Two of the U.S. Senate’s most enthusiastic supporters of the Green New Deal, at the center of which is the removal of fossil fuels as a source of American energy, are having second thoughts about the Biden administration’s determination to go full-speed-ahead into a glorious green future.
To kudos from environmentalists, Democratic lawmakers, and purveyors of wind and solar energy, President Biden in January announced a suspension of oil and gas drilling on federal lands. The pause is supposed to remain in effect until federal authorities can conduct a thorough “review and reconsideration” of the climate impact of “oil and gas activities.”
This should be exactly what climate warriors such as New Mexico Democratic Sens. Martin Heinrich and Ben Ray Lujan want. But instead, they have hit the panic button, imploring administration officials not to extend the suspension. Their misgivings were laid out in a recent letter to White House climate czarina Gina McCarthy.
“We write to follow up on President Biden’s Executive Order 14008 addressing the climate crisis,” they wrote. Having paying obeisance to acceptable rhetoric with their reference to the “climate crisis,” the two senators turn their attention to a real crisis facing their state. After they grovelingly acknowledge that a short-term leasing “pause is fully appropriate in the new Biden administration,” they hastened to add: “An extended and indefinite suspension would have significant impacts on our workforce and state funding for education and creates unnecessary uncertainty for New Mexico’s state and local budgets.”
If anything, saying an extended suspension of drilling on the state’s federal lands would have “significant impacts” is an understatement. “In New Mexico, the industry employs more than 100,000 residents with annual employee salaries averaging more than $71,000,” the Washington Times reported (March 12). “Even more notably. oil and gas revenues made up more than $3.1 billion in tax revenue – 39% of the state’s budget – in 2020.”
A State in Dire Straights
It must not have escaped the two senators’ attention that oil and gas companies operating in New Mexico’s hydrocarbon-rich Permian Basin are already dismantling their rigs and moving east to West Texas, where the land in the Permian Basin is privately owned. They also appear to be under no illusions that their beloved wind turbines and solar panels are going to ride to the rescue of their beleaguered constituents. And it doesn’t help matters that Biden’s pick to be the next interior secretary, Democratic Rep. Deb Haaland of New Mexico no less has said that “it would be great to stop all gas and oil leasing on federal and public lands.”
Knowing that New Mexico is in no position to withstand the loss of its oil and gas industry, the two lawmakers have signed on to bipartisan legislation that would make oil and gas leasing on federal land more attractive to government, adding incentives for Biden to lift the ban. Sponsored by Republican Sen. Chuck Grassley of Iowa and Democratic Sen. Jacky Rosen of Nevada, the bill would raise the royalty energy companies must pay the government for the right to drill on public land from 12.5% to 18.75%. It would also mandate that the minimum bidding price for federal leases would rise from $2 per acre to $10 per acre.
Raising the royalty rates may make drilling on federal land more attractive to the administration. But it could just as easily encourage drillers to focus their efforts on private land. Indeed, this may be why many Democratic senators support the bill; it would reduce drilling on federal land.
Betting on Handouts
If the royalty legislation doesn’t pass or doesn’t pan out if it is enacted, there is also Plan B: handouts. In a separate letter to Interior Acting Secretary Scott de la Vega, the two New Mexico senators asked that routine drilling permits be allowed to continue. As reported by the Wall Street Journal (March 12), they also asked that “states like New Mexico receive robust federal assistance in the on-going transition to a zero-carbon economy.”
A first step in this direction was taken when Sen. Ron Wyden (D-Ore.) inserted a provision in the recently passed $1.9 trillion stimulus bill creating a $2 billion slush fund for communities in which there has been “a negative revenue impact due to the implementation” of federal policies. As the Journal noted: “First do economic and social harm, then dole out taxpayer cash to sooth the pain.”
This will put communities in New Mexico and elsewhere on the federal dole but will provide no opportunities for the people living there to improve their livelihoods. As for New Mexico, matters are quite simple: Minus the oil and gas industry, the place will become a basket case. But maybe that’s exactly what the green left wants.