Energy 911
Federal moratorium on drilling puts 42K oil patch jobs and a $7B state budget in jeopardy
Listening to the governor’s State of the State speech Tuesday, it might have escaped many viewers that she is the chief executive of the third-largest oil-producing state in the nation. And that the Biden administration a week earlier had announced a 60-day pause on new oil and gas leasing and drilling permits on federal lands, sending shockwaves through the industry that funds a third of the state’s $7 billion-plus budget.
It bears noting that in New Mexico, about half of oil production occurs on federal land.
The governor mentioned oil and gas only once in the annual speech, and unfortunately it wasn’t to play up New Mexico’s contribution to American energy independence, the American-led shale oil revolution that has unleashed previously untapped reserves or the 42,000 oil and gas workers in New Mexico.
Instead, Gov. Michelle Lujan Grisham announced “and this year we will enact the country’s toughest methane and air pollutant rules in the oil and gas industry, finally cracking down on waste and pollution in a way that is not punitive but innovative, capturing harmful emissions and, in the process, creating more revenue for our state and for our schools.”
While that’s important, it had to be a letdown to the blue-collar workers in the oil patch who typically start their workdays with predawn safety meetings and don’t embark on their long drives home from drilling sites until dusk. Last year, the governor didn’t even mention the oil industry in her State of the State speech, even as the state was enjoying a budgetary windfall largely due to an oil drilling boom in southeast New Mexico.
Once again last week, the governor failed to rise in defense of one of the major job-creating privatesector industries in New Mexico — particularly as news reports swirled that the new president would announce a more wide-ranging pause on new oil and gas leases on federal lands, which the Biden administration did Wednesday as part of its battle against climate change.
The world is moving away from fossil fuels to renewable sources of energy. It’s past time, and the right thing to do as we live through the consequences of burning fossil fuels for a century and a half to power the world’s economy, although countries like China have yet to move away from fossil fuels and no one has figured out a way to power a plane on renewable energy or to launch a satellite without carbon-based rocket fuel.
Fossil fuels have been a part of our everyday lives since kerosene replaced whale oil to burn lamps late in the 19th century. But hunting whales for the oil in their blubber is unfathomable today, like burning natural gas to heat our homes will seem to future generations. The shift is clear, but the pace at which it should come is not — especially in a state with 42,000 direct and 134,000 indirect O&G jobs, amounting to 12% of the state’s total workforce.
It was understandable the governor would tout her Energy Transition Act in her annual speech. The 2019 landmark legislation required the state’s investorowned utilities and rural electric cooperatives to increase the amount of electricity generated from renewable resources to 20% in 2020, 50% by 2030 and 80% by 2040. The state’s largest electric utility — PNM — missed the mark by a small percentage last year but expects to come into compliance soon. The others are also making progress.
Meanwhile, we have the gusher-rich Delaware Basin on the New Mexico side of the Texas-New Mexico border, one of the world’s mostprolific oil and gas zones. Modern technologies of hydraulic fracturing and horizontal drilling have made the larger Permian Basin the No. 1 oil and gas producing region in the United States and enabled a 20% increase in state spending under this administration. But you wouldn’t have known it listening to the governor or to most members of our congressional delegation.
Sen. Ben Ray Luján said the 60-day pause was a “reasonable step,” Sen. Martin Heinrich called it “appropriate,” U.S. Rep. Teresa Leger Fernandez called it bold action and U.S. Rep. Deb Haaland, who has been nominated by Biden for secretary of the Interior, didn’t respond to a Journal request for comment. The lone Republican in the state’s congressional delegation, U.S. Rep. Yvette Herrell, says she’s cosponsoring legislation aimed at blocking the suspensions “to protect our jobs
and our state.”
There’s got to be middle ground in there.
In a statement Wednesday after Biden’s announcement of an indefinite pause on new oil and gas leasing on federal lands, Lujan Grisham referred to New Mexico as an “all-of-the-above energy state.” That was a promising choice of words, however calculated, because we do have a hand in all types of energy production in New Mexico — from wind and solar farms to nuclear enrichment and radioactive waste storage. Yet the state’s geological gifts in northwestern and southeastern New Mexico are not white elephants; they should be part of that all-of-the-above energy strategy as we transition to renewable energy sources. Our national energy policy should not be an either-or choice between green or fossil, because both are going to needed for the foreseeable future.
We need our governor and congressional delegation to stand up for all of the state’s energy workers, and all taxpayers. New Mexico has more at stake than any other state amid this national discussion on energy policy — the Wall Street Journal points out the moratorium will hit us hardest, at $946 million — because of our heavy reliance on federal lands for drilling, as opposed to neighboring Texas where almost all oil production takes place on private lands.
New Mexicans need elected leaders to carefully weigh and support all state interests before the oil field spigots are turned off and jobs and revenues dry up.