What now? New Mexico oil and gas looks to future under Biden's halt on land leasing

Oil and gas companies and industry supporters in southeast New Mexico continued to struggle for a path forward after President Joe Biden’s administration announced a series of executive actions aimed to address climate change by reducing fossil fuel development.

The day of Biden’s inauguration as President, Acting Interior Secretary Scott de la Vega announced the Department of the Interior suspended the authority of its sub-agencies such as the Bureau of Land Management to authorize oil and gas activities. Those activities include issuing leases and drilling permits.

And on Wednesday, the Biden administration issued an executive order that halted any new oil and gas leases on federal lands and waters.

More:New Mexico industry warns of dire impact as President Biden pauses oil and gas leasing

Half of New Mexico’s oil and gas development occurs on federal land, and the revenue from the industry accounted for up to a third of the state’s budget.

Reaction from fossil fuel developers and southeast New Mexico leaders was swift as opponents feared the recent actions could prove devastating to local economies that rely on oil and gas production.

Eddy County Manager Allen Davis said operators would be driven across the state line to Texas where most activity is on private land.

More:New Mexico business leaders wary as Biden expected to ban federal oil and gas leasing

Davis worried that oil and gas workers in Eddy and Lea counties could be laid off in the wake of the federal actions, and that the administrations refocus on renewable energy could be slow to replace the lost employment.

“We’ve already seen evidence of the impacts the 60-day moratorium on approvals has had. This announcement will certainly exacerbate the issue to where more work, jobs and companies will exit Eddy and Lea Counties in favor of pursuing their opportunity across the state line in Texas,” Davis said in a statement.

“The message couldn’t be more clear, southeast New Mexico is not business friendly for an industry that has sustained the State of New Mexico finances for decades.”

More:President Joe Biden halts oil and gas leases, permits on federal land and water

The Western Energy Alliance, a trade group representing oil companies throughout the American West took legal action in response to the order, filing a lawsuit against the Biden administration to overturn the order in the U.S. District Court in Wyoming, arguing the federal government lacked the authority to indefinitely suspend oil and gas leasing.

“The law is clear. Presidents don’t have authority to ban leasing on public lands,” said Alliance President Kathleen Sgamma.

“All Americans own the oil and natural gas beneath public lands, and Congress has directed them to be responsibly developed on their behalf. Drying up new leasing puts future development as well as existing projects at risk.”

More:New Mexico oil and gas leaders slam Biden's federal leasing halt as 'devastating' economy

New Mexico Gov. Michelle Lujan Grisham was unclear if she supported Biden’s actions, but argued climate change must be a priority of the federal administration shared by New Mexico. She said she planned to work closely with the President and his cabinet to review climate-related decisions and their impact on the state.

“Our administration is reviewing these orders to evaluate the scope of the impact they will have on our state and continue to be in close conversation with leaders in the industry,” Lujan Grisham said in a statement.

During a Wednesday news conference, Adrian Angulo, deputy director at the New Mexico Wildlife Federation, said the pause could provide time for regulators to re-evaluate public land use in New Mexico.

More:As he's sworn in as President, Joe Biden urged to get tough on oil and gas emissions

“In New Mexico we definitely have an opportunity to not only create state legislation that clamps down on bad actors, but I think on the federal landscape the pause is really just an opportunity to look at how we’re using our public lands,” he said.

“There’s no better place than the Permian Basin to show that when you allow the oil and gas industry to put such a stranglehold on rural communities, some of those other opportunities don’t get developed.”

Adrian Hedden can be reached at 575-628-5516, achedden@currentargus.com or @AdrianHedden on Twitter.