New Mexico business leaders wary as Biden expected to ban federal oil and gas leasing

President Joe Biden was expected to enact a permanent ban on federal oil and gas leasing this week, days after his administration announced a 60-day halt.

The 60-day pause announced last week applied to new leases for fossil fuel development on federal lands and waters, removing authority to approve such actions from agencies like the Bureau of Land Management under the U.S. Department of Interior (DOI).

Such decisions could only be made by DOI leadership under the suspension enacted by Action Secretary of the Interior Scott de la Vega on Jan. 21.

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If such a move were to be upheld and continue, New Mexico business and fossil fuel industry leaders feared it could be devastating the state’s economy which relies on revenue from oil and gas development to support its economy.

During a Tuesday press conference with the U.S. Chamber of Commerce’s Global Energy Institute and state chamber leaders, Chief Executive Officer of the New Mexico Chamber of Commerce Rob Black said more than half of the state’s oil and gas production occurs on federal land while almost all of Texas’ onshore production is on private land.

He said such a ban would disproportionately impact New Mexico by causing energy companies to move to Texas where they could still operate on private land unaffected by a ban.

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Black argued the ban would not affect pollution but only shift production to other areas.

“Unfortunately, we don’t believe a ban on federal oil and gas leases will reduce carbon emissions,” he said. “What it will do is shift revenue to private landowners in Texas and foreign countries like Saudi Arabia. It would just cause oil and gas production to move just a few miles over the border with Texas or go overseas.”

Even worse, Black worried production would move to other states and foreign countries that have less environmental regulations meaning it could have the opposite affect of its intention to address climate change.

“This will not impact demand for oil. It was will just move where it comes from and who benefits. Production will move to areas with less climate and environmental controls as New Mexico,” he said. “A ban on federal oil and gas leases will not support that effort but undermine it.”

With the passage of the Energy Transition Act at the state level, and New Mexico’s recent efforts to create stricter regulations for methane emissions from extraction operations, Black said the state was already on a path to reduce its impact of climate change without stymying economic development created by oil and gas.

“We can walk and chew gum at the same time,” he said. “There’s things you can do to address carbon emissions and climate change without negatively impacting the economy. It could even lead us to a point where less regulations are needed.”

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Mary Durbin, president of the Global Energy Institute said the group supported Biden’s goal of tackling pollution and climate change, but not via a ban on oil and gas operations.

“The administration may refer to their actions as a moratorium, but the industry and the jobs it brings cannot sit idle for a year. The impact on local communities and state budget will be quick and it will be harsh,” he said.

“The Chamber’s message to the Biden administration is simple. There is a better way. We share the goal of addressing climate change. Halting production on federal lands and waters will not halt the demand for energy the production is built on.”

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Durbin said top oil and gas producers in the U.S. were already reducing emissions through “market-driven” solutions with the top five reporting 70 percent reductions.

“There’s no reason to believe progress is going to slow down,” he said. “As we await the administration’s proposal, it’s important to hear from the states that know what an impact such an abrupt halt would have on their economy.”

The enacted 60-day halt and potential full ban on federal leasing drew swift criticism from the oil and gas industry in New Mexico and around the country, while it was championed by environmentalists as progressive environmental policy needed to address climate change.

Mark Allison, executive director of the New Mexico Wilderness Alliance said the Biden administration must take steps to undue the “damage” caused by the administration of former-President Donald Trump who rolled back key environmental regulations on the industry at multiple federal agencies.

“Any step toward fixing the broken federal oil and gas leasing program is a step in the right direction,” Allison said.

“The Biden Administration must take the necessary steps to undo the damage done to New Mexico's air, land, water and public health by the Trump Administration, and ensure that our public lands are part of the solution in addressing climate change, not part of the problem.”

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Elizabeth Caldwell, spokesperson with Texans for Natural Gas said the ban would threaten communities throughout the Permian Basin which spans southeast New Mexico and West Texas.

“Halting federal leasing endangers America’s position as a world energy leader,” Such a ban would essentially squash production in wide swaths of the Permian Basin, threatening the livelihoods of communities across the basin and undermining years of innovation.”

Adrian Hedden can be reached at 575-628-5516, achedden@currentargus.com or @AdrianHedden on Twitter.