Language Icon

Albuquerque Journal: Undermining the energy industry weakens NM, schools


It has been a little over one month since President Biden officially announced a moratorium of new leases for oil and gas development on federal lands, and New Mexicans are already starting to feel the impact.

Our state, which is over one-third federal land, has uniquely benefitted from the ability of the energy industry to develop oil and gas resources on lands administered by the Bureau of Land Management. Last year alone proceeds to New Mexico from drilling on federal land totaled $707 million – the most of any state in the country – and accounted for nearly 10% of the state’s total budget.

While this current ban of new oil and gas leases is currently framed as a pause – the executive order is ostensibly supposed to last one year for a moratorium on new leases on federal lands and waters – this order could be the prelude to a more permanent ban. Such a ban would be devastating for New Mexico.

A recent analysis from the American Petroleum Institute found if the federal leasing ban is made permanent, New Mexico could lose 62,000 jobs by 2022 and $1.1 billion in state revenue could be at risk. That is largely because state oil production on federal, state and private lands could fall by as much as 70% in two years, according to one estimate by economists from the New Mexico Legislative Finance Committee, as energy companies are forced to move their drilling rigs and the jobs they create to out of state to drilling sites with much less regulatory uncertainty.

In fact, the negative effects of even the 60-day ban are already being felt by New Mexicans, and the uncertainties in budgeting it has created threatens to cancel important new programs. New Mexico is already expected to lose $12 million in 2021 from cancelled federal lease sales, and that number will only grow the longer private companies are cut off from developing energy on federal lands.

Long-term, our state’s already struggling educational system will likely feel the impact of this decision most significantly. Recently enacted legislation to increase teacher pay and boost the New Mexico Opportunity Scholarship will likely be impossible to fund without oil and gas revenue. Similarly, increases in school spending and to the state’s contribution to a retirement fund for public education employees has been cast into doubt as lawmakers, such as myself, grapple with an uncertain financial future and long-term spending commitments.

That’s why 2019 New Mexico Teacher of the Year Jessica Sanders recently remarked that “New Mexico’s oil and gas industry not only provides critical funding for education, but they provide future career opportunities for our students.” The Biden administration should keep sentiments like this in mind as they consider the unintended consequences of a leasing ban and threaten to shut off this important source of funding to our schools.

Fortunately, there are several ways to prevent the worst from happening. While the best solution would be for the Biden administration to allow federal lease sales to restart after this one-year moratorium expires or better yet rescind the order altogether, a legislative fix is also in the works. Congresswoman Yvette Herrell, D-N.M., has proposed legislation that would exempt oil and gas development on federal lands in New Mexico from the Biden administration’s proposed moratorium.

This is an idea Gov. Michelle Lujan Grisham floated as early as 2019 … Regardless, her previous comments show that despite her very public embrace of green energy initiatives, the governor is also mindful of her campaign pledges to fix public education and knows how important the revenues from oil and gas leasing on federal lands are to realizing that goal.

Discussions of permanent bans of oil and gas leasing on federal lands have left the state of New Mexico, and its educational system, at an important crossroads. Our state has benefitted significantly from these revenues and stands to lose a lot should they be taken away. As President Biden weighs any further actions with regard to leasing bans, I hope he will take this potential collateral damage into account and base his future decisions accordingly.

Rep. Kelly Fajardo is the co-founder of RISE New Mexico.

Read full editorial here.