The upcoming confirmation hearing for Rep. Deb Haaland (D-N.M.) to serve as Interior Secretary will put the spotlight on the Biden Administration’s bans on oil and natural gas leasing and permitting on federal lands.
“If I had my way, it’d be great to stop all gas and oil leasing on federal and public lands because those lands belong to all of us; they don’t just belong to one sector.” (emphasis added)
In 2019, Rep. Haaland said:
“I am wholeheartedly against fracking and drilling on public lands.” (emphasis added)
Rep. Haaland, a supporter of the Green New Deal, has received support for her nomination from fringe Democrats and environmental activist groups who oppose fossil fuels and want a fracking ban extended nationwide.
Energy In Depth has discussed the negative economic, energy security, budgetary, and environmental effects a ban on federal lands would have for the United States and how the policy has attracted bipartisan criticism.
Here are some key questions that Rep. Haaland may have to consider at her confirmation hearing:
Will Rep. Haaland support exemptions from current or future orders that would limit or ban oil and gas development on federal lands and waters, or does she disagree with New Mexico’s governor on this?
New Mexico Gov. Michelle Lujan Grisham (D) has praised the energy industry’s contribution to the state’s economy and budget and has previously said she would seek an exemption from a federal leasing ban. Efforts are underway by Rep. Yvette Herrell (R) and also in the state legislature to get New Mexico exempted from the orders.
Also, soon after the Biden Administration announced the ban, tribes protested against a violation of their sovereignty and pleaded to be allowed to develop resources on their lands. As a result, they were granted an exemption from the administration’s permitting order and included as an exemption in the leasing order that followed.
Is the second largest revenue stream for the federal government worth protecting?
Oil and natural gas development on federal and Native American lands and waters generated $9.5 billion in revenue for the U.S. government in 2019. According to the Bureau of Land Management:
“The amount of annual revenue that Federal mineral development provides to the U.S. Treasury is second only to that provided by the Internal Revenue Service.”
Currently oil and gas revenue generated from federal waters is one of the largest funding sources for federal land acquisition, maintenance, conservation and preservation. Will taxpayers now be expected to foot the bill?
The Land and Water Conservation Fund is a dedicated funding source for the preservation and development of outdoor public recreation areas and to ensure that Americans have access to them. According to DOI, LWCF is “funded by revenue from offshore oil and gas leases.” In fact, it’s funded almost entirely by Gulf of Mexico oil and gas production and receives no tax revenue contributions. This has translated to about $3.9 billion and more than 49,000 projects across the country since LWCF’s inception in 1965. Examples of projects include everything from the purchase of new federal lands and waters to creating and expanding nature trails, rehabilitating urban parks, preserving historic sites and conserving wildlife habitats. Oil and gas royalties from federal lands development are also used to pay down the National Park Service’s estimated $12 billion maintenance backlog.
Rep. Haaland is a supporter of the “30 By 30” plan – a plan to ban development on 30 percent of all land and water in the United States by 2030. But in order to achieve this, the federal government will need to purchase acreage about the size of Texas and California combined – an extraordinary feat even when the LWCF is well-funded by oil and gas revenue. Currently, the federal government owns about 28 percent of U.S. land and about 12 percent of that is considered part of a conservation land area.
How will Rep. Haaland guarantee that the workers who lose jobs from a ban on federal leasing – particularly the Hispanic workers and people of color in places like New Mexico, Louisiana and Texas – will have jobs in renewable energy that pay the same salary and benefits?
During the campaign, then-candidate Biden’s climate plan clearly stated: “We’re not going to leave any workers or communities behind,” and Rep. Haaland supports the Green New Deal which promises “to achieve net-zero greenhouse gas emissions through a fair and just transition for all communities and workers.”
Despite this talk of a “just transition,” the Keystone XL pipeline decision that Rep. Haaland has supported eliminated thousands of jobs on day one of the Biden presidency, and the federal lands orders have jeopardized more than 345,000 offshore-supported jobs and hundreds of thousands onshore, as well. In Rep. Haaland’s home state of New Mexico alone these orders put 62,000 workers’ livelihoods at risk.
How does Rep. Haaland propose to fund GOMESA and other federal conservation programs without Gulf of Mexico revenue?
Gov. John Bel Edwards of Louisiana, a Democrat, has expressed concern over losing critical funding for coastal restoration projects in Louisiana and other Gulf Coast states as a direct result of the leasing ban. The Gulf of Mexico Energy Security Act – a revenue-sharing model for oil- and gas-producing Gulf states – is revenue generated from Gulf of Mexico oil and gas development. In FY2020, GOMESA distributed more than $350 million to Alabama, Louisiana, Mississippi, Texas and individual counties within these states for coastal conservation, restoration and hurricane protection in these states.
Underserved communities across the country also benefit directly from oil and gas royalties on federal lands and waters, predominantly from Gulf of Mexico production. The Outdoor Recreation Legacy Partnership has been used to plan, build and enhance parks and other outdoor recreation facilities in more than 30 cities across the country including in Denver, Portland, Madison, Camden, Atlanta and Minneapolis.
The impacts of a federal leasing ban on Rep. Haaland’s home state of New Mexico are estimated to be severe and far-reaching. Does Rep. Haaland understand the full extent of these actions?
According to an analysis from the New Mexico Tax Research Institute, Oil and natural gas development on federal lands generated $1.5 billion in state revenue – accounting for nearly 18 percent of the state’s total spending – in fiscal year 2020. This includes $734 million in public education funding.
Additionally, the Chairman of the New Mexico Senate Finance Committee, George Munoz, a Democrat, recently wrote to the Biden Administration that the ban would reduce tax revenue by nearly $1 billion over the next two years.
There are an estimated 62,000 direct and indirect jobs that are at risk from the federal leasing ban, and the state’s oil and gas regulator is concerned that permitting delays could increase emissions from flaring in the New Mexico portion of the Permian.
All of these impacts leave several questions that should be answered to demonstrate she understands the concerns and has solutions:
- What does Rep. Haaland believe is the value of oil and gas production on federal lands, particularly for her home state of New Mexico?
- What is Rep. Haaland’s plan to make up the $1.5 billion in lost revenue – which is 18 percent of all state spending – as a result of a federal leasing ban?
- Does Rep. Haaland disagree with Munoz and other state legislator’ impact estimates?
- New Mexico currently ranks third from the bottom (48th place) of the best states for business, according to Forbes. Will a ban on federal leasing improve that ranking?
- How will Rep. Haaland address the environmental concerns resulting from these and future orders?
- How many of the public schools in New Mexico get revenue from oil and gas?
- What guarantees will Rep. Haaland give New Mexico’s teachers, who have fought their way through the pandemic, that they won’t have fewer resources thanks to Biden’s policy?
This post appeared first on Energy In Depth.