New Mexico

NM Dems from Non-Producing Regions Pen Dubious Letter Supporting Biden’s Oil & Gas Leasing Ban

Since President Biden issued his executive order in January that effectively banned oil and gas leasing on federal lands, leaders across New Mexico have spoken out against it out of concern it could have on vital programs in the state, and in some cases pleading for an exemption from the order.

Those voices have ranged from local policymakers in prolific oil and gas communities all the way up to Gov. Michelle Lujan Grisham (D), U.S. Sens. Martin Heinrich (D) and Ben Ray Lujan (D), and U.S. Rep. Yvette Herrell (R) – each expressing concern that prolonged delays would have major impacts on education, healthcare and other critical services that rely on oil and gas revenue. According to a recent analysis from the New Mexico Tax Research Institute, this revenue represented 18 percent of the state’s budget ($1.5 billion) in FY2020:

  • $734 million for public education resources
  • $344 million for health and human services
  • Nearly $85 million for public safety

Despite this, a group of 24 of New Mexico’s Democratic lawmakers sent a letter to the president this week praising the leasing pause and the role it could play in moving the state’s economy away from oil and gas. Notably, none of these members represent any oil and gas producing regions of the state.

More importantly, their opinion is in stark contrast to a March letter to the President written by one of their colleagues, State Sen. George Munoz (D), who also happens to chair New Mexico’s Senate Finance Committee:

“…with your 60-day suspension on federal leasing and permitting for natural gas and oil development, and now your indefinite moratorium on all new federal drilling, I write to urgently request an immediate waiver from your federal drilling restrictions for New Mexico.

…If New Mexico is not granted a waiver from this new drilling moratorium, conservative estimates predict we will see at least a $300 million decline in state revenues from oil and gas production in 2022 and a $400 million decline in 2023. While I strongly support efforts to diversify our state’s economy, this kind of drastic reduction in state revenues is unsustainable for New Mexico. Massive job losses, increased reliance on foreign energy and higher CO2 emissions due to slower transition away from coal are counterintuitive to the keys for a successful economic recovery effort in New Mexico.” (emphasis added)

The Biden administration has not issued exemptions to any states and has reassured them that it will release a draft report of its review of the federal leasing program in “early summer.” But when that will actually occur has not yet been made clear, and there has been no indication from the Interior Department if the draft report being published will allow lease sales to resume.

In the meantime, New Mexicans have already seen rigs leave for other states with more private land from the order that these policymakers are praising.

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