Heather Richards | E&E News | February 10, 2021

New Mexico — the largest federal oil producer in the country — is losing oil rigs to private lands in Texas because of industry confusion over Biden administration oil edicts, a state official said this week in a letter to the Interior Department asking for guidance.

Interior Department acting Secretary Scott de la Vega mandated last month that all fossil fuel leasing and permitting decisions on federal lands go through the agency's top brass for approval for 60 days, part of the climate-focused administration's attempt to review federal fossil fuel activities shortly after taking office.

The 60-day order from de la Vega was issued days before President Biden signed a climate change executive order that froze new oil and natural gas leases on public lands and waters as part of a larger evaluation of the program.

Even de la Vega's initial order sparked considerable pushback from oil-friendly lawmakers and many energy states, although New Mexico Gov. Michelle Lujan Grisham, a Democrat, has kept a moderate tone with the administration and expressed a desire to both make climate a priority and tend the state's oil and gas business.

However, in a letter yesterday, Sarah Cottrell Propst, chief of the New Mexico Energy, Minerals and Natural Resources Department, said the 60-day order — which reroutes final decisions like drilling approvals to D.C. leadership — has created confusion.

Propst wrote that the order has been interpreted to cover a host of local decisions that come after a permit is granted, such as those dealing with rights of way to move natural gas away from a drilling location rather than vent it or burn it off.

Propst said that the state supports Interior's "operational goals" but that the order "has resulted in on-the-ground uncertainties that undermine our ability to safeguard New Mexico's economy and environment."

She added, "We have seen rigs depart New Mexico for Texas simply because of the uncertainty caused by the Order."

Written guidance for the Bureau of Land Management personnel carrying out the order on the ground could clear up this confusion, she said, noting that oil and gas makes up a third of the state's operating budget and that about half its oil and gas wells are on federal land.

Interior declined to comment on the letter but has stressed in earlier statements that oil and gas operational approvals and permits continue to be processed and approved.

The order also drove Senate Energy and Natural Resources ranking member John Barrasso (R-Wyo.) to pen his own letter last week demanding records from Interior on how local permitting approvals have been handled so far, arguing that the implementation has not been uniform across states or fair to all operators.