New Mexico’s Billion-Dollar Lease Sale Leads 3rd Quarter BLM Results
New Mexico’s 3rd quarter oil and gas lease sales for parcels on lands overseen by the Bureau of Land Management drew nearly $1 billion in competitive bids last week, driving the bureau’s quarterly lease sales to record heights.
“[T]he Bureau of Land Management’s (BLM) third-quarter oil and gas lease sale in New Mexico broke all previous records by grossing nearly $1 billion in bonus bids for 142 parcels. The two-day sale brought in more revenue than all BLM oil and gas sales in 2017 combined, and surpassed BLM’s previous best sales year,” DOI said in a statement.
Total revenue from the sale totaled $972,483,619.50, according to DOI.
“The results of this sale show the success that comes with sound energy policy that seeks to use working public lands to ensure reliable energy sources and job growth opportunities,” said BLM Deputy Director for Policy and Programs Brian Steed in a statement. Steed said this was a great example of the “multiple-use mission that ensures opportunities for commercial, recreational, and conservation activities on healthy and productive public lands.”
Nearly half of the $972 million—or forty-eight percent of the revenue from lease sales—will go directly to New Mexico’s coffers, with the rest will go to the U.S. Treasury, according to DOI.
“The people of New Mexico will see about a half a billion dollars of this right back into their roads, schools and public services,” said Interior Secretary Ryan Zinke. “This historic lease sale shows what is possible when we leverage the vast natural resources we have in our country, using innovation, best science, and best practices. We can ensure reliable, safe, abundant, and affordable energy for all Americans, and New Mexico is a centerpiece of our all-of-the-above energy future.”
If the leases go on to producing oil or gas wells, further revenue from any royalties based on that production will also go to the state, according to the agency.
The two-day sale of parcels in southeastern New Mexico was conducted by the Carlsbad Field Office and held online. The New Mexico sale exceeded the previous one-year record haul from 2008, when BLM drew nearly $409 million. According to Interior records, the first day of the September quarterly sale produced nearly $386 million, more than the take for all BLM lease sales in 2017 combined. Last year, quarterly lease sales for oil and gas drew approximately $358 million.
New Mexico also broke the national records it held for single parcel record sale and record per-acre bid in the sale last week. A 1,240-acre parcel in Eddy County sold for $101.5 million, or $81,889 per acre, beating a September 2016 record. That figure more than doubled the previous per-acre bid set just last December, which stood at $40,001.
The online sales are conducted by EnergyNet.com. The company has been the exclusive provider of online sales for BLM since last year, when concerns over protests, sabotage, and sales delays prompted the bureau to move its quarterly oil and gas lease sales online. Protesters opposed to the sales had used a variety of tactics to stall and delay the sales, and created security concerns at previous in-person sales.
Arizona, Colorado, Montana, and Utah also held BLM lease sales in the past week. While drawing nowhere near the revenue seen in New Mexico’s Permian Basin, according to EnergyNet, Colorado and Utah both received more than $3 million in competitive bids each. Colorado’s lease sale included 20 parcels covering more than 8,000 acres receiving bids, while Utah had 69 parcels covering nearly 134,000 acres.
Montana picked up a little more than $204,000 on 25 parcels covering 12,192 acres, while Arizona drew a modest $6,080 for 3,040 acres on just two parcels.
BLM Wyoming will offer 348 parcels and 353,220 acres in its three-day online sale next beginning next week on September 18.
New Mexico Boom
U.S Rep. Michelle Lujan Grisham (D-N.M.) and gubernatorial candidate sang the praises for the state’s oil and gas producers, rejecting the more extreme members of her own party in an extensive interview with the Albuquerque Journal in July.
“We’re the third-largest oil producer in the country. I’m (as governor) going to get a benefit from that,” Lujan Grisham said.
For those opposed to oil and gas—and the revenue it brings to New Mexico—the Democrat was emphatic.
“They’ve lost their minds,” she said.
“I don’t believe everyone in oil and gas wants to pollute and kill the environment. Instead of having a conversation about banning oil and gas, why don’t we fix the methane leak problem?” Lujan Grisham said.
Opposition to developing the state’s vast natural resource wealth, especially in Lea and Eddy counties in the Permian Basin, located in the state’s southeast corner, bordering Texas. “What do people not understand about horizontal drilling?” she asks. If New Mexico doesn’t tap the resource, “Texas will just take it.”
Through May, New Mexico ranked 3rd in the nation in oil production, at 20,168,000 barrels for the month, according to the Energy Information Administration. Overall, through the first five months of 2018, New Mexico has seen a 31 percent jump in production, and tied a record at 103 operating rigs it last saw in 2014.
Despite her support for oil and gas, Lujan Grisham has earned the endorsement of Conservation Voters New Mexico. The group plans to spend approximately $500,000 to help defeat her opponent, U.S. Rep. Steve Pearce (R-N.M.).
Pearce said oil and gas and local tourism, including access to public lands for all citizens, is critical to the state’s economic development.
“It just requires that balance,” Pearce said in August in southeast New Mexico. “We want that harmony. The last thing we want to do is discourage oil and gas.”
Robert Defer, CEO of the Carlsbad Chamber of Commerce, agreed that a balance between the two industries must be paramount, emphasizing collaboration over conflict.
“Oil and gas is essential to the state of New Mexico,” he said. “We just have to find a way for everyone to work together.”
That includes state and federal agencies working together, Defer said. Extending hiking trails, for example, does not have to conflict with oil and gas-related traffic on the roads, as officials work together to promote tourism in the area.
Xochitl Torres Dmall, a Democrat running for Pearce’s empty Congressional seat, praised the oil and gas industry in New Mexico at a candidate forum last week.
“You are one of the most innovative industries in our nation,” Torres Small said.
“It’s an unprecedented opportunity,” Robert McEntyre, spokesman for the New Mexico Oil and Gas Association, told Western Wire.
“We’ve never had this much production. We’ve never had the lease sales that we’ve had or this number of rigs,” he added. The next governor, McEntyre said, would have an unprecedented range of options with record lease sales occurring.
“It’s truly something the state has never seen before. We’ve experienced a boom before, but the boom was never this big. The numbers—the data—shows that,” he said.