Public lands are an invaluable source of revenue and recreation for communities across the West. In New Mexico, we are blessed with a plethora of iconic places, including Chaco Culture National Historical Park and Aztec Ruins National Monument here in my own backyard. These places draw millions of visitors to New Mexico each year, with outdoor recreation providing over 99,000 direct jobs and generating $9.9 billion in annual consumer spending. Notably, public lands have provided our state with a sustainable source of revenue during the COVID-19 pandemic.
Despite the essential economic and cultural role of public lands in New Mexico, former Secretary of the Interior David Bernhardt did everything within his power to turn them over to oil and gas companies. In the past six months alone, he oversaw oil and gas lease sales on more than 1.6 million acres of public lands across the West, including lands on the doorstep of Carlsbad Caverns National Park. And he did so as our communities are still struggling with the social and economic costs of the COVID-19 pandemic and despite minimal interest from the oil industry and deflated oil prices.
The Trump administration was able to get away with this because our federal oil and gas leasing system is terribly out of date and unsuited to the needs of 21st century America. Its obsolete rates and emphasis on development over protecting our communities, wildlife and water let the outgoing administration put oil and gas CEOs first at the public’s expense.
One major consequence of this industry-first system is the rise of abandoned oil wells. These wells can threaten our families’ health by contaminating our drinking water and leaking dangerous methane pollution into our air. Bonds put down by companies before drilling are supposed to cover the cost of cleaning up these wells. But because the federal rules that determine the size of these bonds have not been updated in decades, taxpayers are facing millions, if not billions, in cleanup costs. In New Mexico, the state estimates that it will cost over $3 billion to clean up the 136,000 wells that are found throughout our state, many of which are located on federal land. Yet, the Government Accountability Office estimates the Bureau of Land Management has collected an average of just over $2,000 per well from oil companies to reclaim abandoned wells. With cleanup costs in New Mexico averaging around $35,000 per well, this outdated system is not only threatening the health and well-being of our communities, but it’s shifting costs that should be borne by oil companies onto New Mexico’s taxpayers.
Furthermore, the federal royalty rate – the amount that companies have to pay for the privilege of producing oil and gas from federal public land – has not been updated in more than a century. As a consequence, it’s estimated that New Mexicans lost out on $2.5 billion in revenue over the last decade. This is money that should have gone toward funding our schools and hospitals, updating our public infrastructure, and protecting our clean air and water that instead went to oil and gas CEOs.
Communities like Aztec can no longer afford a leasing system that prioritizes oil and gas CEOs’ profits above our own families’ health, safety and economic well-being. Fortunately, the Biden administration has the opportunity to reverse course and reform the federal leasing system. The first step, taken by Biden on Wednesday, was to call a time out – so that no more leases are issued with outdated royalty rates or to companies that cannot afford to clean up their wells. Now the new administration can begin the process of reforming the leasing system. For guidance, it can look to several oil and gas reform bills that were introduced in the last Congress. This includes legislation from Sen. Michael Bennet, D-Colo., that would modernize federal oil and gas bonding rates to ensure oil companies – and not taxpayers – are paying to clean up abandoned wells, and bipartisan legislation from New Mexico’s former Sen. Tom Udall and Iowa’s Sen. Charles Grassley to update royalty and other fiscal rates and deliver urgently needed funds to our communities.
We now have a unique opportunity to chart a different path for our magnificent public lands, one that supports our state’s effort to diversify its economy and puts the needs of our communities, wildlife and waters first. As a public servant, I thank President Biden for taking a time out on new leasing and am hopeful his administration will move forward with long-overdue reforms to the federal oil and gas leasing system.