By James Jimenez
October 27, 2020

We all love a little scare at Halloween, but what the Trump Administration has cooked up for this October will be truly frightening. What’s more, it’s a treat for the oil and gas industry and a trick for the rest of us. This upcoming house of horrors is an oil and gas lease sale to be held by Interior Secretary David Bernhardt. This weeks’ sale of leases for more than 7,000 acres of public lands in the Carlsbad area is fiscally irresponsible as all evidence points to it being a bargain basement giveaway to oil companies at the expense of taxpayers, public lands, and our children’s futures. Secretary Bernhardt knows all this but he is moving forward regardless. 

It is indisputable that the COVID-19 pandemic, overproduction, and a changing marketplace have damaged the oil and gas industry, so much so that companies are not using the leases they currently have. Yet, the Administration is acting like nothing has changed – which means the federal government will get far less than it should for the leases under consideration. And that means New Mexico’s share of the revenue will also be lower than it should be.

The Bureau of Land Management (BLM) holds quarterly lease sales and, so far in 2020, the results have been middling at best. BLM’s first sale of the year in New Mexico, in February, saw an average bid far lower than typical at $1,386 per acre. Even worse, the last sale in August saw a paltry average of just $170 per acre. The lease sale planned for May was postponed because it was unlikely to be profitable due to market conditions.

These poor results have a real impact on families in New Mexico. Half of all revenues generated by lease sales go to the state to reinvest in our communities. During the pandemic – when our state is forecasted to have massive revenue shortfalls – we cannot afford to lease our public lands while prices are at such low levels. When companies get these rock-bottom deals, we get fewer resources to fund our schools and ensure families have access to the health care they desperately need right now. This also reinforces the fact that New Mexico must diversify its economy, so we are no longer tied to the boom-and-bust cycle of the oil market.

The fact is the entire federal leasing system is dramatically outdated and in need of wholesale reform. Look no further than BLM’s New Mexico sale in August to see why someone with no experience in oil and gas development – was able to snatch up a third of the leases offered for next to nothing. 

The successful bidder was able to do this because the system allows speculators to pick up lands for as little as $2 per acre – even when they have little apparent ability or interest in developing them. Legitimate oil companies were not interested in leasing these lands, yet the administration moved forward with the sale anyway, creating a perfect opportunity for a speculator. The bidder even admitted as much, saying “nobody is buying now so there is no competition.”

In reality, though, the bidders are not the problem. The BLM has significant problems throughout its leasing process, which have been exacerbated by this Administration. It is just common sense that the federal government should not be leasing lands to folks who will not use them for their full potential, thus undercutting communities and our state budget. It should not take a situation as ridiculous as this one to demonstrate how broken this system is, and for decision-makers like Secretary Bernhardt to take steps to reform the system, which he has flatly refused to do.

Leasing public lands at fire-sale prices threatens funding for critical our schools, hospitals, and programs that help families make ends meet. This is irresponsible behavior and must end now. Secretary Bernhardt should cancel the October sale and commit to working with Congress to pass bipartisan reforms to the federal leasing system to get the highest value for New Mexico residents. 

James Jimenez is the Executive Director of New Mexico Voices for Children.