Adrian Hedden
El Rito Media
achedden@currentargus.com

A sale of leases to the oil and gas industry for federal public land in Eddy County brought in $20 million on Feb. 20, as the federal government aims to increase fossil fuel production throughout the U.S.

The lease sale held by the Bureau of Land Management offered parcels of land in New Mexico’s southeast corner amid the Permian Basin oilfields – the most productive oil and gas basin in the U.S.

A total of about $20.7 million was received during the auction for leases that will remain in effect for 10 years or as long as oil or gas is produced.

All seven of the offered parcels were bid on and set to be leased, totaling 1,317 acres in Eddy and Lea counties. About 1,238 of those acres – six of the seven parcels – were in Eddy County while a single parcel on 79 acres was offered in Lea County.

Leasing the parcels, which are nominated by oil and gas companies, is the first step toward development on public land, which also requires applications to permit drilling and subsequent environmental analysis before applications are approved.

In a statement released with the sale results, the bureau said the leases help fulfill the federal administration’s agenda of increasing domestic fossil fuel production following an executive order issued in January by President Donald Trump.

“Oil and gas lease sales support domestic energy production and American energy independence, while contributing to the nation’s economic and military security,” read the statement.

But fossil fuel trade groups argued the agency should have offered more land for production in the highly sought-after Permian Basin. The parcels provided in the sale were chosen during the previous administration, and the Western Energy Alliance voiced frustration at the low amount of land offered.

“The amount of acreage offered for sale in New Mexico is below demand, as indicated by the minimal number of parcels and acreage listed, and our members’ frustrations with waiting years for parcels to be made available,” read a protest letter submitted to the bureau by the Alliance on Dec. 9, 2024.

Conservation groups protested the sale for different reasons. A joint letter submitted by the Western Environmental Law Center, Wild Earth Guardians, the Center for Biological Diversity and Sierra Club’s Rio Grande Chapter said the bureau should pause oil and gas leases until a full environmental analysis is completed.

The groups argued the agency should analyze the effects of drilling on air and water quality ahead of leasing, as opposed to the process of doing so when applications to permit drilling are submitted after the land is leased.

The Department of Interior, the bureau’s parent agency, should also take steps, the groups argued, to limit air pollution emissions that could cause global warming above 1.5 degrees Celsius – an international benchmark when scientists believe catastrophic weather events could occur.

The groups contended a review of the leases “must include meaningful consideration of alternatives that could allow the Department of Interior to fulfill its role in putting the nation on a path towards an emissions future compatible with limiting warming to 1.5°C and mitigating the worst effects of global climate change.”

Despite environmental concerns, U.S. oil development on public land is a critical facet of the nation’s economy, argued economic nonprofit Taxpayers for Common Sense. The group called on recently appointed Interior Secretary Doug Burgum to maintain a higher royalty rate enacted by the administration of former President Joe Biden, amid discussions Trump could roll it back.

The bureau receives a 16.67% royalty rate paid by lessees on the proceeds from oil and gas sales. The rate was increased from 12.5% in April 2024 .

The taxpayers group noted in a Feb. 20 report that the average bid of $15,673 per acre in the latest lease sale in New Mexico was four times higher than the average bid for sales in 2024 in the state. This showed that lands needed for oil and gas were increasing in value and returns for. American taxpayers should increase accordingly, the group argued,

“With U.S. oil production already at record highs and industry executives signaling they aren’t looking to expand domestic production further, there’s no justification for undermining fiscal responsibility or handing over America’s natural resources to pad the pockets of speculators,” said Taxpayers for Common Sense President Steve Ellis.