By Valerie Volcovici and Jarrett Renshaw

WASHINGTON, Feb 12 (Reuters) - New Mexico’s Democraticsenators spoke with White House National Climate Advisor GinaMcCarthy earlier this month to discuss ways Washington cancompensate oil-dependent states for potential revenues lostduring a pause on new federal oil and gas leasing, the senatorssaid on Friday.

The discussions are a sign President Joe Biden’sadministration has begun studying the financial and politicalcost of halting new federal oil leases, a key element of Biden’ssweeping plan to decarbonize the U.S. economy by 2050 to fightclimate change.

Senators Martin Heinrich and Ben Ray Lujan told Reuters thatthey had a recent phone meeting with McCarthy in which theyexpressed a need for financial assistance to offset the impactof the moratorium and give certainty as they plan for thefuture, and explained that New Mexico might also need more timeto transition away from drilling.

New Mexico is by far the biggest beneficiary of the federaldrilling program because it hosts vast federal acreage overlyinga share of the Permian Basin, the world’s most productive oilfield.

Heinrich told Reuters that he was contemplating introducinga bill that could direct federal funds to states that loserevenue from federal oil drilling, similar to the Secure RuralSchools Act of 2000 that was designed to help communities hit byfalling timber revenue.

"Right now what we are trying to do is put together a letterto the White House that says this is how we would put guardrailson this, and this is how you make it real when you say you don’twant to leave workers behind," Heinrich told Reuters in aninterview.

Lujan, meanwhile, raised the possibility of using "paymentsin lieu of taxes,” a Congressionally authorized program thatsends federal payments to local governments to offset the lossof tax revenue due to the presence of federal lands, hisspokeswoman said.

A spokesman for the White House declined to comment on theconversation.

A source engaged in the discussions said, however, that “theWhite House understands there will be critics who say haltingleases will cost states money and hurt local schools and localgovernments. There is interest in finding a short-term solutionto make people whole during the transition."

Biden last month signed an executive order pausing new oiland gas leasing on federal lands and waters that account foraround 25% of the nation’s petroleum production pending a reviewof its impacts, a move widely seen as a first step to thepermanent ban he promised during his campaign.

U.S. states last year collected some $1.8 billion inrevenues from federal lands drilling to support publics schoolsand other social programs, according to the Interior Department.

Oil industry groups have blasted the drilling pause, citingNew Mexico as a victim of the policy.

Heinrich said while he does not support a "unilateral ban"on oil and gas leases, lawmakers and industry need toacknowledge that the economy is shifting away from fossil fuels.

"There is going to be a transition here. We need to behonest about that," he said.(Editing by Richard Valdmanis and Marguerita Choy)