Federal Leasing Ban Pledge Hits a Nerve in New Mexico

Mark Green
Posted September 16, 2020

As former Vice President Joe Biden continues to clarify his position on fracking – saying he’d allow it with some environmental safeguards – what he’s not talking about is huge: His and the Democratic Party’s pledge to effectively end new natural gas and oil production on federal lands and waters.

In this post we discussed the national impacts of such a policy, detailed in a new analysis, including weakened U.S. security, lost jobs and reduced economic output.

Few states are projected to be hit harder than New Mexico, where more than 30% of the land is controlled by the federal government and accounts for half of the state’s oil production. As of May, New Mexico was producing 885,000 barrels per day, ranking it second in the nation. So, yes, Biden’s promised ban is making folks in New Mexico a little nervous.

U.S. Rep. Xochitl Torres Small, whose district includes a big part of the oil-rich Permian basin and is home to nearly all of the state’s crude production, worried this summer that stopping energy development would be devastating to New Mexico’s economy:

“New Mexico has always benefited from the energy production in its southeastern corner, and we should continue to be a net energy exporter while taking on the real impacts of climate change. However, I was troubled by [the] conclusion that we should cease all new oil and gas production on federal lands. This is out of touch with the reality on the ground in New Mexico …”

Here’s what devastation from banning new federal development is projected to look like in New Mexico in terms of its economy and energy production:

• More than 62,000 state jobs lost by 2022
• $1.1 billion in revenue to the state could be at risk
• Oil production could decrease 47% and natural gas production could decrease 46%

The Albuquerque Journal (subscription required) made a number of good points in a recent editorial, including pointing out that a ban on new federal leasing would hit home throughout the state, not just in producing areas:

City dwellers in Albuquerque might not think a federal leasing ban would affect them. After all, this isn’t the oil patch. Think again. The money generated for the state’s coffers by oil and gas pays a big chunk of the tab for things like K-12 public schools and higher education.

The Journal said Gov. Michelle Lujan Grisham should explain where she stands on the policy of her party and its presidential candidate:

Is the governor on board with Biden’s proposed ban? If so, how do we back-fill that billion-dollar hole in the budget? These are also fair questions for candidates for Congress and the state Legislature. None of this is to say environmental issues don’t have to be considered. They do. But New Mexicans deserve answers to these questions. Especially as they get ready to cast their votes for candidates up and down the ballot.

New Mexico voters certainly get the importance of natural gas and oil to their state and the nation. Recent polling found strong majorities see the value of natural gas and oil in their personal lives and in America’s future energy needs. They believe natural gas and oil will play an important role in the country’s recovery from the pandemic. Nearly two-thirds would be more likely to vote for a candidate who supports access to natural gas and oil reserves:

Safe to say, given the numbers above, that political pledges to end new natural gas and oil development on federal lands and waters has New Mexico’s attention.