Oil and gas industry and environmentalists at odds over BLM sale of lands


The government’s plan to sell more public lands to the oil and gas industry in New Mexico still has people at odds—environmentalists are against it while industry leaders say it will put oil and gas operators in a better financial position.

The federal Bureau of Land Management (BLM)has proposed a lease sale of about 3,263 acres of public lands in New Mexico, Oklahoma and Texas, with most of the sale occurring in southeast New Mexico’s Permian Basin region reported the Carlsbad Current Argus.

The BLM also planned to sell leases to about 45,445 acres of federal land also in southeast New Mexico to the oil and gas industry – a sale that was postponed in May due to difficulties associated with the pandemic.

At its last lease sale, the BLM sold about 17,024 acres of federal land to oil and gas operators in its Feb. 6 sale, on 68 parcels in New Mexico and Oklahoma.

The sale raised about $20.4 million, with the highest per-acre bid going to Federal Abstract Company at $31,680 per acre for about 321 acres in Eddy County.

But Jesse Prentice-Dunn, policy director for the Center for Western Priorities, said the same market and public health problems that led to the May sale’s postponement were still present in August and that the lease sales should be delayed further.

“Holding that sale just makes no sense,” Prentice-Dunn said. “The industry is in freefall and it’s not like the industry has a lack of mineral rights to drill on. It’s really bad for the taxpayer. These are public mineral rights and should be leased responsibly.”

Prentice-Dunn argued that as the market struggled with low oil prices and shrinking rig counts – New Mexico was reported to have its lowest count of the year this month at about 45 reported on Friday compared with 111 a year ago – oil companies would offer significantly lower bids.

Oil and gas lease sales should be discontinued, he said, until the market recovers, and New Mexico taxpayers can get a fair rate for public land.

“They’ve already postponed lease sales earlier this year due to market conditions,” Prentice-Dunn said. “They should do that again. Bidding is likely to be depressed compared to what it was during a more robust time in the market.”

But Robert McEntyre, spokesman for the New Mexico Oil and Gas Association, said the long-term return for leases of public land to the extraction industry would remain solid despite the market’s recent downturn.

He said that when the market recovers, producers will be able to better develop oil and gas resources using the leases acquired during the bust and generate more revenue for the state to counteract any potentially lower-than-normal bids.

“When the industry is in a downturn, these resources will continue to be there,” McEntyre said. “Developing our federal resources is not only good for New Mexico, it allows companies to create significant revenue for the state. Ensuring the BLM holds regular lease sales is important to our economy and our future.”

Source: Carlsbad Current Argus