NEW MEXICO (KRQE) – President Biden’s 60-day halt of oil and gas leasing and permits is drawing mixed reactions from industry leaders and lawmakers in New Mexico, whose economy heavily relies on the industry. About half of the state’s oil production and about 60% of its gas production are done on federal land, according to the state’s Legislative Finance Committee. There are real concerns that if the moratorium is extended, it will hurt New Mexico’s bottom line.
“If we don’t have the money coming in from the oil and gas industry…we’re going to be in a bind,” said Commissioner Ernie Carlson, Eddy County Commissioner. Industry leader, Ryan Flynn, also expressed concern.
“We understand the need to hold off on making any major policy decisions why he gets his people in place at the agency. But this, this order really is so broad that it takes away a lot of routine, administrative decisions that are made by the subject matter experts in the field offices every single day,” Ryan Flynn, President of the New Mexico Oil and Gas Association said.
“Sixty days in the scheme of things…what it means is those applications and permits that are in for approval right now aren’t going to get approved. So that will put a 60-day delay on that. But if that, that delay is perpetuated and sustained, then you’re going to see people leave with their money,” Allen Davis, Eddy County Manager, said.
The impact of the 60-day pause is unclear, but if it were to become permanent, the American Petroleum Institute estimates New Mexico would lose about 62,000 jobs by 2022 and about a billion dollars would be at risk. Eddy County is one of the state’s leaders in oil and gas production, the county manager said 60% of its land is federal land.
“The companies had planned on drilling in Eddy County, south Eddy County, are now, they’re going to just pick up move 7 to 10 miles across the state line and drill in Texas,” Commissioner Carlson said. “Where are you going to get the money to replace those funds? What are you going to do with the teachers? Are you going to ask the teachers in the state of New Mexico to take a pay cut?”
Commissioner Carlson also pointed to a recent study revealing how much oil and gas produced in Eddy County contributes to the state’s economy. Representative Yvette Herrell is also speaking out against the move, writing a letter to Governor Michelle Lujan Grisham urging her to ask Pres. Biden to reconsider. The Ute Tribe, which has some land in New Mexico, wrote a letter to the Department of Interior saying the halt violates their sovereign rights and hinders them from supporting themselves.
Some state Democrats are supporting the Administration’s order, urging the need to re-evaluate dependence on oil and gas and address climate change. In a statement, Senator Ben Ray Lujan said:
For four years, the Trump administration pursued an oil and gas leasing policy that threatened some of America’s most precious landscapes and sacred sites. In response, President Biden has taken the reasonable step of pausing new leasing for 60 days to conduct a targeted review of the federal oil and gas program and chart a path forward.
As this examination takes place, it’s important to me that New Mexicans’ voices are heard and the administration listens to their perspectives, including safeguarding our sacred sites and special places like Chaco Canyon and building economic opportunities.
The science is clear: failing to act on climate threatens our national security, our economy, and our way of life in New Mexico. I will work in the Senate to take decisive action on behalf of New Mexicans.”Sen. Ben Ray Lujan
In a statement, Representative Teresa Leger Fernandez said:
“The Trump administration abused New Mexico’s public and sacred lands for short term corporate profit. Now, we must assess how we can best protect our nation’s most treasured lands and resources for generations to come. I support the Administration’s bold actions, and look forward to working with my colleagues to transition to a vibrant, green energy future for New Mexico and our planet.
But Flynn said the pause may have the opposite environmental impact. He said it could lead to more burning of gas, or flaring, and vehicle emissions.
“What we want to do is capture all of that gas and then try and resell it. If you can’t capture, if you don’t have a pipe that you can connect to, you have lots of pressure coming up, you have to manage that gas somehow. And so what operators will do is they will flare the gas,” he said. “If you’ve already been given a permit, those wells have been drilled. Now, if you’re not allowed to connect to a pipeline, you’ll have trucks moving the oil around and you’ll have more flaring occurring at the wellhead.”
Flynn said he’s for taking on climate change but thinks there needs to be a middle ground to also not drive away from the oil and gas industry.
“I think everybody should be moving forward to address climate change,” Flynn said. “There absolutely is a middle ground…President Biden’s going to determine really where that ground is, but I think what our job is to do, is to work with the administration and help educate them about some of the unintended consequences when you take some of these broader approaches. We’re not going to transition away from oil and gas anytime soon. So, as long as these products are still necessary and essential, let’s figure out how to produce them in the most responsible way.”
The President’s order does not impact existing permits. KRQE News 13 also reached out to Representative Deb Haaland for comment on this story but did not hear back. As Pres. Biden’s nominee for Secretary for the Department of Interior, if confirmed, would be running the department in charge of this order.
New Mexico Oil & Gas Association (NMOGA) President Ryan Flynn released the following statement:
“A federal leasing moratorium is effectively a blockade around New Mexico’s economy, impacting our state more than any other in the country. The message to thousands of New Mexico children, teachers, and first responders who rely on our oil and natural gas industry for basic support is absolutely clear: New Mexicans lose and foreign imports win. A moratorium all but guarantees that unemployment will rise, state revenue will fall, and our economy will come to halt. We share the new administration’s commitment to reducing emissions and combating climate change, but we do not make progress by sacrificing New Mexico communities like Carlsbad, Farmington, or Hobbs. New Mexicans are eager to work, and our country and state is best served by keeping their jobs here at home, rather than outsourcing them abroad.”