The first real American industry to stretch across the windswept plains, the first to practice a trade across what is now known as the Permian Basin of Southeast New Mexico and West Texas, was cattle and ranching. For so many years, fences didn’t separate grazing grounds or cattle train routes. There was nothing but geography itself, most notably no great regulatory infrastructure, really differentiating where you were or how you operated.
Similarly, the geology of the Permian Basin does not see fences nor any government-made lines of delineation. The producing formations that make our region world renowned do not stop at city limits, county lines, or state borders. However, at times, it often feels that we live and work in a divided basin.
Yes, oil and natural gas operations in the Midland Basin are different than those in the Delaware Basin, which in turn can be different than those operations in the Central Basin Platform or the Ozona Arch. However, the differences between the government-imposed operating environments in Southeast New Mexico and West Texas can truly be what divides our region. These aren’t differences that a geologist or engineer might see, but differences experienced by land, environmental, and regulatory professionals.
At the beginning of 2021, with a new administration coming into office in Washington, D.C., most in the industry were preparing for changes in regulations that would impact our industry’s operations in the Permian Basin. The new administration, without passing a law, or even putting an official new regulation in place, did not disappoint.
On January 20, 2021, inauguration day, the Department of Interior’s acting Secretary Scott de la Vega ordered a pause on all leasing, permitting, and other oil and gas related agreements or contracts on federal lands for 60 days, unless authorized by high level government actors. A week later, President Biden issued an executive order indefinitely preventing new leasing on federal lands and requiring federal agencies to end the use of federal funds to pay for oil and gas operations—thus effectively declaring that oil and gas “subsidies” had come to an end. A few days after that, the Department of Interior announced that 70 permits that had been granted since the January 20, 2021, pause were improperly approved and were therefore revoked.
Without passing a law, or drafting a new regulation that would require public review and comment, actions by the new administration drastically impacted oil and gas operations throughout the United States, and with it the energy security that all of you had worked painstakingly hard to provide. While the lease and permit moratoriums are limited to only federal lands, changes in operations on federal lands impact operations on state and private lands as well. Some of these changes, in the short term, may be positive, in particular for areas like the Texas portion of the Permian Basin, which only has private and state (University Lands) owned acreage. However, there is great concern with federal creep into non-federal land areas in New Mexico and even in Texas.
This creep is being greatly felt in New Mexico, where many state officials appeared to be caught off-guard by the actions taken by the Biden Administration and its impact on operations, and revenue streams, in the state. This creep is a great reminder that elections have consequences. It is also a great reminder that having a determined, experienced, and steadfast advocate on your side is not only beneficial, but essential in times like these.
The staff and leadership of the Permian Basin Petroleum Association were not caught off-guard by the actions of the new administration and continues to work with local, state, and federal officials and partners to ensure your right to safely and responsibly develop our region’s natural resources. To find out how you can better support or take advantage of these efforts, reach out to the PBPA staff or someone in leadership. We’re gladly here to help you get the most out of your PBPA membership.