Yvette Herrell seeks to spare New Mexico from Biden's ban on oil and gas leases

U.S. Rep. Yvette Herrell continued to fight President Joe Biden’s halt on new federal oil and gas land leases, introducing a bill that would exempt New Mexico from the moratorium enacted last week via executive order.

Herrell announced she was introducing the Protecting New Mexico’s Jobs and Public Education System Act on Wednesday, blocking the current order from affecting her home state which Herrell argued stood to lose more than any other if a ban on oil and gas leases on federal land took effect.

Final text was not yet submitted as of Thursday. 

National:New Mexico lawmakers warned of impacts from Biden's oil and gas leasing ban

More than half of oil and gas production in New Mexico occurs on federal land, and the state is third in the nation for onshore crude production and ninth in natural gas.

Opponents of Biden’s order, which was intended to allow the federal administration to study the environmental impact of fossil fuel development toward its goal of mitigating pollution and climate change, argued it would cripple New Mexico’s economy and force operators to move to other areas like Texas where most oil production is on private land unencumbered by federal policy.

Disrupting oil production on federal land could also mean the U.S. would import more oil and gas from other countries like Russia and Saudi Arabia, the industry contended, which could have less-stringent environmental regulations.

But for New Mexico, Herrell said her chief concern was loss in state revenue intended to support public education and other services if production was stymied.

Previous:New Mexico industry warns of dire impact as Biden pauses oil and gas leasing

Revenue from the oil and gas industry was credited with providing about a third of the state’s budget this year, records show.

"New Mexico stands to lose more than any other state under Biden's ban," Herrell said. "The loss of jobs and the loss of funding for public education would be absolutely devastating."

A report from the American Petroleum Institute, a national oil and gas trade association, indicated the ban would threaten $1 billion in state revenue and 62,000 jobs while oil production would decline in the state by 47 percent and natural gas would drop by 46 percent.

What now?:New Mexico oil and gas looks to future under Biden's halt on land leasing

About 57 percent of the nation’s onshore oil and gas production on federal land occurs in New Mexico, the report read, and 31 percent of U.S. federal natural gas development.

In a Jan. 25 letter to New Mexico Gov. Michelle Lujan Grisham, Herrell called on the governor to oppose the ban and seek exemption for the state or have a plan to replace the revenue Herrell said would be lost.

Lujan Grisham did not indicate if she would oppose the executive order when it was released, but voiced interest in working with the Biden administration for a “balanced national policy” and signaled her support for effort to address climate change.

Business:Leaders wary as Biden expected to ban federal oil and gas leasing

"I've asked the governor what her plan is to make up this loss in state revenue," Herrell said. "Even optimistic estimates for land-lease payments and taxes on proposed wind and solar projects fail to fill the hole the loss of oil and gas revenue will leave in our state budget.

"Biden's energy policy replaces a lot of good-paying jobs with a lot fewer lower-paying jobs.”

A Feb. 2 report from Rocky Mountain Wild, an environmental group based in Denver, showed a decline in federal lands proposed for lease sales by the oil and gas industry in 2021.

The report showed about 60,000 acres were sold in 2019 and 70,000 acres in 2020, but just 6,665 acres were planned to be offered through July 2021 in New Mexico.

Previous:Joe Biden halts oil and gas leases, permits on federal land and water

In total, the study reported the oil and gas industry already holds 20 million acres in the Mountain West region and 4.2 million in New Mexico alone with 1.1 million acres not developed.

Tehri Parker, executive director of Rocky Mountain Wild said the data showed a decline in interest among oil and gas companies for new leasing on federal land and that the industry’s current holdings would minimize any immediate impact of Biden’s order.

More:New Mexico oil and gas leaders slam Biden's federal leasing halt as 'devastating' economy

“The reality is that the industry is holding millions of acres of leases on federal land across the West, making the immediate impact of the order negligible,” Parker said. “The data is clear – low industry demand, dwindling desirable federal acres, and other market forces show the industry’s declining interest pre-dates any federal actions on oil and gas.”

Ryan Flynn, president of the New Mexico Oil and Gas Association argued the industry in New Mexico needs federal land to continue to support the state’s economy and fund public education.

“Restricting oil and gas development on federal lands will rob New Mexico of opportunities for economic growth and hollow our schools of critical resources that put teachers in classrooms and help our young children learn,” Flynn said.

Lucan Herndon, energy and policy director at ProgressNow New Mexico, said Herrell's efforts to block the ban in New Mexico served to exempt the industry from accountability in reforming the federal leasing program, updating royalty rates and addressing environmental impact. 

“If the industry really cared about New Mexico, it would stop hiding behind teachers and students and come to the table to support bipartisan royalty reform efforts, put forth a concrete plan to cleanup abandoned wells, and stop trying to delay progress on methane emission rulemaking," he said. 

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