Santa Fe County supports the ongoing halt on new federal oil and gas leases in New Mexico and across the country.
The block on new leases was imposed via executive order by the administration of President Joe Biden upon taking office, and was intended to pause any new leases while the U.S. Interior Department reviews its federal fossil fuel program, potentially updating policies like bonding and fees paid by energy companies to develop on federal land or lands available for drilling.
On March 31, the Board of County Commissioners of Santa Fe County voted to approve a resolution that expressed support for Biden’s actions, even after the move received push back from the oil and gas industry and local government in the oil-rich Permian Basin region in southeast New Mexico.
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New Mexico Gov. Michelle Lujan Grisham cautioned the Biden administration in letters to the DOI and the President that the halt on federal leases could negatively impact the State’s economy as more than half of its oil production occurs on federal land and the industry funds more than a third of New Mexico’s budget.
Leaders worried the pause on new federal leases could cause oil companies to move operations across the border into Texas where most production occurs on private land.
But in its resolution, Santa Fe County argued New Mexico was seeing the “devastating” impacts of climate change created by fossil fuel production, asserting a quarter of New Mexico’s greenhouse gas emissions come from such activity on public lands.
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“As elected leaders, it is our responsibility to take and support prudent and pragmatic steps to reverse climate change and mitigate its devastating impacts by reducing the amount of greenhouse gases and other forms of pollution that contribute to climate change,” read a passage of the resolution.
The resolution went on to voice support for Biden’s pause and called on the Administration to “modernize” the federal oil and gas leasing program by raising rates paid by companies to provide a “fair return” to taxpayers.
Commissioners, via the resolution, also urged the federal government to develop a plan to phase out fossil fuel production while also supporting communities that are economically dependent on extraction.
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Eddy County is one of those communities.
But local leaders in Eddy County, and within the City of Carlsbad, opposed Biden’s pause on leasing, arguing it could devastate the oil and gas industry the state and nation relies on for economic development and essential fuel.
Eddy County Manager Allen Davis said the pause on new leases was a political act by the President that could have negative effects on communities in New Mexico and the U.S.
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He said the Eddy County Commission was unlikely to voice support like that of Santa Fe’s.
“I personally don’t believe the pause in federal leasing is good for the U.S. In my opinion, it’s a grand standing act for political purposes,” Davis said. “Certainly, Santa Fe County commissioners can choose to support what they will. However, Eddy County won’t be following suit.”
In recent years, as oil production boomed in the Permian Basin, led by increasing use of hydraulic fracturing and horizontal drilling, the region rose to prominence as one of the most prolific oilfields in the country and world.
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Davis pointed to the windfall of revenue brought into the State by extraction, funding public services like education and roads.
“Eddy County, as well as the State of New Mexico, has been the beneficiary of past federal leasing activities and efforts to the tune of millions of dollars to the County and billions of dollars to the State from the resultant oil and gas development activities from those leasing efforts,” Davis said.
“Why would you purposely choose to undermine the economic engine that provides thousands of good paying jobs and billions in tax revenues, in a State that sorely lacks for both jobs and tax revenues, by supporting a policy to limit leasing?”
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He said there was no proof that a pause on leasing was beneficial, but evidence did point to federal leasing creating jobs throughout the state along with revenue.
The pause was already impacting development only months into its enactment, Davis said, as New Mexico’s rig count stagnated.
Baker Hughes showed New Mexico’s rig count averaged 71 in May, up from 61 a year ago but showed little change month-to-month since the pause was enacted.
Meanwhile, Texas continued to add rigs each month, growing from 170 in January when Biden took office to 216 last month.
“The impact of these federal actions have resulted in creating uncertainty about development investments for previously federally leased assets particularly in southeast New Mexico,” Davis said. “Evidence of that uncertainty, and lack of investment, is reflected in the rig count changes in 2021 for the Permian Basin.”
Carlsbad Mayor Dale Janway shared Davis’ concerns and while he said he supported a diverse energy supply, warned that the nation was far from ready to completely cease its use of fossil fuels.
“We fully support an ‘all of the above’ approach for energy, including oil and gas, nuclear, hydrogen, solar and wind, but we are nowhere close as a society to transition away from fossil fuels,” Janway said.
“Pauses on oil and gas leases on federal land inflict financial pain on some less wealthy states, including New Mexico. Wealthier states such as Texas, with less public land, would simply benefit at our expense.”
An efforts “against” oil and gas such as the Santa Fe County resolution, Janway said, ignored the benefits the industry brings to the state.
“The end result could be tens of thousands of New Mexicans out of work and a loss of millions of dollars that would have gone to schools and education,” Janway said.
“Southeast New Mexicans have grown very weary of what seems to be an unrelenting attack on oil and gas. Perhaps Santa Fe County would consider amending their resolution to withhold receiving any financial benefit from the oil and gas industry.”
Adrian Hedden can be reached at 575-618-7631, [email protected] or @AdrianHedden on Twitter.