Drilling ban proposals divide Democrats in U.S. oil states
Send a link to a friend
[November 01, 2019]
By Valerie Volcovici
CARLSBAD, New Mexico (Reuters) - In the
southeast corner of New Mexico, new houses, hotels and jobs are
sprouting like flowers in the desert. Trucks hauling equipment and
laborers jam once-barren highways on the way to thousands of oil rigs.
The Democrats who control the state's government have lofty plans for
the billions of dollars in projected tax revenues from the drilling
industry in the Permian Basin, the world’s biggest oil field, starting
with an overhaul of New Mexico's ailing public education system. The
biggest threat to those plans, however, may be the presidential
candidates from their own party.
The top 10 Democratic contenders have called for ending new drilling
leases on federal lands. Two front-runners, Senators Elizabeth Warren
and Bernie Sanders, go much further with calls to ban hydraulic
fracturing - the technology driving the Permian oil boom - on both
federal and private land.
Such policies face resistance in western states with vibrant drilling
industries, including New Mexico and Colorado, where Democrats also
control both the governor's office and the legislature. That could open
up a rift within the party and an inroad into such states for Republican
President Donald Trump - the nation’s chief fossil-fuel booster - in
“Without the energy effort in this state, no one gets to make education
the top priority,” New Mexico Democratic Governor Michelle Lujan Grisham
told the New Mexico Oil and Gas Association conference in Santa Fe on
If Trump loses next year's election, she said in an interview, she would
request the Democratic president provide her state a waiver exempting it
from any drilling ban "to allow us to continue to produce in New
Nationwide, states received some $9 billion from public lands leases
last year, with much of it going to their education systems, according
to Department of Interior data. New Mexico was the top recipient with
$2.4 billion - an amount that doubled its 2017 revenues. Colorado
brought in about $500 million.
Conor Cahill, press secretary for Colorado’s Democratic Governor Jared
Polis, did not comment on Democratic candidates' proposals to limit
drilling, saying only that the governor looks forward to a “robust
debate" about the issue.
Democrats hope their tough anti-drilling stances will help them win
their party's nomination by attracting progressive voters in state
primary elections. But such rhetoric represents a risk in the general
election against Trump. About two-thirds of Americans want “aggressive”
action to combat climate change - but only if it doesn’t hit their
pocketbooks, according to a recent Reuters/Ipsos poll https://www.reuters.com/article/us-usa-election-climatechange/americans-demand-climate-action-reuters-poll-idUSKCN1TR15W.
The campaigns of Democratic front-runners Joe Biden, Elizabeth Warren,
Bernie Sanders, Kamala Harris and Pete Buttigieg, did not comment when
asked how they would weigh the concerns of western states against their
promises to ban or limit drilling. They have all said they can soften
the economic impact of fossil-fuel cutbacks with government programs to
retrain workers for clean-energy jobs.
Carlsbad is a hub of the New Mexico oil boom - a "bright spot" in one of
America's poorest states, said Carlsbad’s economic development chief
On the fringe of the Chihuahuan Desert, the fast-growing city of about
28,000 people has become the regional headquarters for oil majors such
as ConocoPhillips <COP.N> and home to the busiest regional office of the
U.S. Bureau of Land Management. About two-thirds of New Mexico’s
drilling takes place on federally-controlled land.
Last September, a lease sale in the area broke BLM records, generating
nearly $1 billion. Meanwhile, BLM officials in Carlsbad have struggled
to keep up with drilling permit applications: The bureau received 2,444
last year and approved 1,388.
Sarah Cottrell Propst, the state’s top energy official, said she
expected the boom would last for years if there’s no drilling ban. “The
industry is making huge investments in the Permian Basin,” she said.
Oil revenues have helped repair an education system after years of
underfunding. Last year, a district court ruled New Mexico had violated
its constitution by failing to provide students a “uniform statewide
system of free public schools sufficient for their education”.
More than $1 billion of the state's $2.4 billion in oil-and-gas revenue
goes to public schools, according to the nonprofit New Mexico Tax
Research Institute. Expecting another windfall this year, state
lawmakers approved a 16% increase in school spending to $3.3 billion, to
pay for a longer school year, higher teacher salaries, and increased
support for low-income districts.
[to top of second column]
An oil drilling rig operates in the Permian Basin in Lea County, New
Mexico, U.S., February 10, 2019. REUTERS/Nick Oxford/File Photo
Governor Lujan Grisham also announced plans for a scholarship
program, funded largely by oil and gas revenues, that would make the
state’s colleges free for anyone with a 2.5 grade point average - an
estimated 55,000 students.
Jessica Sanders, a science teacher in Rio Rancho, sees the impact in
her classroom, which until the recent improvement in funding lacked
basics such as enough writing implements, projectors and computers
“When people talk about shutting down the oil and gas industry, I
don’t think people are seeing how that will affect me and my
students,” she said.
Some in New Mexico worry that the environmental consequences of the
oil boom outweigh the benefits.
“The companies say, ‘We are giving you all the money.’ Well, I’m
sorry, that doesn’t matter when you are poisoned,” said Stephanie
Harmon, a Carlsbad resident who works as the chaplain for a
Recent reports by environmental groups including the Clean Air Task
Force and Earthworks, both of which oppose fossil fuels development,
found air pollutants around drilling sites, including from flared or
vented methane https://www.reuters.com/article/us-usa-shale-flaring/natural-gas-flaring-hits-record-high-in-first-quarter-in-us-permian-basin-idUSKCN1T5235,
have contributed to respiratory illness.
The Environmental Defense Fund, another environmental group,
estimates New Mexico’s oil and gas sites release more than a million
tons per year of methane, the climate equivalent of 22 coal-fired
power plants. It is a trend repeating itself in other drilling
states like North Dakota and Colorado.
The Lujan Grisham administration says it can be both an oil
producing state and environmental steward.
She said the state was investing to diversify its economy away from
oil and was seeking to meet the goals of the Paris Climate Agreement
by cutting overall emissions by 45% by 2030 from 2005 levels.
Her administration is also working on regulations to curb methane
emissions from the oil and gas industry. “The data we are looking at
today strongly suggests we can clean up 80% of the methane problem,”
Lujan Grisham said.
Her support for both drilling and cutting carbon emissions, however,
has put her in a complex position among her constituents. During her
speech at the Santa Fe oil conference in October, she told industry
representatives that the state’s regulators “work for you”, while
outside, more than two dozen protesters chanted "Whose side are you
One of them, 21-year-old college student Ruby Lopez, said Lujan
Grisham’s free college program would only prolong the state’s
dependence on fossil fuels. "We should not be beholden to oil and
gas for our education," she said.
Democrats swept New Mexico in the 2018 mid-term elections, winning
control of the governorship, the state legislature and the
congressional delegation. The state has not supported a Republican
presidential candidate since 2004.
Trump sees an opening to change that in 2020 because of Democrats'
climate rhetoric. During a rally in New Mexico in September, he
vowed to win the state and told his crowd that Democrats want to
"annihilate" the New Mexico economy with their anti-fossil fuels
proposals. Trump has also said he is targeting Colorado.
Political analysts say a Trump victory in New Mexico is unlikely.
But Lujan Grisham's predicament, they say, reflects the dangers
Democratic presidential hopefuls face nationally in balancing
environmental and economic concerns, particularly in drilling
That's particularly true in New Mexico, said Ben Shelton, the
political director of the progressive advocacy group New Mexico
“You can’t just come here and say, ‘Keep it in the ground’,” he
(Editing by Richard Valdmanis and Brian Thevenot; additional
reporting by Liz Hampton in Denver)
[© 2019 Thomson Reuters. All rights
Copyright 2019 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.