Oil and gas drilling is a crucial financial driver for the state of New Mexico. In 2021, the industry contributed over one-third, or $2.9 billion, to the state budget. This money goes towards funding hospitals, schools, roads, bridges and other essential services in our local communities and tribes.
These days, the geopolitical and economic realities have been as harsh as in recent memory. Across the country everyday Americans are feeling the pressure, and nowhere more noticeably so than at the gas pump. Here in New Mexico, the statewide average price per gallon sits at $4.14 – a far cry from the $2.87 a gallon just one year ago.
The Biden Administration has pointed the finger at the oil and gas industry, claiming that despite a drop in oil prices in recent days, gas prices continue to stay high due to “price gouging” by the industry.
The reality is that the federal government has in recent months taken actions to weaken our mighty domestic oil and gas industries in a time when we need them most. Placing a moratorium on new oil and gas leases is proving to be a costly decision. In a time when our country and the rest of the world are seeking to lessen our dependence on foreign energy, we need policies that favor more domestic production—not less.
The Administration continues to tout the statistic of 9,000 unused federal leases across the country that oil and gas companies are sitting on. The reality is the process of going from lease approval to drilling is bureaucratic and slow. Many previously issued leases are tied up in litigation or regulatory disputes. And the reality is that some of the leased lands do not have the resources to make drilling financially viable.
The leasing situation is particularly relevant to New Mexico which, despite record oil production, remains disproportionately impacted relative to other states.