Governor asks for clarification of oil, gas order

SANTA FE — With New Mexico at the center of a climate change debate, Gov. Michelle Lujan Grisham’s administration has asked the U.S. Department of Interior to clarify the workings of a recent order dealing with oil and natural gas drilling on public lands.

In a letter last week, state Energy, Minerals and Natural Resources Secretary Sarah Cottrell Propst said uncertainty caused by the order has already caused oil rigs to leave New Mexico for Texas, where federal land is more sparse.

“The recent DOI order achieves important operational goals that we support, but it has resulted in on-the-ground uncertainties that undermine our ability to safeguard New Mexico’s economy and environment,” Cottrell Propst wrote in her letter to a top federal agency official.

Specifically, the letter sought more clarification of whether the order applies to oil operators with valid drilling licenses and permits who still need right-of-way approvals for laying pipeline, among other issues.

A state Energy, Minerals and National Resources spokeswoman said Monday there were no updates to provide since the Feb. 9 letter, while the Governor’s Office indicated Cottrell Propst’s letter speaks for Lujan Grisham and her administration.

“We continue to communicate directly with our federal partners, and evaluate the potential impacts of these actions and how we can successfully move forward together,” said Lujan Grisham spokeswoman Nora Meyers Sackett.

Just days after taking office last month, President Joe Biden issued an executive order to indefinitely pause all new leasing activity on federal lands so the U.S. Department of the Interior can review leasing and permitting processes.

In addition, a separate order issued by acting agency Secretary Scott de la Vega — U.S. Rep. Deb Haaland, D-N.M., has been nominated as Biden’s interior secretary, but is not yet confirmed — elevated decision-making on new drilling permits to senior department staffers for 60 days.

The pause on new lease sales does not affect oil and gas drilling under valid existing leases in New Mexico and other states, according to the Interior Department.

And state energy officials have recently pointed out more than 6,000 oil drilling permits have been acquired by operators — primarily in southeastern New Mexico — but not yet used.

However, legislative economists have said an extended “pause” on all new leasing activity on federal lands would eventually lead to a decline in oil production, and some state lawmakers have suggested the federal government should compensate New Mexico for any related revenue losses.

In fact, the letter comes as legislators are crafting a budget plan at the Roundhouse for the fiscal year that starts in July.

The revenue uncertainty caused by the oil-drilling impacts of the federal orders has complicated that process, and state and legislative economists plan to update the state’s revenue outlook this week.

More than 40% of the state’s roughly $7 billion in general fund revenue comes from the oil and natural gas industries, a figure that has increased in recent years, despite attempts to diversify the state’s economy.