Federal Leasing Ban Discussion Woefully Overlooks New Mexico

A pledge from Presidential candidate Joe Biden to ban federal leasing operations – the practice of auctioning off access to federal parcels of lands for oil and natural gas production – has rightfully drawn the ire of political pundits and industry workers across the Rust Belt and in states like North Dakota.

The discussion and calculus of a federal leasing ban has woefully overlooked New Mexico, a burgeoning energy hub for the United States and one that would economically suffer under Biden’s ban. Moreover, the complexity of the issue goes beyond energy production numbers and extends well into the realm of state budgets, public services, and tax revenue generation.

New Mexico House of Representatives member Kelly Fajardo summated these considerations in a recent Albuquerque Journal piece worth highlighting; she notes:

“Former Vice President Joe Biden’s plan to make millions of energy-rich acres controlled by the Bureau of Land Management off limits to exploration and extraction would do more harm than good here in New Mexico. It would suppress job creation and economic growth as well as deprive our state of much-needed revenue for things like education, health care and public safety. It would also ironically undermine Biden’s ultimate goal to reduce emissions linked to climate change by bringing higher-emitting fuel sources like coal back onto the American energy market.”

This is, of course, correct. According to the Energy Information Administration, New Mexico more than doubled its annual crude oil production from 2013 to 2018, enough to make it the nation’s third largest oil producer in 2018. The state is also a top natural gas producer and sits atop as much as 5% of the nation’s proved gas reserves. The kicker is that more than 30% of the state’s land is federally controlled.

Representative Fajardo quantified the impact of a federal leasing ban, stating:

“The potential economic benefits of tapping natural resources on this acreage are significant as the revenues generated through leasing, fees and production by private interests flow back to the American public. For example, in 2018, a single lease sale provided nearly a billion dollars – with nearly half of that money coming back to New Mexico and the other half going to the federal treasury, benefitting taxpayers across the country. Last year, New Mexico also received the highest disbursement of any state, $1.17 billion, which is also the largest allocation received in the state’s history. This money enabled communities in the state to provide critical services, improve schools and maintain infrastructure.

“As you might imagine, elected officials from both parties are concerned about what a federal leasing ban could mean for New Mexico. These taxes and royalties account for 39% of the state’s annual budget, including over $1.4 billion for public schools.”

Far-fetched energy proposals like the Green New Deal, which the Biden campaign narrowly watered down for themselves, are untenable for production heavy states like New Mexico, Pennsylvania, and Ohio but also the country at large.

The Obama Administration supported an ‘all-of-the-above’ energy strategy that included not only investment in renewables but also cornerstone fuel sources like natural gas and oil. The Trump Administration has unleashed American natural resources with effective regulation – but many of the benefits would be washed away with a federal leasing ban, with consumers ultimately paying the price.