66 percent of New Mexicans are happy with the job she is doing.

For nearly a year and a half, the Republican governor — the first Hispanic female governor of any party in the U.S. — has finished with approval ratings above the 60 percent mark in a series of different polls.

In the KOB/Survey USA poll released Monday (May 20), 62 percent of men and 70 percent of women gave Martinez favorable marks and 64 percent of independent voters and even 44 percent of Democrats surveyed are pleased with her job performance.

Martinez will run for a second term in November of 2014. So far, the only Democrats to announce that they’ll run against Martinez are Attorney General Gary King and state Sen. Linda Lopez. State Sen. Tim Keller has said he’s considering running for governor or state auditor. Keller recently told New Mexico Watchdog he’ll make a decision at the end of this month.

KOB/Survey USA also released a poll on the upcoming mayoral race in Albuquerque.

Mayor Richard Berry received 59 percent, compared to 17 percent for Pete Dinelli and and 9 percent for Paul Heh with 15 percent undecided.

The mayoral election will be held this coming October.

Here’s the KOB-TV story on the poll numbers for the mayor’s race:

THE FOOTBALL FIGHT: Some are calling for scaling back of the NMSU football program. Photo courtesy of New Mexico State sports.

The New Mexico State football team hasn’t played in a bowl game since 1960.

The Aggies haven’t fielded a team with a winning record since 2002 and attendance has slipped.

Now the hottest debate on the Las Cruces campus is whether the football team should keep playing at the college football’s highest level , consider going down a step or even be abolished altogether.

From the Albuquerque Journal on Monday (May 20):

LAS CRUCES – Members of the New Mexico State University community are pushing back against Regents Chairman Mike Cheney’s public exhortation that Aggies support athletics, in particular the long-struggling football program.

A petition on the website change.org urges the five-member Board of Regents to “stop diverting funds from academics to support failing athletics programs.” The petition, launched last Monday, had been signed by more than 300 people, including alumni and current students, by Friday.

Earlier this month before he was selected as NMSU’s new president, Garrey Carruthers floated the idea of having the Aggies moved down a notch to the Big Sky Conference.

“They’re not eligible for BCS bowls,” Carruthers told the Las Cruces Sun-News. “But what do you think our prospects of getting (to) a BCS bowl anytime soon will be anyway? Not great. I think there’s some other conferences around, where our athletics budget would actually be at the top of the list instead of at the bottom in terms of how much money we’re spending.”

In the meantime, the Aggies will play this coming season as an independent – after the Western Athletic Conference essentially imploded as a football conference — and in 2014 will play in the Sun Belt Conference.

That included an 83-year-old great-grandmother who was once held in a World War II internment camp, New Mexico Watchdog has discovered.

THE IRS IS WATCHING: In its investigation of the Albuquerque Tea Party, the Internal Revenue Service wanted more information about this 83-year-old retiree.

According to a review of documents conducted by the online news organization Politico, (in a story headlined “The IRS wants YOU — to share everything”), the IRS asked the Albuquerque Tea Party about connections to other groups, including “Marianne Chiffelle’s Breakfasts.”

That prompted us to do some digging.

It took New Mexico Watchdog less than an hour to learn that “Marianne Chiffelle’s Breakfasts” is not some restaurant chain, but a reference to the volunteer work of Chiffelle, a retiree who helps organize informal 9 a.m. meetings for members of the Bernalillo County Republican Party.

The group meets on Fridays at the Golden Corral restaurant at the corner of Eubank and Central.

“We’ve had these meetings for a long time,” Chiffelle said. “It’s not a business.”

Chiffelle is a naturalized American citizen who was born in what was then called the Dutch East Indies, now known as Indonesia. Her father was an executive for Shell Oil and when World War II broke out Chiffelle was sent to a Japanese internment camp between the ages of 12 to 16.

After the war, she moved to the Netherlands and in 1960 she and her late husband immigrated to the United States.

BETWEEN THE LINES: A page from the coloring book the Children’s Freedom Scholarship Fund hands out to kids in Albuquerque.

Since living in Albuquerque, Chiffelle has been active in GOP politics and conservative causes. She helped establish the Children’s Freedom Scholarship Fund, which hands out patriotic coloring books to youngsters in the Albuquerque area.

“The kids don’t have any idea, they think freedom is just there for the taking,” Chiffelle said.

The book includes pictures of U.S. presidents and puzzles for kids to learn about U.S. history, as well as essays such as “What Does Freedom Mean to You?”

New Mexico Watchdog obtained a copy of the coloring book and found nothing advocating for certain political parties or organizations.

Recent entries on Chiffelle’s Facebook page include a link to a call for cuts in salaries to members of Congress, the vice president and president, as well as a petition to send a sympathy card to those affected by the killings at Sandy Hook Elementary School.

While no fan of the Obama administration, Chiffelle says she is no pitchfork-wielding, anti-government type.

“The fact itself that you have to pay tax(es) to the government is okay,” she said. “But the way they interpret it and you how many rules there are, that’s wrong.”

The IRS is embroiled in a national scandal after revealing that it has targeted tea party and conservative groups for extra scrutiny when they applied for non-profit, 501(c)4 status. The Albuquerque Tea Party is one of the organizations that’s been wrangling with the IRS since 2009.

“They (the IRS) have a job to do, I understand that,” Albuquerque Tea Party president Rick Harbaugh told New Mexico Watchdog. “I think they overstepped that a lot.” Clarification: Some readers have asked how the IRS got the phrase “Marianne Chiffelle Breakfasts” in the first place. Harbaugh says his group gave the IRS the name after the agency asked them to disclose all connections to political entities.

The Politico story mentioned the IRS also wanted the Albuquerque Tea Party to supply more information about a group called Conspiracy Brews.

An internet search revealed that Conspiracy Brews is a weekly meeting of Albuquerque political types that was founded by Janice Arnold-Jones — a former Republican nominee for Congress, member of the state legislature and current Albuquerque City Council member.

“It’s just a discussion group,” Arnold-Jones said. “When the group named itself it was done in the interests of a conspiracy for good government…it leans conservative but it’s an interesting mix of people. Our only rule is, when people speak you have to listen.”

“I attended just one meeting,” Harbaugh said.

The website design for Conspiracy Brews is simple and New Mexico Watchdog found no anti-government rhetoric on the site.

Arnold-Jones said she does not lead the group and it’s “not a taxable entity of any sort.”

New Mexico Watchdog counted 25 attendees at the group’s weekly Saturday meeting — including Chiffelle, who is a regular.

The Politico story mentioning Conspiracy Brews and Chiffelle prompted some jokes but also some serious discussion.

“The part I’m not delighted about,” Arnold-Jones said, “is the fact that the IRS is picking and choosing (whom to investigate) … I think this is an incredible erosion of trust.”

As for Chiffelle, having her name mentioned as part of the IRS investigation has drawn more attention than she’s accustomed to but she seemed genuinely unperturbed.

“Don’t cut me short,” Chiffelle said. “I was a prisoner of war in the second world war. If the Japanese couldn’t kill me, no one else can. That’s my philosophy. If something is unfair, I will fight to the death…Nothing upsets me. But I’ll do something about it.”

Here’s our interview with Chiffelle:

A New Mexico Watchdog investigation into schools of higher education in the state shows that in an 11-year period, spending for services associated with running a university has almost uniformly risen much faster than spending on education and academics in general.

Here’s what we found after looking at spending at New Mexico’s six public universities, using figures that schools across the country give to the U.S. Department of Education through its data system (Integrated Postsecondary Education Data System or IPEDS), that goes back to the 2000-2001 academic year:

Generally speaking, standard expense categories across the country define “institutional support” as administrative services, executive management, legal and fiscal operations, public relations, etc. Academic support is commonly associated with classwork, libraries, etc. and instruction generally refers to activities directly related to instruction including faculty salaries and benefits, office supplies and administration of academic departments.

With the exception of Western New Mexico University and Eastern New Mexico University, “institutional support” saw the greatest growth, with New Mexico Tech seeing a 107.8 percent increase in little more than a decade while academic support actually saw a decrease at Tech during that time frame.

THE SPENDING BATTLE: A New Mexico Watchdog investigation shows most universities in the state are spending more on institutional support than academic support.

Another interesting wrinkle is that back in 2000-01, academic spending and institutional spending at the two largest universities in the state (the University of New Mexico and New Mexico State) were just about identical but in the succeeding years institutional spending rose 99.8 percent at UNM and 78.5 percent at NMSU compared to 56.7 percent in academic spending at UNM and 69.2 percent at NMSU. (You can see the year-to-year breakdown of all six schools at the bottom of this story.)

The figures don’t come as a surprise to Jonathan Robe, a research fellow at the Center for College Affordability and Productivity, which takes a critical look at what the D.C.-based organization calls “the rising costs and stagnant efficiency in higher education.”

“Some of these numbers (in New Mexico) are in line with national numbers,” Robe said, citing a recent paper showing that for every dollar public research universities in the U.S. spend on what’s called involuntary spending, they spend $2 on voluntary spending.

“A lot of this is going to support administrative staff and salaries rather than education and that may give the public pause,” Robe said.

New Mexico Watchdog e-mailed all six universities for comment and received responses from officials UNM and NMSU.

The senior vice president for administration and finance at NMSU, Angela Throneberry, said the IPEDS finance survey changed between 2001 and 2011 so “making any direct comparison between the two periods (is) inaccurate” and that NMSU’s “allocation of Instruction and General expenditures by function has actually remained fairly consistent over the last 10 years.”

A spokesperson for UNM pointed to data the New Mexico Council of University President’s “Performance Effectiveness Plan” showing that UNM is below peers on administrative costs – 5.8 percent of budget compared to 8.1 percent.

UNM Regent Bradley Hosmer said in an e-mail that “The three categories used in IPEDS are not carefully defined” and that “significant sums can be moved from one category to another inadvertently.”

In fact, New Mexico Watchdog originally tried to simply look at whether there had been a significant increase in the number of administrators at New Mexico universities in recent years but the numbers within individual schools fluctuated — sometimes wildly — from year to year.

Robe conducted a quick search for New Mexico Watchdog at UNM, NMSU and New Mexico Highlands since 1993 and came back with numbers that varied so much from year to year that the whole dataset for judging who is defined as a full-time executive was called into question:

“The problem with tracking administrators,” Robe said, “is that their positions are defined by what the institutions want to say it is.”

The numbers are so mushy that the new president of the University of Minnesota made headlines six months ago when, after pledging to cut administrative overhead, he learned his own school officials couldn’t tell him how much money it takes to run the school.

“The more questions I asked, the less happy I was,” Dr. Eric Kaler told the Wall Street Journal, which discovered through its own investigation that the University of Minnesota system had added more than 1,000 administrators since 2001.

UNM’s Hosmer echoed the sentiments about the shifting numbers in a brief interview during a recent Board of Regents meeting about the NM Watchdog investigation.

“You gotta get down below those labels,” Hosmer said, adding that “we don’t know how carefully (the IPEDS numbers) are monitored.”

Update 5/23: UNM director communication Dianne Anderson sent New Mexico Watchdog a chart composed by the Wall Street Journal of administrative costs at 72 public universities with high research activity. It showed that UNM scored at 5 percent in 2010-2011 in administrative spending as to the total percent spent per student — putting it on the lower end of the schools surveyed: http://graphics.wsj.com/documents/NONCLASS1212/

The tug-of-war on institutional vs. academic spending comes at a time when college tuitions keep rising, student debt is spiraling and critics are questioning whether universities have lost sight of their ultimate mission – and in some cases, wondering if college is even the right choice for some students.

“It really isn’t the cost of college,” said Dr. Richard Vedder, who heads the Center for College Affordability and Productivity. “It’s the cost relative to what you’re getting out of it. The data still show the incomes of people who go to college exceeds those of people who have just a high school education but we are finding a growing part of our labor force who go to college and are ending up unable to get jobs in professional, technical and managerial levels.”

Last month, another New Mexico Watchdog investigation showed IPEDS data revealing that tuition had increased between 87.8 percent to 169 percent at the state’s six public universities since the 1999-2000 school year.

A longtime professor at Johns Hopkins, Benjamin Ginsberg, has written a book called “The Fall of The Faculty,” that decries what he says is rampant growth of the number of administrators at the nation’s universities and former U.S. Secretary of Education William Bennett just published his own book, bluntly entitled “Is College Worth It?” that charges that “most of higher education fails most students.”

It’s selling so briskly that at the time of this story, the book is temporarily out of stock on Amazon.com.

Others have criticized what they say is unnecessarily luxurious facilities on college campuses while just this week, The Chronicle of Higher Education reported the median salary of public university presidents rose 4.7 percent in 2011-12 to more than $440,000 a year.

“More people from different political perspectives — anywhere from the Tea Parties to Occupy Wall Street — are talking about colleges and universities,” Robe said. “Colleges get revenue for federal aid but who gets stuck? … The spending increases may be justifiable but I think the public would like to see leaders make the case more transparently, rather than vague explanations that ‘education is important.’ ”

Hosmer cautions against making comparisons between one New Mexico university and another. “NM Tech competes with a somewhat different peer group (than UNM),” he said in an e-mail, “as does NMSU and others.”

But after going over some of the numbers with New Mexico Watchdog at the UNM Board of Regents meeting, Hosmer said, “You’re asking very good questions.”

****

Here’s the breakdown among the six New Mexico schools in the research New Mexico Watchdog conducted:

According to the Associated Press, new Interior secretary Sally Jewell and the Obama administration announced Thursday (May 16) that companies that drill for oil and natural gas on federal lands will be required to disclose publicly the chemicals used in fracking operations.

Not surprisingly, oil and gas producers complained about the ruling, saying it’s unnecessary.

But at least one environmental group complained too, saying the decision is a watered-down version of an earlier proposal.

“It is clear what happened: the Bureau of Land Management caved to the wealthy and powerful oil and gas industry and left the public to fend for itself,” Jessica Ennis, a spokeswoman for the environmental group Earthjustice told AP.

A big reason for the complaint from environmentalists hinges on the ruling calling for disclosure of chemicals to go to a group called FracFocus, a voluntary site where companies self-report.

Critics say FracFocus allows companies to avoid disclosure by declaring certain chemicals trade secrets and point to a report by Harvard Law School last month that asserted the site is plagued by loopholes.

An official with Interior said if problems arise with FracFocus the federal government will make changes.

Jewell called the ruling a “common-sense update” that increases safety, adding, ”As we continue to offer millions of acres of America’s public lands for oil and gas development, it is important that the public has full confidence that the right safety and environmental protections are in place.”

According to the Interior Department, domestic production from more than 92,000 oil and gas wells on public lands accounts for about 13 percent of the nation’s natural gas production and 5 percent of U.S. oil production.

In an Interior report last year, oil and gas activity on BLM-managed lands in New Mexico was linked to 47,807 direct jobs and $10.9 billion in direct output.

Click here to read the entire AP story.

Among the findings?

*Some 62 percent of adults in New Mexico were overweight or obese in 2009, and

*New Mexico’s percentage of its population over the age of 60 is already higher than the national average and will get higher in the next 17 years. By 2030 one-third of the state’s population will be aged 60 or higher. Here’s the graphic:

For years, New Mexico has had a shortage of doctors, dentists and nurses and with an aging and increasingly overweight population — not to mention the uncertainty of the Affordable Care Act, (“Obamacare”) which kicks in next year — “the state can expect even greater healthcare access problems,” the LFC report said.

That means longer wait times.

The report calls for “a more coordinated approach to healthcare service delivery.”

Here’s the link to the report:

http://www.nmlegis.gov/lcs/lfc/lfcdocs/perfaudit/Department%20of%20Health%20and%20Allied%20Agencies%20%E2%80%93%20Adequacy%20of%20New%20Mexico%E2%80%99s%20Healthcare%20Systems%20Workforce.pdf

But whether it will ever get across the Pacific Ocean is an open question.

An executive for Japan’s state-run energy corporation has been touring of New Mexico natural gas facilities this week and met on Monday (May 13) with Lt. Governor John Sanchez to discuss establishing a trade agreement between the U.S. and Japan that would include acquiring natural gas from New Mexico.

LET’S MAKE A DEAL: Japanese energy executive Hidehiro Muramatsu (left) talks to Lt. Governor John Sanchez about a proposed trade deal that would send New Mexico natural gas to Japan. New Mexico Watchdog photo.

“We are searching for liquefied natural gas,” Hidehiro Muramatsu of the Japan Oil, Gas and Metals National Corporation told New Mexico Watchdog during a reception with oil and gas executives. “In my opinion, it’s a pragmatic and practical way to transport natural gas from the state of New Mexico.”

As first reported by New Mexico Watchdog, Japan is actively searching for less expensive energy sources and considers New Mexico’s rich supplies of natural gas as a potential solution.

In the wake of the 2011 Fukushima disaster, Japan has virtually shut down its nuclear facilities. Muramatsu said only two of the country’s 49 reactors have restarted and Japan has shifted to natural gas to satisfy its energy needs.

But the price of natural gas in Japan is four times more expensive than natural gas in North America.

That’s why Japanese officials want to invest billions to ship gas overseas and are looking at the United States, Canada and Mexico as potential trade partners to supply an estimated 400,000 tons of natural gas per year.

New Mexico’s San Juan Basin and the Permian Basin have plenty of natural gas and low prices in the U.S. in recent years have soured the economies in the regions. A boost in production could be a game-changer.

“It’s a win-win situation,” James Manatt Jr. of Thrust Energy in Roswell said. “Japan needs natural gas and New Mexico has it.”

An increase in natural gas production wouldn’t just help the state’s energy companies but would translate into a boon for New Mexico’s state government revenues.

Taxes on oil and gas revenues make up a big chunk of the state’s general fund and New Mexico gets more bang for its energy buck from natural gas. It’s estimated that a $1 increase in the price per barrel of oil translates into about $4 million to the state’s general fund but a 10-cent increase in the price per thousand cubic feet of natural gas translates into $10 million extra into New Mexico’s coffers.

“This deal has the potential to increase New Mexico’s economic base,” Sanchez said. “Let’s look for new markets.”

But there are obstacles, both logistical and political.

LNG TANKER: In order to ship natural gas overseas, it has to be liquefied and then transported by tanker ship. Courtesy JapanFocus.

First, in order to ship natural gas overseas, it has to liquefied and while there are facilities in Texas and Louisiana that do that, a facility on the West Coast is preferable.

But getting an LNG facility built in California is an iffy proposition.

“It’s very difficult to construct a new factory in the state of California,” said Muramatsu. “The environmental regulations are very stringent.”

“There’s not a lot of delivery infrastructure in Washington (state) or Oregon compared to California,” Manatt said. “So will California stand in the way? Can California stand in the way? Will the Obama administration — and I’m not making a political statement — but will they say to California, this is the for the benefit of all the American people, New Mexico included, and we’re going to allow for the development of an LNG export facility on federal lands on the west coast of California?”

The U.S. has competition for the lucrative Japanese natural gas market.

Canada is considering constructing an LNG facility on the coast of British Columbia. Last month, Japanese officials took part in an energy forum with Canadian producers and political leaders.

Japan is also in discussions with the Mexican government.

“There are a number of potential LNG terminals in Mexico,” said Manatt.

Second, a potential U.S. natural gas deal with Japan would entail getting the federal government to approve a free trade agreement with Japan.

And a number of U.S. corporations such as Dow Chemical are opposed to a natural gas deal because it would drive up domestic natural gas prices. Critics say Dow and the other companies want to block a potential deal because, as big consumers of natural gas, their costs will go up.

Then there are environmentalists, who are opposed to increasing natural gas production in the U.S. because more production means more hydraulic fracturing (“fracking”), which they say could endanger ground water.

“We are so against this,” Eleanor Bravo of Food and Water Watch – New Mexico said last month. “This will mean more fracking — you can’t get around it … Shipping this stuff across the ocean increases our carbon footprint … and it delays our instituting of renewables.”

But both of New Mexico’s members in the U.S. Senate – Tom Udall and Martin Heinrich – who have strong ties with environmental groups — have told New Mexico Watchdog they approve of a natural gas deal with Japan.

“I think it’s good for New Mexico,” Sen. Udall said last week from his Washington D.C. office.

Muramatsu says he estimates that Japan will start importing natural gas from North America by 2017.

Which country will win the race for Japan is the billion-dollar question.

Contact Rob Nikolewski at rob@nmwatchdog.org and reach him on Twitter at @nmwatchdog

Then, it was Democratic U.S. Sen. Tom Udall.

Now, Democratic U.S. House of Representatives member Ben Ray Luján is complaining about the Obama administration’s 5.1 percent reduction for states who get mineral and energy royalties from the federal government.

MINERAL ROYALTIES CONTROVERSY: New Mexico congressman Ben Ray Lujan has joined the fight against the Obama administration’s decision to cut state mineral and energy royalties.

“The state’s share of these funds is just that – the state’s share – and should not be withheld by the federal government due to sequestration,” Luján said in a statement of the States Mineral Protection Act, which is also sponsored by a number of western representatives that include Republicans, and also calls for eliminating a 2 percent fee that the federal government charges for collection of the royalties.

The House bill is a companion to a Senate version that Udall and two Wyoming Republican senators have introduced.

The Obama administration — working through the Department of the Interior — has imposed the cuts to states that derive royalties from mineral and energy development that occur on federally-leased state lands.

“The sequester is a failed experiment – one that I have been opposed to every step of the way – that is harming New Mexico and should be repealed in full,” Luján said. “But absent a comprehensive solution, Congress should stand up to protect funds that belong to the states and play a vital role in our communities.”

In 2012, New Mexico received about $488 million in mineral and energy extraction royalties from the Mineral Leasing Act and the 5 percent cut translates into a $26 million hit for the state, second only to Wyoming, which is losing $53 million.

The cuts were announced in late March, which prompted howls from a number of governors in western states, including Gov. Martinez who told New Mexico Watchdog on April 5 that her administration is looking into filing a lawsuit to fight the reductions.