After a federal judge in Louisiana struck down a halt of new federal oil and gas leases imposed by President Joe Biden upon taking office, New Mexico industry leaders applauded the decision while environmentalists criticized the move as stymieing efforts to curb pollution.
On Tuesday, U.S. District Judge Terry Doughty for the Western District of Louisiana issued a preliminary injunction against the halt on new oil and gas leases on federal land, barring the U.S. Interior Department, Bureau of Land Management and other federal agencies from enforcing the ban.
The rule came amid a lawsuit filed in March by 13 states against the Biden administration that called for the ban to be lifted, citing the economic harm brought on by any alleged disruption of oil and gas activities on federal land.
Plaintiffs were oil-producing states Louisiana, Alabama, Alaska, Arkansas, Georgia, Mississippi, Missouri, Montana, Nebraska, Oklahoma, Texas, Utah and West Virginia.
While New Mexico was not involved in the lawsuit, leaders pointed to the impacts on the state ranked third in the nation in oil production.
More than a third of New Mexico’s State budget comes from oil and gas revenue, and more than half of operations are on federal land in the state.
In a statement from the New Mexico Oil and Gas Association (NMOGA), the state’s largest fossil fuel trade organization, the group said New Mexico was the nation’s largest producer of oil and gas on federal land and no state would see as negative an economic impact under the ban on new leases.
Even worse, NMOGA argued, the leasing pause could cause oil and gas companies to move production to other countries with less stringent environmental safeguards.
“As the nation’s largest onshore producer of oil and natural gas on federal lands, no state’s economy or budget stood to lose more as a result of the leasing pause,” read the statement.
“Leasing bans and other hurdles to oil and natural gas production in New Mexico weaken energy security, increase costs for consumers, and reward other parts of the world who do not share our strict environmental safeguards or our commitment to fight climate change.”
Industry says oil and gas needed for COVID-19 recovery
In New Mexico, oil and gas provides up to $1.5 billion in funding for public services like education and healthcare, NMOGA contended.
As the state recovers from the impacts of COVID-19, the group said oil and gas operations could provide financial solace while prices recover and drilling rigs return to the oil-rich Permian Basin in the southeast and the gas-heavy San Juan Basin in the northwest region of the state.
“Our economy is recovering, and all New Mexicans along with energy-producing communities are eager to take part in its resurgence,” the statement read. “We urge the administration to formally lift the leasing ban once and for all as we work together for solutions to lower emissions and reduce the risks of climate change.”
But environment groups were critical of the injunction, pointing to thousands of drilling permits and millions of acres of federal land already leased but unused and not impacted by the pause.
Upon enacting the pause, the Department of the Interior reported the oil and gas industry held 13.9 million onshore acres of unused federal land leases, 53 percent of the industry’s total 26 million acres leased for extraction.
Offshore, 9.3 million acres or 77 percent of the 12 million total leased acres were unused, the DOI reported.
Both onshore and offshore, energy companies held 7,700 unused but approved drilling permits that would not be impacted by the pause, records show.
Camilla Feibelman, director of the Sierra Club’s Rio Grande Chapter said the industry had enough leases and permits to keep drilling “for years” after the pause was enacted and that fossil fuel production should be slowed to prevent further damage to the environment.
“In truth, oil and gas corporations are sitting on more than 6,000 unused permits to drill in New Mexico alone. Even industry CEOs have admitted that that’s enough to drill for years even if another new lease is never issued. And another new lease never should be issued,” she said.
Fossil fuels ‘not compatible’ with climate goals
Feibelman said fossil fuels were “not compatible” with reducing carbon pollution by 50 percent by 2030 and continued extraction operations would lead to a “climate catastrophe.”
“The Biden administration and (Interior) Secretary (Deb) Haaland are looking forward for our children and grandchildren. Big Oil and Gas are looking only at their own profits,” she said.
“It is beyond the pale that oil and gas companies believe they can force a democratically elected government to turn over public lands that are shared by all Americans so that they may profit from and pillage them.”
Kayley Shoup, organizer at Carlsbad environmental group Citizens Caring for the Future said the ruling would lead to increased pollution in fence-line communities adjacent to heavy extraction operations like Carlsbad.
She said the federal government must amend oil and gas policy through an ongoing review conducted by the DOI and begin the nation’s transition away from carbon-based energy.
“This ruling simply underscores the urgent need to overhaul the outdated federal oil and gas program. Communities like ours are facing the consequences of a system that favors industry over the health and safety of our citizens, and that needs to change as soon as possible,” Shoup said.
“We hope the Interior Department takes aggressive steps to protect communities like ours from oil and gas, and to start a deeper conversation about New Mexico’s transition away from fossil fuel dependence.”
In his ruling, Judge Doughty argued the halt on new leases was unconstitutional and had already had devastating impacts on his and other oil-producing states and local economies.
“The Plaintiff States’ claims are substantial. Millions and possibly billions of dollars are at stake. Local government funding, jobs for Plaintiff State workers, and funds for the restoration of Louisiana’s Coastline are at stake,” read the opinion.
“Plaintiff States have a reliance interest in the proceeds derived from offshore and on-land oil and gas lease sales.”
Adrian Hedden can be reached at 575-618-7631, [email protected] or @AdrianHedden on Twitter.