In compliance with a court order, the Bureau of Land Management (BLM) on June 30, 2022, held an oil and gas lease sale in New Mexico where oil and gas companies purchased rights to 521 acres of public lands – all five parcels that were made available.
The results of this lease sale make clear that the Department of the Interior’s (DOI) decision to increase the federal onshore royalty rate to 18.75 percent for this sale – an amount in line with the rates required for drilling on many states’ lands and in federal waters – is not an obstacle to leasing for oil and gas companies in New Mexico. Rather, implementing some of the many long-overdue federal oil and gas reforms in this sale is a critical step towards ensuring New Mexico’s taxpayers finally receive a fairer return for the use of our publicly-owned resources, and guaranteeing better stewardship of our public lands so that wildlife habitat, conservation, and recreation are given just as much priority as development.
In response, Jesse Deubel, executive director of the New Mexico Wildlife Federation, released the following statement:
“It’s clear that the oil and gas industry wasn’t deterred by the increased federal royalty rate for the leases sold in New Mexico today – a rate that matches the one oil and gas drillers have already been paying to develop on our state lands for years. This important change to the federal oil and gas leasing program, along with a host of other crucial reforms, won’t affect industry’s interest in leasing, but they will help protect our wildlife and ensure New Mexicans receive their fair share for resources developed on our public lands. It’s time for the Biden administration and Congress to finally bring the federal oil and gas leasing system into the 21st century by making these changes permanent, before any further leasing takes place.”
This was the first onshore oil and gas lease sale the Biden administration has held in New Mexico, and it reflects some of the recommendations made in DOI’s report on the flawed and antiquated federal oil and gas program which echoed what we already knew to be true – that the federal oil and gas leasing system does not currently benefit the American people and is in need of immediate and significant reform.
Some of the specific recommendations that were incorporated into this lease sale include: raising the federal royalty rate to 18.75 percent, limiting leasing to areas near existing development to reduce speculation, and avoiding offering any parcels in areas that hold cultural significance or are within important habitat and migration corridors.
While President Biden and Interior Secretary Deb Haaland work to make these reforms permanent, Congress also has tools at its disposal to reform the antiquated federal oil and gas program.
Members of New Mexico’s congressional delegation already have taken steps toward enacting legislation that will ensure our leasing system works better for everyone.
In the Senate, U.S. Senator Martin Heinrich (D-NM) co-sponsored the the Oil and Gas Bonding Reform and Orphaned Well Remediation Act to address the federal orphaned well crisis, and co-sponsored the Competitive Onshore Mineral Policy via Eliminating Taxpayer-Enabled Speculation Act (COMPETES Act) to end noncompetitive leasing.
In the House, U.S. Rep. Teresa Leger-Fernandez (D-NM) introduced the Orphaned Well Cleanup and Jobs Act which would reform the leasing system by updating decades-old federal bonding rates to ensure oil and gas companies, not taxpayers, foot the bill for cleaning up the wells they drill on public lands. ###