New Mexico's public land to be sold to oil and gas industry in June under heavy reforms
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A sale of federal land to the oil and gas industry in southeast New Mexico’s Permian Basin was expected to be held this summer after more than a year of delays as the federal government reformed its fossil fuel programs.
Upon taking office in January 2021, President Joe Biden placed an indefinite halt on new leases of federal land for oil and gas extraction as its Interior Department conducted a review of associated policies.
That pause on leases meant the proposed sale of about 520 acres on five parcels in Lea and Chaves counties was postponed since April 2021.
Related: Permian Basin poised for 'surge' in production as large oil and gas deals continue
A report was issued by the DOI that summer calling for several changes in how the agency conducts environmental review to include climate change impacts of extraction operations should the public land be leased.
But before that report was released, a federal judge in Louisiana issued an injunction in June 2021 ordering the federal government to resume its lease sales after a lawsuit was filed by several oil-producing states not including New Mexico.
Environmental analysis was redone by the DOI to reflect its reforms, further delaying the sales along with subsequent litigation as to the use of the “social cost of carbon” metric which measures impacts of potential emissions from fossil fuel operations resulting from the proposed sale.
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On Monday, the DOI announced it had completed its latest round of environmental analysis and the sales would move forward.
For the New Mexico sale, the announcement opened a 30-day period for protesting comments to be filed to the DOI’s Bureau of Land Management through May 18.
In a report, BLM New Mexico Deputy State Director of Minerals Sheila Mallory wrote the agency found “no significant impact” of leasing the proposed lands.
“Within these counties, as well as the area immediately surrounding the nominated lease parcels, there already exists extensive oil and gas development and production,” read the report. “Oil and gas development and its attendant industry are identifying components of the economic and social fabric of the region.”
Criticism from oil and gas industry and environmentalists alike
The national reforms increased the royalty rate energy companies would pay for operations on the land to 18.75 percent from 12.5 percent – a 50 percent increase.
More: COVID-19 recovery meant more oil spills in New Mexico, study says. What can the State do?
They also resulted in an 80 percent decline in land available for lease in nine states from 646 parcels on 733,000 acres to 173 parcels on 144,000 acres.
The BLM’s announcement was met with criticism both from New Mexico environmentalists who argued oil and gas extraction threatened the environment and public safety, and by industry groups who said the delay in sales and subsequent reforms were harmful to American energy development.
"The Biden administration’s announcement to lease just 20 percent of the available acreage nominated by the oil and gas industry will do little to change the President’s war on domestic production punishing American consumers,” said Jim Winchester, executive director of the Independent Petroleum Association of New Mexico.
More: New Mexico has a month to apply for $25 million to clean up abandoned oil and gas wells
Western Energy Alliance President Kathleen Sgamma said the higher royalty rate would increase energy costs for American consumers.
“This increased tax will have the effect of any other tax increase–you get less of what’s taxed, in this case, federal oil and natural gas,” she said. “At a time when the administration should be increasing production, it continues to introduce new policies that further depress American production and keep gasoline prices high.”
But that production could imperil communities in the oil patch, said Kayley Shoup with Carlsbad-based environmental group Citizens Caring for the Future, risking harm from resulting pollution.
More: Oil and gas flowing from Permian Basin on heels of COVID-19, Russia-Ukraine conflict
She said the federal government should completely cease leasing land to the oil and gas industry.
“Our day-to-day life and health is directly affected by these sales and the subsequent production that comes along with them,” Shoup said. “It would take a small army to truly enforce regulation here in the Permian, and we know that is the reality in oil and gas regions around the country.”
Jeremy Nichols with Santa Fe-based WildEarth Guardians said resuming the leases meant violating campaign promises made by Bident to crack down on pollution and mitigate the impacts of climate change.
“This is pure climate denial,” Nichols said. “While the Biden administration talks a good talk on climate action, the reality is, they’re in bed with the oil and gas industry.”
Interior Secretary Deb Haaland, herself a native New Mexico and member of the Laguna Pueblo who represented New Mexico’s Second Congressional District in the U.S. House of Representatives, said in a statement that the planned lease sales would be held under reforms that reflected a philosophical shift to put the needs of local communities above the profits of the oil and gas industry.
“How we manage our public lands and waters says everything about what we value as a nation,” Haaland said. “Today, we begin to reset how and what we consider to be the highest and best use of Americans’ resources for the benefit of all current and future generations.”
Adrian Hedden can be reached at 575-628-5516, achedden@currentargus.com or @AdrianHedden on Twitter.
This article originally appeared on Carlsbad Current-Argus: New Mexico's public land to be sold to oil and gas industry in June
