A widely-anticipated report from the federal U.S. Department of the Interior on oil and gas policy recommended numerous reforms but divided industry leaders and environmental groups in New Mexico in debate on the need for stronger regulations to limit fossil fuel pollution and its impact on climate change.
When President Joe Biden took office in January, the Department of the Interior enacted a halt on new leases of federal land to oil and gas operators as the agency announced it was conducting its review of the federal fossil fuel program.
Oil and gas supported about a third of New Mexico’s state budget with about half of the state’s production occurring on federal land, meaning those on both sides of the debate did agree that federal policy shifts could impact New Mexico more than any other state.
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On Nov. 26, the DOI released its report after about 10 months of review citing “significant shortcomings” in its oil and gas land leasing policies.
The report recommended increasing royalty and bonding rates energy companies pay on operations on public land, while also prioritizing oil and gas leasing on lands known to be productive and avoiding locating fossil fuel infrastructure on lands with recreational, wildlife or cultural resources.
The Interior Department has an obligation to responsibly manage our public lands and waters – providing a fair return to the taxpayer and mitigating worsening climate impacts – while staying steadfast in the pursuit of environmental justice,” said Interior Secretary Deb Haaland, herself a former U.S. representative for New Mexico’s First Congressional District.
“This review outlines significant deficiencies in the federal oil and gas programs and identifies important and urgent fiscal and programmatic reforms that will benefit the American people.”
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But the report’s publication drew disapproval from the oil and gas industry which argued the recommendations could stymie fossil fuel production, and environmentalists who said the report did not go far enough in addressing the impacts of pollution.
President of the Western Energy Alliance Kathleen Sgamma criticized the Biden administration for proposing “roadblocks,” she said, to American energy production via the report while calling on foreign nations to increase production in hopes of addressing supply deficiencies.
Biden and his administration recently called on members of the Organization of Petroleum Exporting Countries (OPEC) to increase exports to address global energy shortages and announced the release of about 50 million barrels of oil from the Strategic Petroleum Reserve.
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But Sgamma said the government should rely on the U.S.’ own fossil fuel producers to meet energy demands and avoid policy that could slow domestic production, which she argued operates under stricter environmental requirements than that of foreign nations.
“While President Biden is urging Russia and OPEC to increase production, the Interior Department is erecting roadblocks to American production. Oil and natural gas from federal lands is among the most sustainably produced in the world, and certainly cleaner than the oil produced in Russia,” Sgamma said.
“Besides the stricter environmental controls on public lands, producers agree to extra measures to protect wildlife, reduce emissions, reduce water use, and ensure stewardship of the land.”
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Santa Fe-based WildEarth Guardians was also critical of the report, but for opposite reasoning, contending the report failed to adequately address the industry’s impact on climate change via pollution the group argued was inherent in oil and gas production.
Jeremy Nichols, climate and energy program director at WildEarth Guardians said Biden vowed on the campaign trail to work against climate change by curbing fossil fuel operations, and the recent report appeared in denial of such impacts.
“This isn’t just a broken promise, it’s outright deceit,” Nichols said. “While the Interior Department claims to be taking action for the climate, this report seems to confirm the administration’s only interest is in driving climate denial on behalf of the fossil fuel industry.”
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The report did assert that “even before factoring in the resulting climate-related costs that must be borne by taxpayers” the current fossil fuel program failed to garner a “fair return” to American taxpayers.
It also contended the recommendations sought to address biodiversity loss and “tackle” climate change.
While the report did advocate for higher fee rates paid by operators, diversifying land use and improving leasing processes to include more stakeholders, it stated federal policy failed to account for climate change impact but did not present any suggested policies to reduce emissions or other polluting aspects of oil and gas operations.
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Nichols said this continued a pattern of the Biden administration in not living up to its promises to mitigate the energy industry’s impact on the environment, citing a January executive order issued by the President that called on the Interior Department to do so.
“Despite President Biden’s direction, the Interior Department’s report does absolutely nothing to confront the climate impacts of unchecked federal oil and gas extraction,” Nichols said. “At best, it’s outright climate denial. At worst, it’s deliberately deceptive, and nothing more than a shill for the fossil-fuel industry’s bottom-line.
“Either way, the Interior Department is failing the climate and failing Americans.”
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Michael Casaus, New Mexico state director with the Wilderness Society said the report did make clear that the oil and gas industry was damaging to the environment and must be reformed, while the nation prioritizes a shift to renewable energy.
“This report echoes what we have long known: the current system is broken. It short-changes New Mexicans while mortgaging our air, land, water, health and long-term economic stability,” he said.
“State leaders, Congress, and the Biden administration must now lead the transition to a greener, fairer, energy economy.”
Adrian Hedden can be reached at 575-618-7631, [email protected] or @AdrianHedden on Twitter.