New Mexico is already paying the price for the Biden administration’s freeze on agency-level approvals for permits on federal lands as oil rigs relocate to private property in Texas.
Sarah Cottrell Propst, New Mexico secretary of Energy, Minerals and Natural Resources, said operators are moving rigs out of state over the “confusion” surrounding the Interior Department‘s Jan. 20 order requiring top political appointees, instead of career staff, to approve permits for 60 days.
The order has had little impact on states such as Texas, where only 1.8% of the land is federally owned, but could prove devastating to New Mexico, which leads the nation in oil production on federal lands and depends heavily on oil-and-gas tax revenue to fund its budget.
“Approximately 55% of oil and gas wells in New Mexico are drilled on federal lands, particularly in the Permian Basin,” Ms. Propst said in a Tuesday letter to Interior. “By contrast, the Texas side of the Permian Basin is largely private land and therefore unimpacted by the new federal actions. We have seen rigs depart New Mexico for Texas simply because of the uncertainty caused by the Order.”
She asked the department to offer clarification on its order with additional written guidance to field offices.
“The recent DOI Order achieves important operational goals that we support, but it has resulted in on-the-ground uncertainties that undermine our ability to safeguard New Mexico’s economy and environment,” Ms. Propst said.
The Biden administration’s “pause” has created a sticky political situation for New Mexico Gov. Michelle Lujan Grisham and other Democrats in oil-and-gas states who stand to lose tens of thousands of jobs and billions in revenue from President Biden’s early rash of climate orders.
Not lost on political observers was the irony of blue-state New Mexico, which swung for Mr. Biden in the 2020 election, losing jobs to red-state Texas as a result of the Biden administration order.
Larry Behrens, Western states director for Power the Future, called on Ms. Lujan Grisham to “be a leader in seeking a waiver from President Biden’s harmful orders.”
“The fact Governor Lujan Grisham’s administration finally admits President Biden’s orders are harming our state is cold comfort to New Mexico’s energy workers who want to get to work,” Mr. Behrens said. “While leaders in other states are standing up for their communities and their economies, New Mexico’s leaders offer only useless statements that help no one.”
Sarah Cottrell Propst, @EmnrdNM Chief: Natural gas and oil leasing freeze “has resulted in on-the-ground uncertainties that undermine our ability to safeguard New Mexico’s economy and environment.” https://t.co/iXQdzhTIRs— American Petroleum Institute (@APIenergy) February 10, 2021
In her letter, Ms. Propst noted that the Interior order says it “does not limit existing operations under valid leases” and “does not apply to authorizations necessary” to avoid threats to human health, welfare and safety.
“However, there is confusion in the field regarding which approvals fall within these categories because additional approvals are often required even when operators have a valid lease and permit to drill,” Ms. Propst said. “Operators have reported many examples of approvals not moving forward that appear to fall under these exceptions.”
The department plans to conduct a review of “relevant decisions at the Department of the Interior” during the 60-day suspension, according to the order from acting Interior Secretary Scott de la Vega.
An Interior spokesperson said the department does not comment on correspondence.
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