Benefits of oil and gas debated in Congress as feds ready to lease more land in New Mexico

New Mexico’s debate on the impacts of leasing public lands to the oil and gas industry was brought before Congress during a Dec. 2 hearing in the U.S. House Committee on Natural Resources.

The hearing was called after the U.S. Department of the Interior and its Bureau of Land Management moved forward with plans to hold the first land lease auction to the fossil fuel industry since 2020.

Upon taking office in January, the administration of President Joe Biden placed a halt on new leases on federal land for extraction while the DOI conducted a review of such policies.

More:Oil and gas brings $5.3 billion to New Mexico, industry cautions against 'hostile' policy

A federal judge in Louisiana earlier this year issued an injunction demanding the federal government resume leasing and citing economic harm on oil-producing states caused by temporary pause, and the BLM released its plans to hold several land sales, including in southeast New Mexico’s Permian Basin, early next year.

The DOI also released its report last week, calling for higher royalty and bonding payments and reforming how leases are sold and managed, but drawing criticism from environmentalists who said the report was short in addressing the impacts of climate change, and industry leaders who argued against increased production costs that could result.

During the hearing committee member U.S. Rep. Melanie Stansbury (D-NM) said climate change brought on by continued fossil fuel development must be addressed by the federal government.

More:'The time is now': New Mexico taking action on oil and gas-induced earthquakes

She referred to a recent report from the Intergovernmental Panel on Climate Change (IPC) that said global warming could exceed 2 degrees Celsius by the end of the 21st Century without “deep reductions” in carbon emissions and other air pollutants from activities like automobiles and oil and gas extraction.

“We are literally at a tipping point,” Stansbury said before the committee.

“The (IPC) report told us that if we do not take action globally—across every sector of our society, on every continent of this planet to cut carbon emissions, we will cross a tipping point that will affect every community on this planet.”

More:Smaller 'independent' oil and gas producers leading Permian Basin growth, study says

Stansbury advocated that the economy must diversified on the national and state level away from its reliance on oil and gas.

In her home state of New Mexico, oil and gas makes up more than a third of the state’s budget with about half of that production occurring on federal land.

“How do you see the long-term diversification of our economy? What are the major sectors that we can be moving in?" she asked during the hearing.

"How do we ground that work in really community-based economic development, so that we’re empowering communities to control their own destinies and their own futures as they’re imagining new local economies?”

More:Interior's proposed fossil fuel reforms criticized by industry, New Mexico environmentalists

New Mexico Sen. Carrie Hamblen (D-38), chief executive officer of the Las Cruces Green Chamber of Commerce which advocates for environmental practices at local businesses, said New Mexico and other fossil-fuel-dependent states must attract and invest in new industries other than oil and gas and use public lands to support them instead of continued extraction.

This could be especially helpful to support New Mexico’s rural communities, Hamblen said, which she contended were often left out of economic diversity projects in favor of population centers and urban areas like Albuquerque and Las Cruces.

“You and I both know how rural New Mexico is, and how we have populations that are getting ignored in this conversation about climate change, about diversifying our economy, and about making sure our rural communities thrive,” Hamblen said.

“And so, I feel that it’s really important that we can focus these new industries in those communities so they can flourish just as much as Albuquerque, or Las Cruces, or Santa Fe.”

More:New Mexicans testify for stronger air pollution controls on oil and gas during EPA hearing

But a recent report from trade group the New Mexico Oil and Gas Association showed the state’s reliance on oil and gas could be deepening, announcing a record $5.3 billion in revenue brought into New Mexico from the industry in fiscal year 2021 – money to support public services like healthcare and education.

U.S. Rep. Yvette Herrell (R-NM), New Mexico’s lone Republican in Congress who represents its Second Congressional District in the rural southern region containing the Permian Basin and most of the state’s oil and gas production, said the economic benefits of extraction cannot be ignored.

“The oil and gas industry is not driving the cost at the pump. The increase at the pump is a lack of production because of this administration and inflations,” Herrell said.

“The U.S. is back. We are back to lead the world. But what we’re doing is handing over the reigns to energy independence to empower China, Russia, Saudi Arabia and everyone else except the United States."

She said she represents “over 100,000 constituents directly or indirectly employed” by oil and gas, and that New Mexico was a leader in America’s independence from foreign energy sources, only threatened by recent policy shifts Herrell said could curb U.S. production.

More:Eddy County oil and gas revenue collections rise in September

“So when we start talking about these policies if we’re not being very honest about who’s being affected, we’re really just pushing industry and jobs to other countries and we’re going to become on reliant on energy sources from countries that are not our friends.”

But despite the purported economic gains to New Mexico’s schools and other services, a group of educators on Tuesday sent a letter to the New Mexico Oil and Gas Administration calling for the state to find a “more diverse” source of revenue for its schools to insulate education from the industry’s cyclical boom-and-bust nature.

“We appreciate the funding generated for our state’s education system from every source, including from oil and gas,” the letter read. “But relying so heavily on one industry has unfortunately had negative consequences for students as school funding has risen and fallen along with the industry’s fortunes.

“New Mexico children deserve an education system from early childhood through higher education funded by stable and consistent sources of revenue which do not also contribute to endangering their future on this planet and our own Land of Enchantment.”

Adrian Hedden can be reached at 575-618-7631, achedden@currentargus.com or @AdrianHedden on Twitter.