U.S. Chamber: Drilling ban on fed lands costly

James Fenton
Travis Allen, left, Basin Well Logging & Perforating supervisor, and Susan Alvillar, WPX community affairs representative, discuss operations at a WPX Energy fracking site at Turtle Mountain  in Lybrook last year.

FARMINGTON — New Mexico could lose thousands of jobs and nearly a half-billion in annual royalty revenue if fossil fuel extraction on public lands is banned, according to a report issued this week by the U.S. Chamber of Commerce's Institute for 21st Century Energy.

The first in the group's Energy Accountability Series, the report released Wednesday said if energy proposals by Democratic politicians and interest groups were enacted, $11.3 billion in annual royalties, 380,000 jobs, and $70 billion in annual gross domestic product in the U.S. would be lost.

The Institute for 21st Century Energy is the energy policy arm of the U.S. chamber, the world’s largest business organization with more than 3 million members.

The new report cites the environmental "keep it in the ground' movement and Democratic politicians' proposals as potential risks to oil, natural gas and coal production. The energy institute complied data on jobs, royalties and production levels related to industry activity on federal lands. It also used macro-economic modeling software called IMPLAN for economic impact estimates, according to the group's report.

The report also included analyses of potential impacts posed by stopping new drilling leases while leaving existing ones in place. That possibility, according to the report, could wipe away $6 billion in revenues nationally over the next 15 years and nearly 270,000 U.S. jobs.

Karen Harbert, president and CEO of the chamber group, said in a press release that anti-fossil fuels actions could especially impact fossil fuels-rich states like New Mexico.

“New Mexico voters deserve to understand the real world impacts of the proposals that candidates and their allies make,” Harbert said in the release. “Their proposals will have a direct, harmful effect on New Mexico’s economy and quality of life.”

Forty-two percent of crude oil and 62 percent of natural gas production come from public lands in New Mexico, Harbert said.

Tom Mullins, engineering manager of Synergy Operating LLC and president of the Independent Petroleum Association of New Mexico, said that efforts to curb or cut oil and gas production undercuts local and state budgets, which in turn puts programs and services in jeopardy.

“New Mexico’s economy is directly connected to responsible minerals extraction on federal lands," Mullins said. "The ‘keep it in the ground’ movement continues to needlessly punish teachers and school children who depend upon federal royalties and taxes paid by the oil and gas industry."

Tim Ream of Santa Fe-based WildEarth Guardians said that perspective is short-sighted. New Mexico, he said, should transition toward jobs and energy from renewables.

"New Mexico needs to leave behind the toxic, boom-and-bust job cycles of oil and gas and replace them with good, clean, solar ... jobs that don't go away at the whim of Saudi oil ministers," Ream said. "And really, New Mexico doesn't have a choice. With record fires and floods plaguing the U.S., people understand that we must address climate change. Fossil fuels have to stay in the ground and that starts on our public lands. Solar, wind and batteries are going to replace coal, oil, and gas. New Mexico can get in the race for these new clean energy jobs and be a solar leader or try to cling to the past and watch its economy die like the coal industry."

John Roe, engineering manager of Dugan Production Corp., said he doesn't deny climate change exists, but proof it's solely caused by human activity is pure supposition.

'I’m damn glad there’s climate change," Roe said. "If there wasn’t, there’d be an ice cap right here in Farmington."

George Sharpe, investment manager with Merrion Oil and Gas Co., said the push to renewable energy is premature.

"The world is not yet ready to live solely on wind and solar," Sharpe said. "Not now. Not anytime soon. In the meantime, like it or not, (Leonardo) DiCaprio will be using jet fuel to get to those 'keep it in the ground' rallies."

James Fenton is the business editor of The Daily Times. He can be reached at 505-564-4621.